Japan pushes markets higher
Markets have continued to rise during the past two weeks, driven by the landslide victory for Japan's ruling coalition in the Upper House election.
Gains made in Europe, Australia and the US paled in comparison to the 9.2% jump in the Nikkei 225.
It now seems likely Japan will roll out aggressive fiscal stimulus along with more quantitative easing to bolster growth and inflation. We doubt the Bank of Japan will directly finance a game-changing fiscal boost via "helicopter money" as some in the market are speculating.
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Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 19 Jul 16
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Markets have continued to rise during the past two weeks, driven by the landslide victory for Japan's ruling coalition in the Upper House election.
Gains made in Europe, Australia and the US paled in comparison to the 9.2% jump in the Nikkei 225.
It now seems likely Japan will roll out aggressive fiscal stimulus along with more quantitative easing to bolster growth and inflation. We doubt the Bank of Japan will directly finance a game-changing fiscal boost via "helicopter money" as some in the market are speculating.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Gains made in Europe, Australia and the US paled in comparison to the 9.2% jump in the Nikkei 225.
It now seems likely Japan will roll out aggressive fiscal stimulus along with more quantitative easing to bolster growth and inflation. We doubt the Bank of Japan will directly finance a game-changing fiscal boost via "helicopter money" as some in the market are speculating.
We are however, expecting attention in the market to shift from Japan to the US where markets may get a boost from better US economic numbers and US stocks earnings announcements.
Earnings season has had an encouraging start, notably from the banking sector. But we also need to see improved earnings in Technology and Energy.
So far this year equity markets are down across Europe and financial stocks have significantly underperformed. Italy is suffering, having underperformed the rest of the euro-zone as fears of a banking crisis mount.
Fears in Italy are justified in light of EU rules that make it politically difficult to recapitalise banks. But we believe Italian policy-makers will find ways to provide support to the banks.
European bank stocks may not drag on equity markets for much longer. We expect there is scope for equities in the euro-zone to recover as tighter than anticipated monetary policy in the US should cause the Euro to depreciate against the Dollar.
Recent data out of China showed that credit is expanding fast enough to support the economy over the next couple of quarters.
Official economic growth figures in China also held steady in quarter 2. While China is almost certainly expanding at a slower rate than its official GDP growth suggests, rapid state sector investment does appear to have remained stable.