Foreign investors are still pouring money into U.S. assets, and the dollar remains the undisputed global reserve currency
As of June, the U.S. equity market remained far and away the most valuable in the world, accounting for nearly half of global stock-market capitalization, according to an analysis from Deutsche Bank.
Returns for investors in U.S. stocks have dwarfed those for equities trading in the rest of the world over the past 15 years. To be sure, that trend has started to shift over the past year, as stocks in South Korea, Europe, Japan and elsewhere have seen strong performance.
But the drivers behind why U.S. stocks performed so well for so long have remained firmly intact, according to Michael Cembalest, chair of market and investment strategy for J.P. Morgan Asset Management.
Simply put, American companies have a higher return on assets, and a higher return on equity, than companies in Europe, Japan or China, Cembalest said. In dollar terms, profits for publicly traded U.S. companies have grown much more rapidly than those of their foreign competitors, according to profit estimates from LSEG.
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