Inflows Into US Equity Funds in January!

Is this a sure sign of a market top? For the first time since April 2010, U.S. equity mutual funds had inflows, according to estimates by TrimTabs.com. "Official" numbers from the ICI will be out next week. Not only were their inflows into U.S. equity funds of $8.3 billion, but the inflow exceed the $7.7 billion inflow into global equity funds.

Retailers: it's about spring, not January. Retailers generally reported better January retail sales numbers than expected. It was a relief not to hear so much about weather.

Still, professional traders are not relieved. The focus is not on January...it's on spring. There are much tougher comps in Q1.

Retailers have underperformed the broader market since December. Why no big moves up? Everyone is waiting for 2011 EPS guidance, which will not arrive for a couple more weeks.

Traders are trying to figure out whether earnings will suprise on the upside or downside, and whether 2011 guidance will show margin compression on higher costs...we have not seen retail inflation in years, so it's not clear retailers will be able to raise prices.

It is clear other industries are raising prices. In the last 24 hours, I've noted that companies as diverse as Dow Chemical , Kellogg , AMR , Lubrizol , Wolverine WorldWide and Darden were raising prices due to higher commodity costs.

The good news: with corporations lean and mean and balance sheets in the best shape in decades, the expected increase in sales from a better economy will give a bigger than usual boost to earnings.

The bad news: the higher commodity costsand higher personnel costs will compress margins, making further stock advances a bit tougher.

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