October 10, 2013

October 10, 2013

We make two new recommendations in this week’s premium global market commentary.  Upgrade your subscription today to get these two new recommendations.  Click the following button to upgrade.



Still bullish on Japan?


The Japanese equity market rose dramatically after the election of Shinzo Abe last year, aided by aggressive monetary stimulus from the Bank of Japan.  We see other policies and trends that suggest the rally is not over yet.  New rules to encourage notoriously cautious Japanese savers to invest in the stock market have been instituted and are attracting a lot of interest.  Japanese companies are flush with cash and buying back their own shares, which suggests that the most informed purchasers don’t believe their stocks are overvalued.  We think these factors may outweigh risks posed by next year’s tax hike.  We also think the Bank of Japan may act again to up the ante.  Because of recent weakness in the U.S. dollar, the Yen has rallied temporarily, slowing down the stock market rise.  Japanese investors favor a weak Yen as a way to improve the profitability of exports.



What about Venezuela?


Venezuela continues to play out as a case study in the corruption and cronyism that are typical to the economies of many resource-rich developing nations.  We’ve seen that promises for social transformation and the betterment of the lot of the poor are undermined when the goal is not growth, but simply wealth redistribution — which treats the nation’s natural resource wealth as something to be looted rather than an inheritance to be cultivated with care.  The entrepreneurs and the wealth-creators flee, the middle class is crushed, and the poor remain poor — while the economy totters as foreign lenders become leery and fear for the country’s solvency.




Driverless Cars Aren’t Coming — They’re Here


Driverless cars aren’t just the future, they’re the present.  The incremental introduction of driver-assist technologies started with a self-parking Lexus six years ago, and has now broadened to include more robust highway assistance designed to compensate for driver fatigue and inattention.  Many car manufacturers are building up experience bases which will allow full autonomy within a decade.  These technologies may prove disruptive, with one potential consequence being a drop in car demand by some young people who see owning a vehicle as more of a burden than a privilege, and for whom a self-delivered rental will be just an app click away.


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Guild Basic Needs IndexTM


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Track our analysis in these letters and at www.gbni.info.



In Last Week’s Global Market Commentary We Discussed:

  • German Elections Endorse Merkel’s Slow, Steady Approach to Eurozone Recovery (And So Do the Markets)
  • Japan Goes Hunting For Energy
  • Corporate America Embraces Free Online Courses
  • Interest Rates — A Great Indicator of U.S. Market Tops


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