Where has the money that came out of the United States gone?
CICC analyzed the issue of capital outflows from the United States, pointing out that investors' trust in the US dollar and US Treasury bonds has declined, leading to a shift of funds towards gold, Bitcoin, and the stock and bond markets in Europe and Japan. Data shows that European stock markets have attracted significant capital inflows, while inflows into US stocks have stagnated, with limited outflows. Capital inflows into the Chinese market have been interrupted, and recently, there have been outflows from US stock, bond, and money market funds. Overall, the scale of capital outflows is not large, the market has temporarily stabilized, but may face pressure in the future
CICC answered this hot topic, and the conclusion is very clear: each returns to their own home.
Since the "reciprocal tariffs," the damage to global investors' trust in the US dollar and US Treasury bonds as safe assets has led some investors (especially those outside the US) to seek alternatives to dollar assets, such as gold and Bitcoin, as well as European and Japanese stocks, bonds, and currencies. This is also directly reflected in the "triple kill" of US stocks, bonds, and currencies. This indicates that funds are flowing out of the US. So, where is the money going?
From the asset performance results, the conclusion is also simple: gold and Bitcoin, as well as European and Japanese stocks and bonds, may all be potential "destinations."
In addition, some clues can also be found in the recent EPFR statistics on foreign capital flows. For example,
1️⃣ The inflow into European stock markets is the most obvious;
2️⃣ The inflow into US stocks has basically stagnated, but the outflow scale is not that large, possibly due to the massive size of domestic funds. The sharp reaction of assets is related to the marginal pricing effect of non-domestic fund outflows;
3️⃣ The inflow into the Chinese market has been "interrupted" since the beginning of the year;
4️⃣ In the third week of April, there was outflow from US stocks, bonds, and money market funds, which is a direct reflection of the "triple kill" of stocks, bonds, and currencies;
5️⃣ Recently, there has been a slight alleviation, but stocks and bonds are still flowing out, while money market funds have somewhat recovered, indicating that some funds leaving US stocks and bonds have shifted to holding cash.
Conclusion: The "triple kill" of stocks, bonds, and currencies has indeed appeared in terms of capital flows, but the scale is not large, and it has temporarily stabilized. It is speculated that the funds flowing out of the US at this stage may still be more of the "non-US funds" that previously flowed into the US due to the advantages of US assets, hence reflecting the "each returns to their own home" (such as Europe and Japan), but it is also quite difficult to expect this portion of assets to flow directly into emerging markets in the short term. Additionally, the size of domestic funds in the US is large enough that there has not yet been a systemic outflow, serving as a stabilizer, but it is also a pressure point for the future.
