From the desk of Willie Delwiche.
Key Takeaway: Investors continue to favor stocks as money relentlessly pours into equity ETFs. It’s no wonder, given that the main stock indexes are printing new record highs. Yet, a depressed risk appetite and an unsupportive breadth backdrop accompany the persistent push higher in equities. Though these suspect undercurrents aren’t apparent at the index level, we see signs that short-term attitudes are shifting. Bears are on the rise, with the average of the II and AAII bears trending higher. However, pessimism remains relatively mooted and optimism is still elevated when viewed through either a cyclical or strategic lens. The current environment suggests there is more risk than opportunity for equities from a sentiment perspective.
Sentiment Report Chart of the Week: Feel the Flow![](https://media-allstarcharts.s3.amazonaws.com/wp-content/uploads/2021/08/willie09012021A.png)
Equity ETFs saw another $50 billion of inflows in August, bringing the YTD total to more than $400 billion. This was the 15th consecutive month of inflows for equities (for a total in that time period of more than $600 billion). Commodity ETFs experienced outflows for the second consecutive month in August. Despite YTD gains that surpass stocks (DBC vs SPY), commodities have experienced net outflows in 2021. It’s true that this is driven by flows out of gold (GLD), but that alone speaks to how unloved commodities remain from an asset allocation perspective.