Why Are International Investors Dumping U.S. Stocks?

Foreign hedge fund managers are treating U.S. companies like they’re toxic assets.

By Brenda SalinasMay 21, 2015 9:13 am

The business world went slack-jawed recently when a closely watched survey revealed that international investors are “dumping U.S. stocks like it’s 2008.” Jamie McGeever writes about the market for Reuters, he joined the Texas Standard from London.

Why are U.S. stocks being dropped like a hot potato?

“U.S. stocks may be over-valued…perhaps not toxic, but certainly overvalued in some people’s eyes. The strong dollar makes U.S. goods less competitive in international markets and it cuts into profits for U.S. companies who have profits overseas. When they buy those dollars back they get less of them…. So that’s definitely a factor for U.S. equity investors. On the flip side the Euro has fallen.”

Do global investors know something that Wall Street doesn’t?

“Valuations may be quite stretched. If there is a time to take some chips off the table, it might be now. Especially going to into the summer, traditionally quieter months and liquidity in these markets tends to dry up slightly.”

Listen to the full interview in the player above.