A trillion dollars lost on the stock market because of this sector

A recent report found that equity-traded funds received record cash flow during the month of February, despite investor concerns about high yields on government bonds, particularly the United States, over the course of the last period.

The decline of the tech sector has helped the stock market lose about $ 1 trillion of its market value, along with rising U.S. bond yields. Available data indicates that investors poured about $ 86 billion into equity-traded funds over the past month, the highest level on record.

The entries confirm investor optimism over the prospect of further financial stimulus and the distribution of the Corona vaccine, as well as continued support from the Federal Reserve, according to Bloomberg.

Meanwhile, flows to fixed income ETFs declined relative to their equity counterparts, bringing in just $ 10.4 billion, the lowest level since last March.

Earlier, the Bloomberg agency had warned that optimism about a rapid economic recovery had led to bond yields in global markets rising to the highest level in a year.

On the flip side, record debt levels and zero interest rates can make multi-trillion dollar stocks and bonds vulnerable to heavy losses if bond yields continue to rise, suggesting that the economic recovery will have its own risks.

According to Bloomberg, because the risks are primarily focused on term-term risks or the possibility of changing interest rates over the term of the bond, technology companies with long-term financial flows are most at risk. at risk, especially with their key indicators growing at higher rates even compared to the stage of the tech bubble, at the end of the 90s of the last century.

Equity and bond markets benefited from the apparent recovery in the oil market, which stabilized after a year of turmoil. Last week, Brent prices hit their highest level in a year, hitting $ 65 a barrel, as Chinese consumption returned to pre-pandemic levels alongside the start of coronavirus vaccine distribution, in addition to the reduction of production by producing countries. .