Temasek Pours $30B Into US Amid Booming Economic Growth

In a recent move, Singapore’s state investor, Temasek, has declared its intention to pump as much as $30 billion into the U.S. market over the next five years.

What Happened: Temasek’s investment strategy will primarily target sectors such as healthcare, financial services, and technology, Reuters reported on Tuesday. The U.S.’s leading position in the field of artificial intelligence (AI) has been a significant influence on this decision, according to Jane Atherton, Temasek’s head of North America.

Despite recent market volatility, the U.S. economy has demonstrated strong growth, outperforming its global counterparts. The S&P 500 has recorded a 14.5% rise this year, partly fueled by the buzz around the AI sector.

Last financial year, Temasek’s investment in the Americas, currently standing at 22% or $63 billion, exceeded its China exposure for the first time in ten years. The firm has shown particular interest in AI-related sectors in the U.S., such as data centers, semiconductors, and battery storage.

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Atherton indicated that future U.S. stock performance would be largely earnings-dependent, especially in the tech megacap sector. Temasek is also considering investments in both public and private markets as more private equity firms plan to divest.

Earlier this month, Temasek revealed that profits from U.S. and India investments were counterbalancing underperformance in China. The firm is adopting a cautious stance towards China due to persistent trade tensions.

Why It Matters: Temasek’s decision to invest heavily in the U.S. comes at a time when the American economy is showing remarkable resilience, outpacing expectations with a surprising real GDP growth of 2.8% in the second quarter. This performance has led some experts to suggest that if economic performance were an Olympic sport, the U.S. economy would take home the gold.

Furthermore, the U.S. economy’s strength has been underestimated, according to Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. He suggests that markets worried about a growth slowdown should breathe a sigh of relief following the recent GDP number.

Despite the rollercoaster ride the financial world has been on this week, with warnings of a potential market crash and a surge in small-cap stocks, the U.S. economy has shown impressive strength.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari