Cold Steel Blues

By |2017-10-19T11:19:39+00:00October 17th, 2017|Categories: Global Market Update|Tags: , , , |

Cold Steel Blues What’s happening to Kobe Steel? Inside arc furnace. Photo: Payton Chung. Source: Wikipedia Kobe Steel is a metals refiner based in Japan. They have almost 40,000 employees, and they produce aluminum, copper, and titanium as well as steel wire, rod, and rolled products. Most of their sales are to Japanese customers, but they have been expanding globally, especially in China. But that expansion may be over for a while. Last week the company disclosed [...]

Economic Growth and Investment Returns

By |2016-11-17T15:44:37+00:00July 27th, 2016|Categories: Global Market Update|Tags: , , |

Growth and Investments Where do investment returns come from? Photo: Thomas Bresson. Source: Wikipedia For as long as I’ve been investing, people have said to put money into the stock market for growth and to own bonds for stability. That advice has gotten a little jumbled lately, but it still seems to hold true. The US stock market has returned 7.5% per year for the past 10 years, while the bond market has earned 5.25%. The same [...]

Not Turning Japanese?

By |2016-11-17T16:01:36+00:00January 14th, 2016|Categories: Global Market Update|Tags: , , |

Japan. The Vapors Cover Art. © United Artists. Source: Wikipedia. That’s the market that should scare all the investors, financial planners, asset managers, and market mavens out there. The Japanese stock market has been in a bear market for the past 25 years—down 2% per year, even after dividends. By contrast, the US has grown 9% per year. And Europe is in the middle: the UK is up 4%; Germany is up 7%; France has grown 3% [...]

Rising Dollar, Rising Markets?

By |2016-11-17T16:23:46+00:00March 17th, 2015|Categories: Global Market Update|Tags: , , , |

Image Source: Digital Juice What does a strong dollar mean for the rest of the world? Over the past six months the trade-weighted dollar has risen 25%. A strengthening labor market here, monetary stimulus by the Bank of Japan, Q€ in Europe, falling oil prices in Canada, and a slowdown in China have depressed those currencies relative to ours. A strong dollar has lifted the prospects of both Europe and Japan. Those export-oriented economies can expect higher profit [...]

Rising Sun?

By |2016-11-17T16:33:32+00:00November 24th, 2014|Categories: Global Market Update|Tags: , , , |

Is Japan in a recession? It is if you believe the most recent news. Japan’s economy contracted last quarter, after falling the quarter before that. Two successive quarters of declining GDP are usually enough to be considered a recession. The bad news led Prime Minister Shinzo Abe to delay another sales tax hike scheduled for next year, and to call for new parliamentary elections as a sort-of national referendum on his economic policies, “Abenomics.” But if this [...]

Japan: Off the Charts

By |2016-11-17T16:35:05+00:00November 3rd, 2014|Categories: Global Market Update|Tags: , , |

What does Japan’s new stimulus package mean?On Friday the Bank of Japan announced it would expand its asset-buying program by $750 billion per year, buying stocks and real-estate funds as well as bonds. The central bank could be buying more than twice the amount of new bonds issued by the government. At the same time, the Government Pension Fund said it would raise its share of stock investments by over $100 billion. […]

Turning Japanese (Part 2)

By |2013-06-18T08:26:49+00:00June 18th, 2013|Categories: Global Market Update|Tags: , , |

What is Japan trying to do? On the face of it, end deflation, weaken the yen, and revitalize the economy. Abenomics is the fiscal and monetary policy package put together by Prime Minister Shinzo Abe and BOJ Governor Haruhiko Kuroda. It consists of monetary reflation, deficit spending, and labor market reforms. For years, Japan was regarded as the sick man of Asia. But if Abenomics can get their economy moving again, that won’t be the case anymore. [...]

Turning Japanese (Part 1)

By |2013-06-17T09:07:32+00:00June 17th, 2013|Categories: Global Market Update|Tags: , , |

Has Japan turned around? During the ‘80s Japan’s market was booming. Their export-led economy was capitalizing on the growth in world trade, their stock market grew 10-fold from 1974 to 1989, and the market value of the imperial palace in Tokyo was supposedly greater than that of the State of California. Japan, Inc. was considered an economic juggernaut—a model of targeted subsidies and managerial expertise that could dominate any market it chose to. […]

The Case For Japan?

By |2013-01-28T10:38:15+00:00January 28th, 2013|Categories: Global Market Update|Tags: , , , |

Is the Japanese market coming back? For over 20 years the Japanese stock market has been in a funk. After topping out the last day of 1989 the market value of the Nikkei average fell over 80%. A thousand hearts have been broken—and billions of dollars lost—betting on a comeback for the world’s third largest economy. But the new Prime Minister Shinzo Abe recently announced a 10 trillion yen stimulus package—the equivalent of a $300 billion program [...]