One chart shows an under-the-radar reason Trump's trade war could hurt US stocks
Apollo flagged a less-talked-about reason the trade war could impact the US stock market.
The firm's top economist pointed to the record-high foreign ownership in US stocks.
A lower US trade deficit means fewer dollars held overseas that could make their way back to US markets.
The trade war could be inflationary and create headwinds to growth, but there's another reason Donald Trump's tariffs could negatively impact US stocks.
Apollo Global Management's Torsten Slok pointed to the record-high ownership of US stocks among foreign investors, who own 18% of the total US equity market, according to the firm's analysis of Federal Reserve data.
Check out their chart below.
"This is the mirror image of a trade deficit. Foreigners selling goods to the US receive dollars in return, which are then used to purchase US assets, including US equities," Torsten Sløk, Apollo's chief economist, wrote in a note on Wednesday. "If the trade deficit is eliminated, there will be fewer dollars for foreigners to recycle into the S&P 500."
Foreign investors have already shown signs that they're beginning to sour on the US market amid the turmoil around tariffs.
Goldman Sachs estimated that foreign investors sold around $60 billion worth of US stocks from the start of March through late April.
Most global investors, meanwhile, see international stocks as beating US peers over the next five years, according to a fund manager survey conducted by Bank of America from June 6 to June 12.
In its June survey, 54% of investors said they believed international equities would be the best-performing asset, compared to just 23% who believed US equities would be the top performers.
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Yahoo
34 minutes ago
- Yahoo
Trump says he's not planning to extend a pause on global tariffs beyond July 9
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The administration had set a goal of reaching 90 trade deals in 90 days. Negotiations continue, but 'there's 200 countries, you can't talk to all of them,' he said in the interview. Trump also discussed a potential TikTok deal, relations with China, the strikes on Iran and his immigration crackdown. Here are the key takeaways: Few details on possible TikTok deal A group of wealthy investors will make an offer to buy TikTok, Trump said, hinting at a deal that could safeguard the future of the popular social media platform, which is owned by China's ByteDance. 'We have a buyer for TikTok, by the way. I think I'll need, probably, China approval, and I think President Xi (Jinping) will probably do it,' Trump said. Trump did not offer any details about the investors, calling them 'a group of very wealthy people.' 'I'll tell you in about two weeks,' he said when asked for specifics. 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Politico
an hour ago
- Politico
Trump won't let other countries score big ‘wins' in trade talks. Both sides could lose.
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Linscott, who negotiated with India for USTR in the first Trump administration, said the administration knows the U.S. will likely have to make some concessions in order to secure a larger deal, putting the talks in a different bucket than other deals the U.S. is seeking to negotiate. 'India is the fourth largest economy in the world now, will soon be the third largest economy in the world, and is a critical strategic partner in the Indo-Pacific,' Linscott said. 'I think all those factor in a bit in the overall negotiating dynamics.' Phelim Kine contributed to this article.
USA Today
an hour ago
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What is a vote-a-rama? Senate vote marathon ahead of Trump legislative package
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