Global funds have the slightest exposure to US stocks since 2007. The average percentage of US equity in the portfolio of global funds is about 28%, with the rest being filled by European and emerging markets. According to a survey by Bank Of America, investors have not been so negative about US stocks since November 2007. Most economists believe this is due to the weak dollar.
Since the beginning of the year, the SP500 has risen by 11% and iShares MSCI Emerging Markets ETF with over 30%, which is indicative of how the world's finances are distributed.
What does this mean for US indices?
If the US succeeds in regaining confidence in its investors, we could see a new rallying rally. This would have happened if Trump managed to pass his tax reform through Congress and succeeded in suppressing North Korea's intentions in a peaceful way.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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