Investors might be wondering where markets are headed, given the wild swings in the past month or so. In late July, both the S & P 500 and the Nasdaq dived to a low not seen since 2022 before rebounding. Global markets — including the U.S. — sharply sold off in early August before bouncing back last week. Amid the volatility, veteran emerging markets investor Mark Mobius told CNBC’s ” Squawk Box Asia ” that he has been closely monitoring one metric in the United States: money supply growth. Mobius, who is founding partner of Mobius Capital Partners, pointed out that the U.S. M2 money supply peaked at $21.722 trillion in April 2022, but has declined to $21.025 trillion in June this year. That represents a decline of about 3.21%, he said Monday. M2 money supply refers to the estimated total money supply — including cash that people have — held as certain deposits or other savings vehicles. “This decline is historically significant because M2 had not seen such a drop in over 90 years,” said Mobius. Goldman Sachs explained in August last year that U.S. money supply was shrinking for the first time in 74 years because of changes in U.S. monetary policy and rising interest rates, and as the Fed shrank its $8 trillion balance sheet. “The main concern is that if the M2 money supply has declined since April 2022 and hasn’t kept pace with economic growth, there could be less capital available for the discretionary spending that has driven the current economic expansion and…
Investor Mark Mobius names one risk that could set back U.S. markets
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