Latest Global Fund Trends Revealed: Selling U.S. Stocks, Dumping Gold, Shifting to Japanese and European Stock Markets

According to a research report released by the global research department of Wall Street financial giant Bank of America on Friday, global investors continued to sell US stocks and instead heavily bought Japanese and European stocks in the week ending Wednesday. The weekly fund flow report from Bank of America (sourced from EPFR) showed that approximately $8.9 billion flowed out of the US stock market during the week, although the previous week saw a brief influx of funds into the US market. In addition, in terms of the gold market, with gold spot and futures prices continuing to decline, the first weekly outflow at a weekly level since January was recorded. The research team from Bank of America pointed out that since the 2024 US presidential election, for every $100 worth of inflows into the US stock market, $5 has been withdrawn over the past three weeks. On the contrary, the Japanese stock market recorded its largest single-week net inflow of funds since April last year, about $4.4 billion; European stocks also attracted over $3 billion during the week, indicating that investors continue to shift asset allocation from the US market to other regions. In the Japanese stock market, positive signals from trade negotiations between the US and important trading countries such as China and Japan, as well as the Bank of Japan indicating that it will take longer than previously expected to achieve its inflation target, have led traders to reduce bets on further interest rate hikes by the Bank of Japan. As a result, the blue-chip benchmark index of the Japanese stock market, the Nikkei 225, is set to record three consecutive weeks of strong gains, recovering all losses since April 2nd "Liberation Day" (when President Trump announced a radical global tariff policy). In the European stock market, the Euro Stoxx 600 index rose by 0.02% for the seventh consecutive day, reaching its highest closing point since April 2nd, with the UK FTSE 100 index also rising by 0.02% for 14 consecutive trading days. However, the Bank of America research team stated that they did not find signs of foreign investors conducting large-scale "clearance-style" selling of US assets: US stocks still saw a net inflow of nearly $4 billion from foreign markets during the week; although there was "mild selling of foreign assets" in the US bond market, a strong trend of net inflows had been maintained in the past six weeks. Global individual and institutional investors continue to monitor whether foreign investors will continue to sell US assets and whether the so-called "American exception" will completely collapse since President Trump announced global tariff measures on April 2nd. However, there is no doubt that with the unprecedented and uncertain "tariff big stick" measures of the Trump administration against all dollar assets, the long-held confidence of global investors in the so-called "American exception" logic is beginning to show significant cracks. Nevertheless, the Bank of America research report shows that approximately $4.5 billion flowed out of the US bond market during the week, marking the largest single-week outflow since the end of 2023; gold also recorded its first weekly outflow at a weekly level since January. In terms of gold prices, as the trend of profit-taking becomes more apparent, the international spot gold price, which has repeatedly reached new highs this year, has plummeted to a two-week low and could experience its worst weekly decline in over two months. On the news front, the Trump administration has recently actively conveyed information to China in hopes of engaging in trade negotiations. China is currently evaluating this. The gold price plummeted to a two-week low, with the spot gold price briefly falling below $3,230/ounce. Previously, President Trump stated that he may reach trade agreements with India, Japan, and South Korea, and added that the "likelihood of reaching an agreement with China is high."