Private investors abroad are flooding U.S. stock markets with unprecedented capital, according to analysts at capital markets newsletter The Kobeissi Letter.
Net foreign private sector purchases of US stocks rose by $35.2 billion month-on-month in May to reach $121 billion, the second largest inflow on record. Reports Al Qubaisi’s message based on data from Reuters.
“Everyone wants US stocks.”
This is the second monthly increase in a row. Since the beginning of the year, foreign private investors have bought nearly $270 billion in US stocks. The record monthly flow will reach about $130 billion in November 2024.
In contrast, foreign investors recorded significant outflows from South Korean and Taiwanese stocks during the same period.
“Foreign investors sold $31 billion and $28 billion of South Korean stocks in June and May, respectively, the largest monthly outflows on record. Moreover, they also sold $18 billion of Taiwanese stocks in June, the second-largest selloff on record. Global capital continues to favor US stocks over the rest of the world.”
Such sustained buying from abroad provides a strong supportive force for US stock prices and liquidity.
The flows show strong global confidence in US companies despite domestic market volatility.
Analysts view this data as a leading indicator of international appetite for US assets.
Global capital continues to favor US stocks over other markets.
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