What if the relative decline of US stocks isn’t temporary?
US equities currently make up just under half of global stock market capitalisation, up from about a third in 2010
Equity investors with shoot-for-the-moon hopes don’t typically bother with currencies, but the dollar has the potential to be a big factor here.
Its haven status is a huge support in luring funds from overseas into US stocks and bonds. Between March 2008 and September 2022, the dollar gained 60 per cent against a basket of its peers, climbing even during a financial crisis caused by the US.
Yet this year, it has slid 4 per cent since turmoil first hit US regional banks in March.
Jennifer Hughes FT 5 May 2023
Stocks have rarely been this expensive. That doesn’t (necessarily) mean they’re headed for a crash.
FANGs eight companies — Apple Inc., Amazon.com Inc., Alphabet Inc., Meta, Microsoft Corp., Netflix Inc., Nvidia Corp. and Tesla Inc. — have accounted for all the S&P 500’s growth this year.
The other 492 stocks are down slightly
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