Tuesday, July 16, 2013

Great Rotation? (excerpt)

What is the likelihood of a “Great Rotation” out of bonds and into stocks? Weekly data estimated by the Investment Company Institute show that $66.7 billion poured out of bond mutual funds during the past five weeks through July 3, while only $0.3 billion flowed into equity mutual funds. So far, the evidence suggests more of a Great Liquidation out of bonds and into cash than a Great Rotation into equities.

Today's Morning Briefing: Questions & Answers. (1) Off-the-cuff. (2) No imminent threats. (3) Four more years for expansion and secular bull? (4) Retail sales making new highs along with earned incomes. (5) Will consumers drive right past latest pump price spike? (6) The IMF’s global economic forecast is subdued. (7) Might Europe surprise to the upside? (8) Less bang per yuan of borrowing in China. (9) Analysts see rising profit margins for Consumer Staples, Financials, Industrials, and Utilities. (10) Not so Great Rotation, so far. (11) Bernanke says Fed policy will remain ultra-easy even if QE is tapered. (12) Focus on overweight-rated Retailers. (More for subscribers.)

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