Equities look far more exposed to an exodus of foreign investors
Since December 2011, overseas holdings of U.S. equities have grown from $3.8 trillion to $18.6 trillion, official data show, going from a quarter to a third of U.S. market capitalization.
In February, a forward price-earnings ratio of 22.5 for the S&P 500 was seen as justified. Now that long-run prospects have worsened, this has fallen to 18.7.
Both are elevated by historical standards, and may partly be a rationalization of years of indiscriminate buying.
“Equities respond a lot more to sentiment, which is reflected a lot more in flow. Fixed-income owners are a lot less price sensitive: for example, central banks just want to hold dollars and put them somewhere safe,”
said Altaf Kassam, Europe head of investment strategy and research at State Street Global Advisors.
Wall Street Journal 23 April 2025
https://www.wsj.com/finance/investing/what-drawn-out-capital-flight-could-do-to-u-s-markets-98b65dd9
There is a giant problem that commentators are ignoring.
https://englundmacro.blogspot.com/2025/04/the-problem-trump-is-seeking-to-tackle.html
Tillbaka till Rolfs länktips 23 april 2025
https://englundmacro.blogspot.com/2025/04/rolfs-lanktips-23-april-2025.html
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