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Tag Archives: Japan

Covid-19 Contagion Outside China Keeps Investors on the Defensive

Overview:  The spread of Covid-19 outside of China and early signs of the economic consequences again emerged to weigh on investor sentiment. Poor Japanese and Australian preliminary February PMI reports and some trade indications from South Korea saw most Asia Pacific equities sell-off. China was an exception. The small gain (0.3%), lifted the Shanghai Composite 4.2% on the week. Australia's benchmark also managed to eke out a minor gain (~0.12%) for the week after absorbing today's...

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Coronavirus: Go Forth and Multiply

Yves here. One might argue that Ilari has chosen the most alarming information about the coronavirus and then written a post about it. However, it does appear that some reports contain bad facts that haven’t gotten the attention they warrant. It is apparent that the Chinese don’t have a good vantage on their own problem. The hospitals are full. Many people who are sick are quarantined at home. And it’s been found that people who have gotten the coronavirus can test negative, even repeatedly,...

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Japanese Data: Much More In Store For Number Four

They put it off so long they backed themselves into this corner. The Japanese government under Prime Minister Shinzo Abe had originally scheduled two VAT tax hikes as part of the rollout for Abenomics. It would be inflationary and fiscally responsible all in one pass. To make sure Japan’s perpetually struggling economy could absorb any fallout from them while still moving forward there would be “stimulus” just to make sure. The first tax hike took place as scheduled in April 2014. QQE was...

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Dismal Q4 Japanese GDP Fails to Spur Yen Movement

Overview: It is only a US holiday today, but the global capital markets are subdued. In the Asia-Pacific region, equities traded lower with China and Hong Kong, the main advancers. The MSCI Asia Pacific Index has fallen in only two weeks since the end of last November, and that was during the last two weeks of January. Europe's Dow Jones Stoxx 600 slipped in the previous two sessions but is recouping the losses fully today. It is being led by consumers, energy, and financials. US shares...

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Markets are Data-Driven, but which Data?

Like a Newtonian law of motion, market participants will continue to rely on a particular trading style or system until it stops working. Betting that volatility stays low is a cash register for many, and there appears to be what Soros called "reflexivity" here, like a self-fulfilling prophecy.  Why is volatility low?  Because it is being sold in various ways besides directly selling options.  Buying equity pullbacks and selling euro bounces, for example, also seem to be expressions of...

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I For One Welcome Our New Robot Overlords

Fears over machines aren’t anything new. The Terminator franchise got started in the eighties and was hardly original back then. In gross economic terms, it may seem like the robot invasion is a 21st century phenomenon. It isn’t. One need only go back to Alberta of all places and learn about the Canadian Clifford Hugh Douglas. Douglas preached something called social credit not too much unlike the idea behind universal basic income. It was a way to redistribute wealth back to workers who were...

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Two Years And Now It’s Getting Serious

We knew German Industrial Production for December 2019 was going to be ugly given what deStatis had reported for factory orders yesterday. In all likelihood, Germany’s industrial economy ended last year sinking and maybe too quickly. What was actually reported, however, exceeded every pessimistic guess and expectation – by a lot. IP absolutely plummeted in the final month of 2019. Compared to the prior December, the index was down an alarming 6.7%. Minus seven doesn’t sound too until look...

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Stocks Finishing on Poor Note, while the Dollar and Bonds Firm

Overview: It was as if the World Health Organization's recognition of that the new coronavirus is an international health emergency was the catalyst that the markets needed. US equities recovered smartly and managed to close higher on the session. However, the coattails were short, and follow-through buying of US shares fizzled. In the Asia Pacific, Japan, Taiwan, and Australian equities firmed, while disappointing data weighed on European equities. The Dow Jones Stoxx 600 is off about...

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The Week Ahead and Why the FOMC Meeting may not be the Most Interesting

The week ahead is arguably the most important here at the start of 2020.  The Federal Reserve and the Bank of England meet. The US and the eurozone report initial estimates of Q4 19 GDP.  The eurozone also reports its preliminary estimate of January CPI.  China returns from the extended Lunar New Year celebration and reports its official PMI.  Japan will report December retail sales and industrial production.  These data points will provide insight into the state of the recovery from the...

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ECB’s Strategic Review and the Coronavirus Command Investors’ Attention

Overview: The spread of the coronavirus and the lockdown in the epicenter in China has again sapped the risk-taking appetite in the capital markets. Asia is bearing the brunt of the adjustment. Tomorrow starts China's week-long Lunar New Year celebration when markets will be closed, which may have also spurred today's drama that aw the Shanghai Composite tumbled 2.75%, bringing the week's loss to 3.2%, the most in five months.  India was among the few markets in the region that managed...

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