Global Markets Up, but Where Is the Retail Investor?


Tamer inflation (somewhat): The dollar dropped, stock futures rose a point or so, as February Consumer Price Index came in at 0.4 percent, in line with expectations, with core at 0.1 percent, slightly below expectations.

Yields on the 10-year Treasury moved up to 2.33 percent. This has been a big week for bonds: The 10-year closed last Friday at 2.029 percent, it's up 15 percent in five days.

Stocks rally: The U.S. isn't the only stock market at new highs. The major stock indicies in Germany, France, the U.K., and Japan are at their best levels since July.


1) Where's the retail investor? Indices at new highs, but only modest retail interest.

It's a cliché by now: Retail investors have been taking money out of stocks since, oh, 2008. Almost every week last year, there were net outflows.

Now the major indices are back at multiyear highs. What's the story with retail investors?

If you look at the Lipper (AMG) equity fund flow numbers so far this year, it looks fairly positive: The four-week average for weekly equity flows shows inflows of anywhere from $600 million to $4.5 billion...healthy!

But look below the hood: If you remove exchange-traded funds (ETFs) , there are still inflows, but they are much more modest....anywhere from $200 million to $800 million.

Why look at equity flows ex-ETFs? Because ETFs are still largely used by professionals...not exclusively, of course, but largely.

Bottom line: Retail investors are still only slowly warming to stocks. But it's a start.

2) Global markets this week: Moving up!


Japanese stocks rose for a sixth straight week as technology firms boosted the Nikkei 225 index to its highest level since July.

Japan +2.0%

Australia +1.5%

Hong Kong +1.1%

Korea +0.8%

China -1.4%


Great Britain, Germany, and France all rally to eight-month highs on the back on strong performance from financials.

Germany +4.4%

France +3.0%

Italy +3.0%

Spain +1.7%

UK +1.4%

Greece +0.1%


The S&P 500 index and Nasdaq Composite Index look to clinch a fifth-consecutive week of gains, with the S&P 500 on track to post its biggest weekly advance this year.

Dow Jones Industrial Average +2.6%

S&P 500 index +2.3%

Nasdaq Composite Index +2.3%

Russell 2000 Index +1.8%

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