Another batch of data has came out from the Investment Company Institute and though for the first time in a long time we are seeing modest inflows into taxable bonds funds, the theme is still about buying International equities for US investors. as the below charts indicate (click on them if you want to see larger versions).
The appetite for equities clearly affects market risk and as can be seen through our Markov regime switching analysis the market is still in risk on mode.
The world appetite for risk and returns seems to pick up and economies are doing better (even Europe does…). So if the Chinese GDP does not come much worse than expected or surprise us on the upside it could be an interesting few weeks ahead for us Equity Bulls…..If it is worse I guess it will provide laggard with a better level to enter the market.