I have been expecting a traditional “summer swoon” in the stock market, especially since the “Trump Bump” no longer exists, if it ever did.  While second quarter earnings have been somewhat stronger than expected, those earnings were not enough greater to justify new market highs, especially during the summer doldrums.

When things seem illogical, look abroad!  Sure enough, $119.7 billion flowed into the U.S. from foreign private buyers during the month of May alone.  This also suggests the global economic recovery is real and that foreigners are starting to make real profits, which they ship to safety in the U.S.  Remember:  increased demand for U.S. equities drives the price of those equities higher.

At the same time, U.S. residents only moved about $3.6 billion into foreign equities, suggesting it is not too late to increase our allocation to foreign stocks.  We’ll see . . .