Stock Market Highs Confirm US Economy Is A Winner

The message from the stock market is clear: The US economy is passing another stress test. Both domestic and foreign investors have shifted their attention from the risks of military escalation in the Middle East back to the remarkably consistent resilience of the US economy. The results are all-time highs in equities and a fresh wave of buying by both domestic and foreign investors. Even Michael Burry is reportedly buying the dip in software stocks after the AI-fueled sell-off (chart).

Contrary to the popular view, foreign investors continue to be net buyers of US stocks and bonds. The monthly Treasury International Capital System (TICS) data show net capital inflows from abroad remain robust. Private and official accounts combined purchased $1.35 trillion in US securities during the 12 months ended with February (chart).