Money flowed into government bonds and European stocks, and out of high-yield bonds and U.S. stocks, as the market positioned the last week for the possibility that Donald Trump might pull off a win in Tuesday's presidential election.
There were multiple signs that fund investors were making adjustments — either pricing in or hedging against a Trump win — as the Republican sharply narrowed the gap with Democratic nominee Hillary Clinton. The Real Clear Politics polling average Friday gave Clinton just a 1.7-point lead over Trump, down from 7.1 points on Oct. 18.
Government bonds saw their first inflows in 17 weeks, high-yield redemptions hit their highest level since January and gold took in cash as well, according to Bank of America Merrill Lynch.
All of the trades are consistent with what many on Wall Street have been looking for should Trump prevail: At least a short-term sell-off in the stock market, inflation pressures pushing up bond yields and a general climate of uncertainty that will benefit safe haven plays like Treasurys and precious metals.