Bank of America (BofA) reports a massive $8.9 billion exodus from US stock markets in the week ending April 30th. This suggests investors are getting nervous, likely due to the uncertainty caused by tariffs and trade disputes.
Money Out of the US, Money In Elsewhere
The shift wasn’t just a case of money sitting idle. While US stocks saw a huge outflow, European and Japanese markets saw significant inflows – $3.4 billion and $4.4 billion respectively. This clearly shows a global shift in investment strategy.
BofA’s data also reveals that for every $100 invested in US stocks since the 2020 election, $5 has flowed out in the last three weeks. This paints a picture of growing investor concern.
Where’s the Money Going?
Interestingly, the crypto market saw a $2.3 billion inflow, and high-yield bonds attracted $3.9 billion. This suggests some investors are still seeking riskier, potentially higher-reward investments. However, gold and Treasuries saw a combined $6 billion outflow, indicating a lack of interest in these traditionally safe haven assets.
BofA’s Take: Deflation Fears and Portfolio Shifts
BofA analysts note a growing concern among their clients about deflation, rather than inflation. This is leading investors to adjust their portfolios, buying up utility stocks and low-volatility, high-dividend ETFs.
Last month, BofA strategists warned of a potentially short-lived US stock market recovery, advising clients to sell US stocks and the dollar while prices are high. They highlighted weakening of the US dollar as a key investment opportunity.
Disclaimer: This information is for general knowledge and shouldn’t be considered investment advice. Always do your own research before making any investment decisions.
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