Market gravity reverses and drawing foreign capital towards the US

Money moves west: Surge into the US creates a 'crowded' trade, primed for relief rallies

Foreign funds are pulling back from most emerging and developed markets (EMs and DMs) and concentrating on US investments ahead of Donald Trump’s return to the White House.

 

According to Elara Capital’s Global Liquidity Tracker report, investors withdrew capital from 39 out of 41 EM and DM regions last week, while US equities attracted $8 billion in inflows, marking the 10th consecutive week of strong foreign interest.

 

Elara pointed out that this surge in capital into the US is creating a “crowded” trade, which often unravels and triggers relief rallies. Their analysis showed that similar outflows occurred during global equity