Foreign Purchases Of US Securities Drop To New Post-Lehman Low

Tyler Durden's picture

While the domestic euphoria in the stock market bubble has succeeded to sucker in everyone into the biggest multiple expansion rally in 15 years (as was noted earlier today, 75% of the S&P's YTD return has come from its trailing PE expanding to 16.5x now from 13.7x in 2012 - the largest increase since 1998), foreigners continue to vote with their feet. In fact, as today's August TIC data report showed, in August - perhaps due to Tapering fears - foreigners sold $16.9 billion in US equities. This was the fourth largest equity outflow in history. Transactions in other securities were mixed, with $10.8 billion in long-term Treasury sales offset by $16.8 billion in MBS/agency purchases, as well as $2.3 bilion in Corporate Bond buys.

 

How does this chart look on a trailing 12 month basis? Not good - the 12 month rolling average of net foreign purchases of Long-Term US securities dropped to just $17 billion from $25 billion last month. This is also the lowest average print since the 2009 recession.

Source: TIC