Foreigners Buying Fewer US Stocks

US capital inflows remain positive but are increasingly driven by domestic sales of foreign bonds rather than new foreign investment, as net foreign stock purchases have hit near-zero.

Key Takeaways

• 1.Foreigner net purchases of US stocks dropped to near zero in March, reaching levels not seen since the tariff tantrum of the previous year.
• 2.The headline capital inflow figure is misleadingly supported by US domestic sales of foreign bonds rather than fresh foreign capital coming in.
• 3.Demand for US Treasuries remains weak and increasingly concentrated in Europe, posing a risk to yields as geopolitical tensions rise.

Table of Contents

• Foreigner Stock Holdings Lower as Market Declined in March
• Capital Inflows More Supported by US Bond Sales
• Treasury Demand Rests on Europe