Foreigners sold U.S. stocks heavily in May to pull down a still favorable $45.6 billion in monthly net inflow of long-term securities. Foreign accounts sold a net $26.6 billion of stocks in the heaviest selling in four years. This follows heavy selling in February as well as, at $21.5 billion, and raises questions over foreign participation in the U.S. stock market.
Foreigners were, however, heavy buyers of Treasuries in May at a net $26.7 billion with gains in private accounts offsetting central bank selling. Not selling, however, were Chinese accounts which increased their Treasury holdings by a little more than $1 billion in the month to $1.183 trillion.
Inflows were solid for both government agency bonds and corporate bonds. Inflating the month's headline total was $25.3 billion in selling of foreign securities, almost entirely bonds, by U.S. accounts.