Growing demand for bonds and decreasing demand for stocks in the US

Last week’s net gain of capital via US bonds was the third largest income in the history. On the contrary, stocks suffered net loss of invested financial means, statistics by Bank of America reported. Moreover, there’s enormous interest in gold.

Growing demand for bonds and decreasing demand for stocks in the US

During last week, American bonds were supported in $24.5 billion more than investors took. As such, it represents the third largest net income of U.S. dollar-denominated bonds in history. Nevertheless, stocks lost $3.8 billion. Gold reported historically second largest money influx, what led to topping $1,900 per troy ounce – a value last seen almost 9 years ago. 

Yet, growing demand for bonds caused dollar plunge, which is currently appearing in its lowest values in almost 2 years. Investors seem to prefer Europe and Asia over the US these days. As far as Europe is concerned, the agreement of leaders on €750 billion recovery funds seem to be a positive signal. And Asia profits from China’s positive second quarter economic results

According to analysts, the current trend of growing interest in American bonds in exchange for stocks will continue. We will know more information after Fed meeting planned for this Tuesday and Wednesday.

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