The small caps have taken the field following an institutional overcommitment in large-cap, high-dividend stocks. This is confirmed by a run in the Russell 2000, which is up 5.4% since the end of June compared to 3.1% for the S&P 500. And small and mid caps outperformed eight of the 10 S&P sectors in July.

It seems that since the Fed is loath to raise rates, investors have taken a more aggressive approach. In other words, risk is back on.