Samurai, sushi, and sake are as Japanese as the Honda (HMC) you may be driving or the Toyota (TM) in your driveway. If you’re a gamer, Sony (SNE), Sega, Nintendo, and Konami (KNM) probably bring back happy memories. But when it comes to Japanese stocks, you may not be smiling from ear to ear.
The Nikkei 225 is a broad equity market index that tracks Japanese stocks. So far in 2015, it has gained nearly 2,000 points over its level at the end of 2014. It touched 20,000 toward the end of April 2015.
The Nikkei 225’s rise
The Nikkei 225’s rise does seem worth a second glance, but not for those who saw the index’s robust levels close to 40,000 in 1989. Yes, it’s been that long. Michael Jackson was still two years away from his album Dangerous under his contract with Sony Music. It was a time when Japanese stocks accounted for ~45% of the world’s market capitalization.
Needless to say, Japanese stocks are nowhere near those levels today. So the question arises: Is investing in Japan worth it?
A look at the facts
In this series, we’ll be looking at some facts from a macro perspective to attempt to arrive at an answer to that question. Let’s start with a few.
The iShares MSCI Japan ETF (EWJ), a popular ETF that invests in Japanese stocks, is up more than 40% in the past three years. Its currency-hedged version, the iShares Currency Hedged MSCI Japan ETF (HEWJ), which was launched in early 2014, is up more than 35% in the past one year.
Numbers alone don’t mean anything, though. We’ll look into it a little more deeply in the next article.
The Bank of Japan first introduced quantitative easing in March 2001 when it began purchasing Japanese government bonds. This continued until March 2006.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.