U.S. markets are hitting record highs almost daily but foreigners are apparently getting weary or skeptical. The chart above shows a sharp turn during this summer: from near-record foreign buying of US stocks to record net-selling.
US equity outperformance of other global markets hit its peak in early July, after which European markets took the lead, while the US has underperformed the MSCI World benchmark in the second half. Many fund managers prefer Japan and select European markets to the US for 2014 - though some favor stock picking over European indices.
Reason for caution? Nomura strategists reckon the earnings outlook has downside risk and suggest margins will be challenged as costs begin to creep up. Others say the market will continue it upward trend so long as the Fed allows investors to keep drinking from the stimulus punchbowl.
--By Jane Searle in New York
Foreigners Dumping U.S. Stocks Despite Record Run: StreetChart
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts