From the desk of Willie Delwiche.
Key Takeaway: The bulls came out expecting strength but were served a healthy dose of volatility. What on paper is a historically favorable season has turned out to be quite the opposite. New highs quickly fell to the wayside and into the rearview mirror as participation crumbled beneath the surface. In the wake, investor optimism is now accompanied by a sobering caution. The need for repair beneath the surfaces is great for both domestic and international equities, and is necessary to re-build investor confidence. For now, there are no significant signs of pessimism emerging. But volatility and pessimism can be dangerous dancing partners, each leading the other to the edge of the dance floor.
Sentiment Report Chart of the Week: Investors’ Love Of Equities Undiminished
Investors continue to pile into equities. YTD ETF flows through November show equity funds attracting nearly $600 billion of inflows, with two-thirds of this heading toward US equities. Bond fund inflows are just shy of $200 billion. Commodities remain relatively unloved, seeing outflows on a YTD basis but actually recording modest inflows for the month of November.
