While the developed world's central banks may enjoy trading FX and stocks, either directly or indirectly, with each other in a demonstration of monetary policy "stability", the historically biggest source of capital inflows into stocks - the retail investor - has once again just said "nein", for the 17th consecutive week, and excluding tiny inflows of $95 million in the week of July 18 and $907 million in the week ended May 30, has pulled money from stocks for an unprecedented 39 consecutive weeks, with $6.6 billion pulled out in the last week, the most since the first week of October. In fact going back to the beginning of 2010, according to ICI, while $44.5 billion has been invested into domestic equity stock funds, $412 billion has been pulled out. Where has the money gone on an almost dollar for dollar basis: bonds, confirming that the New Normal mantra is all about return of capital.
And no, it was not always like this.
So while banks are using the record cash deposited with them (as we reported several days ago), as well as the tens of billions in excess reserve capital inflow each month from the Fed to ramp stocks higher, the US investors no longer cares about promises by TV talking heads to "shift money out of bonds and into stocks now, because it is a once in a lifetime opportunity to do so", or that money in the bank is worthless under ZIRP so buy 300x P/E money losing retailers, or that the DJIA can go to 36,000. The US investor is simply done with the stock market.