The turmoil in U.S. equity markets has spooked foreign investors, leading to massive outflows over the past week, as tariff-related uncertainties continue to persist.
What Happened: According to a research note by Bank of America Global Research, foreign investors dumped $6.5 billion worth of U.S. equities last week, marking its second-largest amount on record, the first being the $7.5 billion in outflows during the banking crisis of 2023.
Market observers on X have added more context to this statistic. The Kobeissi Letter, a popular capital markets newsletter, noted that foreign investors own 20% of the U.S. equity market, worth $18.5 trillion, and 30% of treasuries, amounting to $7.2 trillion, and $4.2 trillion, or 30% of the corporate debt market.
“Foreign investors want out amid the volatility,” it said.
Peter Schiff, a vocal critic of the tariffs, took a potshot a President Donald Trump.
“Trump thought tariffs would bring capital into America. Instead, it triggered a global run out of U.S. assets.”
He reiterated the same point in the accompanying video, while adding that “whenever the government wants to do something, the opposite is what happens.”
Why It Matters: Analysts have been warning of a simultaneous collapse across U.S. assets, with equities, treasuries, the bond market, as well as the U.S. dollar all sliding in tandem. This has been attributed to foreign investors losing faith in American assets.
While this has been a growing narrative in recent weeks, there are others with a contrarian take, such as Tom Lee of Fundstrat Global Advisors, who said earlier this week that he does not believe the "America in decline" or "end of American exceptionalism” narratives.
"The best and most important companies in the world are American companies,” he said.
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