Global money managers funneled nearly $1 trillion into U.S. financial assets in the first half, signaling the American economy is primed to dominate post-COVID markets.
QUICK FACTS:
- Investors world-wide have funneled more than $900 billion into U.S.-domiciled mutual and exchange-traded funds during the first half of the year, according to The Wall Street Journal (WSJ).
- The data was compiled by Refinitiv Lipper, an American financial services firm founded in 1973 and acquired by Reuters in 1998.
- The massive inflow sets a new record in data going back to 1992, notes WSJ.
- The amount is “more than investors have put into funds elsewhere around the world combined during the first two quarters of 2021.”
- The S&P 500 has risen to over 17% in 2021, setting an all-time high.
WHAT EXPERTS ARE SAYING:
- Portfolio manager and strategist at global asset manager Natixis Investment Managers Jack Janasiewicz said, “The U.S. economy has a head start coming out of this pandemic.” “There’s plenty of optimism from our standpoint as to why the market can continue to walk up,” he added.
- WSJ surveyed economists forecasting the U.S. economy will grow 6.9% in 2021. “That is higher than International Monetary Fund projections for most advanced and emerging-market economies, including the euro area, Japan and the United Kingdom,” notes WSJ.
BACKGROUND:
- FactSet reports S&P 500 companies recently trading at around 28 times their last 12 months of earnings, near the highest level since 2000.
- “Such attractive returns could still draw more money to the U.S., analysts said. Optimism toward U.S. stocks rose in July among global fund managers surveyed by Bank of America, while bullish sentiment about eurozone and emerging-market equities waned,” reports WSJ.
