Follow the fund flows

As we approach the last hour of trading, North American stock indices look to finish in the green, following a strong close in Asia and Europe. Strength is pretty much across the board led by Research in Motion which reached an agreement with Saudi Arabia, giving authorities there greater monitoring powers and averting a ban on Blackberry messaging service. Markets are looking ahead to tomorrow's FOMC meeting in anticipation of continuing stimulus measures. As of last Friday, 445 companies in the S&P 500 have reported Q2 results - Earning for the quarter are up roughly 36% year-over-year, and 76% of the companies have reported positive earnings surprises.

An interesting report out of Credit Suisse this morning shows that while the S&P 500 has had a nice run since March '09, US equity fund flows have actually been negative. To emphasis the point, from the 2009 low to the 2010 peak, the S&P 500 gained 68% while US equity mutual funds suffered outflows of $42 billion; however, ETF asset increased by over $170 billion, potentially indicating a preference for ETF's over mutual funds.

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