- Investors allocated a record $137 billion to cash-like assets over the five days ended March 11, Bloomberg reported Friday.
- The period was marred by major stock market drops, Treasury market liquidity concerns, intensifying coronavirus risks, and the end of the 11-year bull market.
- Government bonds saw an all-time high inflow of $14 billion, and investors channeled $3 billion into gold.
- Various grades of debt assets were the biggest losers of the five-day stint, as investors withdrew $34.1 billion from investment-grade, high-yield, and emerging market bonds.
- Visit the Business Insider homepage for more stories.
Investors piled record amounts of capital into cash this week as the bull market’s 11-year run petered out.
Inflows to cash-like assets totaled a record $137 billion through the five days ended March 11, Bloomberg reported Friday, citing Bank of America and EPFR Global data. An all-time high $14 billion was channeled into government bonds, while investors dumped $3 billion into gold.
While capital is shifting toward safe havens and stable assets amid sharp volatility, investors are cashing out of various grades of debt and equities. Investment-grade, high-yield, and emerging market bonds saw their biggest collective outflow in history as investors pulled more than $34 billion from the asset class. The financial sector saw $3.3 billion withdrawn, marking another record during the chaotic five-day period.
Read more: Famed economist David Rosenberg called the housing bubble. Now he tells us why the oil-price war will be more damaging than the coronavirus – and outlines a scenario where stocks plunge another 13%.
The multibillion-dollar retreat from volatility arrived as the US stock market posted its worst losses in decades. Monday saw equities tank the most since 2008 as elevated coronavirus fears were met with a new oil-market war between Saudi Arabia and Russia.
The Dow Jones Industrial Average sank into bear market territory by Wednesday’s close, concluding the bull market’s historic run and ushering in a new era of market pessimism.
Stock prices enjoyed a fleeting uptick Thursday afternoon when the Federal Reserve announced it would pump $1.5 trillion into money markets by Friday night. The central bank cited “highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak” for its unprecedented move. The record liquidity injections will continue throughout the month and stand to boost markets if the virus can be swiftly contained.
Now read more markets coverage from Markets Insider and Business Insider:
The US stock market has now wiped out the entire $11.5 trillion of value it gained since Trump’s 2016 election victory Fed announces $1.5 trillion in capital injections to combat coronavirus fallout and ‘highly unusual disruptions’ ‘One of the buying opportunities of a lifetime’: Here’s why Wharton professor Jeremy Siegel thinks the coronavirus-driven stock rout is laying the foundation for a massive bounce back