Money Markets Boom as Trade Tariffs Fuel Slowdown Worries Worldwide
(WellnessInvestigator) – Global money market funds experienced significant influxes during the week concluding on April 2. This trend reflects growing investor concern regarding U.S. President Donald Trump’s assertive trade strategies, leading to heightened worries about an economic downturn worldwide. Consequently, this has prompted several economists to increase their forecasts for potential recessions.
Cash management funds, typically regarded as secure options amid financial turmoil, saw an influx of $30.26 billion during the week. This occurred as President Trump imposed broad retaliatory tariffs on various trading partners, escalating a trade conflict and heightening concerns about a potential worldwide economic downturn.
In the meantime, global equity funds experienced only $49 million in net purchases, which represents a significant decline compared to around $35.84 billion in net buying from the prior week.
U.S. equity funds recorded net selling of $10.85 billion, reversing the prior week's $22.39 billion in inflows. In contrast, investors allocated $6.84 billion to European equity funds and $4.36 billion to Asian equity funds.
Global sectoral equity funds recorded net sales of $1.75 billion, led by outflows of $1.45 billion in tech and $1.35 billion in consumer discretionary sectors. Defensive sectors, however, fared better, with utilities attracting a notable $1.06 billion in net purchases.
Gold and precious metals commodity funds stayed robust, attracting investments for eight weeks in a row, with $1.06 billion injected into these funds over this timeframe.
In the meantime, bond funds, known for their steadiness, attracted net inflows of $4.3 billion, continuing their run of consecutive weeks with net purchases into a second week.
There was a significant increase in interest for short-term bond funds, as investors injected a net total of $5.02 billion into them. This figure marks the highest level of investment in this category over the past four weeks.
The data from 29,591 emerging market funds showed that investors pulled out a net $660 million from equity funds for the fourth consecutive week of withdrawals. In contrast, bond funds received a net influx of $1.07 billion after experiencing two weeks of outflows.
(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill)
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