FX: The driving force behind the surge in US stocks?

In June this year, the S & P 500 finally broke through the 4,200-point resistance level, which has been restricting the market since August last year, resulting in only range fluctuations.

The latest international capital data released by the US Treasury let us know who is behind this strong breakthrough.

As the chart below shows, after a month of chaotic capital flows,In June, purchases of US stocks by foreign investors - both official institutions and "other" or private entities - surged to an all-time high of $120.60 billionOfficial buyers bought $15.50 billion and "other" foreigners bought $105.10 billion.Foreign buyers never buy more than $75 billion/month。

The record share buying spree means that...After 17 months of net negative growth, the total amount of foreign investors buying U.S. stocks turned positive in JuneAt $92.20 billion, it was the first non-negative growth since the COVID-19 pandemic broke out, when the Federal Reserve took a lot of policy support to boost U.S. stocks that had multiple circuit breakers.

In addition to company stocks,Foreign investors also bought $66.40 billion in U.S. Treasury bonds。

That includes $25 billion in agency bonds and $32 billion in corporate bonds,Brings total purchases of long-term assets by foreigners to $244 billion, the largest monthly total on record。

Total foreign holdings of U.S. Treasuries reached a 16-month high of $7.563 trillion in June.This is mainly due to purchases by Japanese, British, Irish, and other buyers。

However, one of the largest holders of U.S. debtChina continues to sell offIts total Treasury holdings fell to $835.40 billion, the lowest level since 2009.