Thousands {As In Dollars} Are Sailing

You brave Irish heroes where'er you may be
I pray, stand a moment and listen to me
Your sons and fair daughters are all going away
And thousands are sailing to Americay
{Traditional Ballad, County Cork, Ireland Circa 1860's}

Like the Irish who left in the 1800's searching for a better opportunity abroad, Americans continue to vote with their pocketbooks placing money in emerging markets overseas. According to Emerging Portfolio Fund Research, this year's emerging market equity fund inflows of $20.9 billion already exceed the historic record for all of last year. Yet many of these markets quit advancing a month ago. Some of the most speculative exchanges in have recently posted double digit declines.

Any slow down overseas could result in an increase in inflows back to U.S. stocks. It is interesting to note that, notwithstanding the historic inflows into emerging market stocks, the I-Shares MSCI Emerging Markets Index (EEM) is 6% lower over the last two weeks while the I-shares S&P 100 Index (OEF) has quietly broken through resistance that reaches back to December of 2004. The OEF represents the 100 largest stocks in the S&P 500 index by market capitalization.

Note: Clients of Lumen Capital Management are currently long OEF. Please note that positions my change at any time and this by no means should be construed as a recommendation to buy or sell this security.