Investors Flocking to Cash - we front run Wall St :D (Patreon)

Great to have been proactive – remember, I started the week with an 18% cash position and transitioned to cash in anticipation of the summer decline over the past 2-3 months.

1. US Treasuries Inflows: Inflows into US Treasuries on track for a record year, with $127 billion inflows in 2023.
2. Mixed Asset Movement: Cash funds attracted $20.5 billion, while $6.9 billion flowed into bonds in the week through August 9; US stocks had an outflow of $1.6 billion.
3. Buoyant Demand for Bonds: Despite past predictions of a bond rally and economic slowdown, demand for fixed-income markets remains strong. Yield on 10-year US Treasuries at around 4.09%, up from a low of 3.25% in April.
4. Money-Market Funds Surge: Investors flocking to money-market funds for higher rates as Federal Reserve continues rate hikes, pushing total value of money-market funds to an all-time high.
5. Fed Tightening Impact: Aggressive tightening cycle by the Federal Reserve in recent years caused losses in bond holdings, while equity markets have remained strong due to robust corporate earnings.
6. Market Outlook: Bank of America strategist Hartnett anticipates cost of capital to remain elevated without a significant recession, potentially impacting stocks; previous bearish outlook on stocks for 2023 has not yet materialized.