Thursday, June 4, 2015

Where is the Optimism in the economy or stock markets?

Morgan Stanley recently produced a  report saying that there have been net OUTFLOWS in equities from 2010-2015 essentially, EVEN AS THE SPX rose as much as it has.

(see chart of equity flows since 2010 in particular - with few inflow weeks since then).

Recently the data has included some net inflows into the ETFs and equity market especially when a new high in SPY is hit, but also into high yield bonds!

To me i would ask WHERE IS THE OPTIMISM SO FAR?  I say nil to minimal.

My Reason: Even if the trend of inflows into equities continues we are just at the beginning of optimism, but there is still
a search for yield/risk aversion leading to bond inflows at the same time somewhat negating that.

I think it will be interesting if this trend is a crossover point ... TBA i guess?  But I am still bullish stocks, and bearish bonds.

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