With the S&P 500 and credit spreads near record levels, it is clear that there is a lot of confidence in the US economy.
In fact, two pieces of evidence suggest that foreign investors are very excited about the US outlook.
1) US 10-year interest rates are going up during New York trading hours and down outside of New York trading hours, see the first chart below. Simply put, this shows that domestic investors are sellers of US government debt and foreign investors are buyers. Unsurprisingly, foreigners like the higher yields they get in the US, including in private credit.
2) While foreigners were selling US assets in April after Liberation Day, they have come back as big buyers of US assets in May and June, see the second chart. In other words, the “sell America” trade was basically only in April.
The bottom line is that the US is the most dynamic economy in the world with some of the most attractive investment opportunities, and the two charts below show that foreign investors agree.
Note: New York trading hours are 8 am to 5 pm. Sources: Bloomberg, Apollo Chief EconomistSources: US Department of Treasury, Macrobond, Apollo Chief Economist
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