Investors cut back on US equities

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For fifteen years the United States felt invincible. The Magnificent Seven blazed higher, liquidity was bottomless and the dollar looked untouchable. Now global money is voting with its feet and the exit queue is the longest on record. The Bank of America’s recent survey of asset managers shows that 36 percent are now net underweight US equities – the worst reading in three decades.

Why? Valuations are sky‑high yet earnings growth suddenly looks like it’s in danger. Since January famous seven tech titans, known as the magnificent seven, have been down double digits. Tesla is off more than 30 percent, while Nvidia has surrendered a large part of last year’s gains. Rising real rates have killed the old “there is no alternative” mantra and that has hurt investor confidence.