The latest trends in global capital reveal: Sell US stocks, dump gold, and shift towards Japanese and European stock markets

According to the Zhitong Finance APP, the global research department of Wall Street financial giant Bank of America released a report on Friday showing that in the week ending Wednesday, global investors continued to sell U.S. stocks and instead significantly bought Japanese and European stocks. Bank of America's fund flow weekly report (data sourced from EPFR) indicated that approximately $8.9 billion flowed out of the U.S. stock market that week, following a brief large inflow in the previous week. Additionally, in the gold market, as spot and futures prices of gold continued to adjust, it recorded the first weekly outflow of funds since January this year.

The research team at Bank of America pointed out that since the 2024 U.S. presidential election, for every $100 value that flowed into the U.S. stock market, $5 has been withdrawn in the past three weeks.

In contrast, the Japanese stock market recorded the largest single-week net inflow of funds since April last year, approximately $4.4 billion; the European stock market also attracted over $3 billion that week, indicating that investors are continuously reallocating assets from the U.S. market to other regions.

In the Japanese stock market, positive signals emerged from negotiations between the U.S. and important trading countries such as China and Japan, and the Bank of Japan indicated that the timeline for achieving its inflation target would be longer than previously expected, leading traders to reduce bets on further interest rate hikes by the Bank of Japan. The benchmark index for blue-chip stocks in the Japanese stock market—the Nikkei 225 index—is set to achieve a strong closing rise for three consecutive weeks, recovering all losses since the "Liberation Day" on April 2 (when Trump announced aggressive reciprocal tariff policies globally). In the European stock market, the European benchmark index—Stoxx 600—rose by 0.02% for seven consecutive days, hitting the highest closing point since the "Liberation Day" on April 2 for four consecutive days, while the UK FTSE 100 index rose by 0.02%, marking 14 consecutive trading days of gains.

However, the research team at Bank of America stated that they did not observe signs of large-scale "liquidation-style" selling of U.S. assets by foreign investors: the U.S. stock market still saw a net inflow of nearly $4 billion from foreign buyers that week; although there was a "slight foreign sell-off" in the U.S. Treasury market, it had maintained a strong trend of net inflows for the previous six weeks.

Global retail and institutional investors continue to focus on whether foreign investors will continue to sell U.S. assets and whether the so-called "American exceptionalism" will completely collapse since President Donald Trump announced tariff measures globally on April 2. However, it is undeniable that the unprecedented and highly uncertain "tariff stick" measures by the Trump administration have continuously struck at the long-term confidence in all dollar assets, leading to significant cracks in the logic of the so-called "American exceptionalism" that global investors have long firmly believed in.

Nevertheless, the research report from Bank of America shows that the U.S. Treasury market saw an outflow of approximately $4.5 billion that week, marking the largest single-week outflow since the end of 2023; gold also recorded the first weekly outflow of funds since January this year. In terms of gold prices, as the trend of profit-taking becomes increasingly evident, the international spot gold price, which has repeatedly hit new highs this year, has plummeted to a two-week low, set to record the worst weekly price drop in over two months On the news front, the Trump administration has recently actively conveyed messages to China through relevant parties, hoping to engage in trade negotiations with the Chinese side. In response, China is currently conducting an assessment. Gold prices have plummeted to a two-week low, with spot gold prices briefly falling below $3,230 per ounce during the session. Previously, Trump himself stated that there is a possibility of reaching trade agreements with India, Japan, and South Korea, and added that the "likelihood of reaching an agreement with China is very high."