Investors have begun putting money into bonds, resulting in a weekly inflow for the week that ended March 30 after almost three months of significant outflow. While the decrease in energy prices has resulted in unsettling discussions over inflation, money has piled up from investors, with $6.3 billion put into bonds and $18.9 billion into equities.
Investors may start to purchase more stocks at a lower price with the hopes that the market will rise again in the near future and turn them a profit. The trend was prompted by a warning from Bank of America, which signaled an upcoming stock market rally that could be a big opportunity for shareholders.
According to the weekly Refinitiv Lipper Alpha statistics, $3.5 billion went into global bond funds, the first inflow since early January. European bond funds increased to an impressive $5.77 billion.
However, in the first three months, the global bond fund outflow reached $108 billion. In that time, there was a discharge of bond funds seen in U.S. and Asian economies. Overall, the increase in bonds from international markets brought both highs and lows to the U.S. economy.
The global high yield saw an incoming $1.3 billion bond fund. Bond funds related to inflation saw an inflow of $1.1 billion. There was an inflow of purchases worth $16.5 billion in the cash market. In short, the market saw increases and losses both in the extremes.
The DOW went up 2% in March of 2022, while Nasdaq went up 3.6%, reducing the annual-to-date stock damage to nearly 5% by the end of March. This boom drew U.S. stocks close to a record-high hit since the beginning of January.
According to Bank of America strategists, “softer inflation” would result in added gains. The current trends show an inverted curve in bond yields, which translates to spiked interest rates and government debt. This risk of a downturn is imminent in the coming months, leading to a bull market with a drastic increase in prices.
In the track of weekly flow data provided by Yardeni’s graphical analysis, the first bond inflow was seen in the previous 12 weeks and the first equity inflow during the last 7 weeks. Meanwhile, due to Russia’s invasion of Ukraine, the division related to energy resources is becoming a long-term purchase.