Tag Archives: Nikkei

Stretched to the Limit There are good reasons to suspect that the bull market in US equities has been stretched to the limit. These include inter alia: high fundamental valuation levels, as e.g. illustrated by the Shiller P/E ratio (a.k.a. “CAPE”/ cyclically adjusted P/E); rising interest rates; and the maturity of the advance. Near the end of a bull market cycle there is always the question of when a decline will...

Summary: Abe’s political gamble appears likely to pay off. The third arrow of structural reforms continues. The FSA is continuing to push for shareholder value. Foreign investors have gone on a three-week buying spree that appears to be the largest in years, and the Nikkei is leading G7 bourses higher this month. Japan’s Abe’s gamble to call snap elections shortly after the stunning defeat in the Tokyo...

On September 1, 2017, the Nikkei Asian Review published an article titled, “China sees new world order with oil benchmark backed by gold”, written by Damon Evans. Just below the headline in the introduction it states, “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry”. Not long after the Nikkei piece...

World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia’s independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red – as they have been every day this week before levitating to record highs – ahead of hurricane-distorted nonfarm payrolls data (full preview here)....

In the second quarter of the year, one in which unlike in Q1 fund flows showed a persistent and perplexing outflow from US stocks and into European and Emerging Markets, a trading desk rumor emerged that even as institutional traders dumped stocks and retail investors piled into ETFs, a “mystery” central bank was quietly bidding up risk assets by aggressively buying stocks. And no, it was not the BOJ: the Japanese...

US futures are set for a sharply lower open (at least in recent market terms) following a steep decline in European stocks and a selloff in Asian shares, following yesterday’s sharp escalation in the war of words between the U.S. and North Korea. In a broad risk-off move U.S. Treasuries rose, the VIX surged above 12 overnight, while German bund futures climbed to the highest level in six weeks. The Swiss franc gained...

U.S. index futures point slightly lower open. Asian shares rose while stocks in Europe fell as energy producers got caught in a downdraft in oil prices and reversed an earlier gain after Goldman unexpectedly warned that WTI could slide below $40 absent "show and awe" from OPEC. The dollar rose, hitting a four-month high against the yen and bonds and top emerging market currencies were back under pressure on Tuesday, following last week’s hawkish rhetoric from central bankers. Nonetheless,...

Asian stocks rose lifted by commodity names; European equities trade mostly lower but with little in the way of conviction or firm direction while the Italian banking index is at the highest level in a year following domestic earnings; S&P index futures are modestly in the red after the cash market closed at a record high Wednesday and investors prepared for earnings from retailers; we expect the now general vol selling program to promptly lift the S&P into new all time highs minutes...

In the first few months of the year, a trading desk rumor emerged that even as institutional traders dumped stocks and retail investors piled into ETFs, a “mystery” central bank was quietly bidding up risk assets by aggressively buying stocks. And no, it was not the BOJ: while the Japanese Central Bank’s interventions in the stock market are familiar to all by now, and as we reported last night on sessions when the “the...

Summary: Policy is on hold. There is several areas which the BOJ can adjust its forecast or forward guidance. BOJ is more likely to err on the side of caution. The Bank of Japan is unlikely to change policy. Its current policy of targeting 10-year bond yields and expanding the balance sheet by JPY80 trillion is aimed at boosting core inflation to 2%. However, the risk is that BOJ Governor Kuroda surprises the...