Stocks are rising over bonds
Investors decided to focus more on stocks, after the victory of Republican Donald Trump.
Meanwhile, the bond market may just receive the loss of 1 trillion dollars. Investors believe that Trump together with his new administration will make more investments in business and it will be lifted the stocks at the Wall Street.
According to the CEO of the Double Line Capital in LA, Jeffrey Gundlach, the market has already noticed this tendency to reallocate the bonds out and to focus more on stocks.
Meanwhile, in Europe, German yield reached its highest in 8 months level, and in Britain, its gild yield just became equal to its previous highest number before the Brexit.
Global Index at the world market of BoA Merrill Lynch lost 1.8 percent at the beginning of the new week, which is equal to 1 trillion dollars.
Many investors are not ready to give up with their plans on bonds, some of them continue to struggle with the native negative yields, like Japan and some European countries.
As for the backup in yields that will be pretty dramatic, analyst Mihir Worah says it is still too early to tell if there will be one or not.
Economists from Wall Street do not know if there will be similar to the after-Brexit situation with the Trump’s victory. Even thought at first the situation was very bad for European stock markets, they completely recovered in the next few months.
The uncertainty on the market is the main enemy of investors right now as they cannot act bold.