Mohamed El-Erian, chief economic adviser at Allianz and president of Queens’ College, Cambridge, posted on X today, September 26, 2026, drawing attention to a significant shift in global investment patterns. El-Erian highlighted a substantial preference for US equities over Treasuries among international investors, stating, "ROW: Long US equities, less so Treasuries:, 'foreign investors made a record $942bn in net purchases of US equities and investment fund shares in the 12 months to July, accelerating a shift in overseas investment towards American stocks and away from debt. The flows represented the highest rolling 12-month total in Treasury data going back to 1985.'" His post emphasizes that this movement represents the highest rolling 12-month total recorded in Treasury data since 1985, signaling a notable re-allocation of overseas capital that could have lasting implications for global financial markets.
This record inflow of foreign capital arrives amidst a period where major US indices are showing resilience. The S&P 500 is up 0.5% at $7,743 and the Nasdaq is also up 0.5% at $27,069 today. Recent Gokhshtein Media coverage has highlighted Morgan Stanley raising its Federal Reserve hike outlook to 4.25-4.5% as energy inflation persists. Such an environment, marked by rising inflation and potential monetary tightening, makes the sustained foreign confidence in US equities particularly noteworthy for market observers.
El-Erian's observation implies that despite domestic inflationary pressures and the prospect of higher interest rates, foreign capital continues to be drawn to US stocks, viewing them as a more attractive investment than US Treasuries. This sustained preference suggests a strong belief in the long-term growth potential and relative stability of American companies, potentially acting as a significant counterbalance to economic headwinds. Investors will likely monitor future Treasury data on capital flows to gauge the persistence of this shift and its broader market impact.
