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Massive capital movements: $16.9 billion leaving global stock markets - A look from an expert perspective
Investing.com reports on massive capital movements on international stock markets. Last week, $16.9 billion was withdrawn, the highest amount since December 2022. US stocks in particular have been hit by this capital flight as concerns grow about a possible hard landing for the economy. At the same time, the bond markets are recording a capital inflow of $2.5 billion, while the money markets are seeing an outflow of $4.3 billion. The gold market was not spared either; $300 million was withdrawn here. These developments are worrying for the financial industry and could have long-term effects on the market. Financial expert Michael Hartnett...
Massive capital movements: $16.9 billion leaving global stock markets - A look from an expert perspective
Investing.com reports on massive capital movements on international stock markets. Last week, $16.9 billion was withdrawn, the highest amount since December 2022. US stocks in particular have been hit by this capital flight as concerns grow about a possible hard landing for the economy. At the same time, the bond markets are recording a capital inflow of $2.5 billion, while the money markets are seeing an outflow of $4.3 billion. The gold market was not spared either; $300 million was withdrawn here. These developments are worrying for the financial industry and could have long-term effects on the market.
Financial expert Michael Hartnett recommends selling the latest interest rate hike and sees the possibility of a hard landing for the economy. He bases his thesis on various indicators such as the steeper yield curve, rising unemployment and defaults on high-yield securities and credit cards. These factors should be monitored closely over the next few months.
The “Sell the last rate hike” strategy has historically proven successful in times when monetary policy had to take measures to slow inflationary overheating of the economy. Hartnett currently recommends buying 5-year Treasuries at 5%. Energy and consumer staples could be interesting investment opportunities, while plays like Mag7, SOX, XHB, XLI and XBD could be interesting on the short side in a hard landing scenario. To hedge against rising yields and a weaker US dollar, Hartnett also recommends holding gold, especially if confidence in US politics is waning.
The Bank of America study also shows a strong correlation between job vacancies in the USA and the stock market. This could indicate that US stock markets face further challenges in the near future.
Overall, capital movements on the international stock markets, particularly the flight from US stocks, have an impact on the market. A further trend reversal can be seen in Europe, where capital has been flowing out of the region's stock markets for 28 weeks. Capital also flowed out of Japan in the last two weeks.
According to a report by de.investing.com
Read the source article at de.investing.com