From precious metals to loans on the brink of default: Investors are flocking to these assets after the coronavirus market meltdown | Currency News | Financial and Business News

Mike Segar/Reuters

  • Periods of widespread selling and cash-hoarding shifted the sands of the investing landscape to reveal new opportunities.
  • Several of Wall Street’s biggest firms are raising billions of dollars to pile into distressed debt, viewing the Federal Reserve’s relief measures as a backstop for ailing corporations.
  • Significant spending on coronavirus relief measures will drag on global currencies, Bank of America projected, setting gold up to skyrocket through the economic downturn.
  • Even bitcoin is breaching key thresholds, and some investors are turning to the volatile asset for the first time “as a hedge against currency wars,” Ed Moya, senior market analyst at OANDA, wrote Thursday.
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Weeks of indiscriminate selling and rotation to cash has left some corners of the market attractive to major institutions and retail investors alike.

Distressed debt, gold, and even bitcoin are currying new favor as popular sectors grow tepid. Trillions of dollars worth of relief measures from the Federal Reserve and the government have stabilized once-turbulent markets and signaled to buyers they can rely on a policy backstop. Firms tracking investor positioning are trying to get ahead of the curve, advising clients to enter underweight areas before a wave of capital follows.

Uncertainty clouding the US’s economic future has spoiled some more traditional investment strategies. The stock market’s rebound from late-March lows has slowed its pace, leaving economists forecasting everything from a sharp uptick to a bear-market resurgence. Monday’s plunge into negative oil prices pushed the commodity market into uncharted territory and added another phenomenon to an already unprecedented year for the financial sector.

With corporate earnings fueling even more volatility to the virus-slammed landscape, investors are targeting gains elsewhere.

Read more: The stock market is rebounding without the most important…

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