"August continued last month's classic risk-on trend, with strong flows throughout equities and fixed income, domestic and international," said FactSet ETF analysts in a release.
The risk-on situation remains tenuous, though. "Investors could rotate back into risk-off securities if there's concerns about the likelihood of the Fed's next move occurring earlier," Rosenbluth said.
A whipsaw in emerging markets equity, specifically, wouldn't be without precedent.
"Prior to the Jackson Hole symposium, the market was pricing in a low probability of a Fed rate hike this year. As a result, the dollar's rally had petered out and oil/other commodities had rebounded," Mishra said. "But things have changed slightly after that meeting. If the Fed raises rates, EM inflows will likely slow down. EMs were hard-hit during taper tantrum in 2013," she added.
The market expectation for Friday's nonfarm payroll was 180,000 jobs added in August but the report showed weaker than expected job growth of 151,000 which isn't the trigger the market was looking for in terms of the Fed raising rates as soon as this month.
On Thursday, when a key read on manufacturing growth came in at a surprisingly low level, indicating contraction, the market bet on a Fed raise in September went down from 40 percent to 34 percent. Economists had said that any jobs number 200,000 or more would have led to a September rate hike. After the August jobs disappointment on Friday morning the market prediction for a September rate hike dropped to 25 percent.
Notable bears such as Bill Gross of Janus aren't changing their tune. In his September investor letter released earlier this week, Gross said, "The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes. But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen's smooth shot from the fairway will find the deep rough."