Heidi Richardson is a Global Investment Strategist for BlackRock. She is responsible for relating the Investment Strategy Team’s research and investment views to a wide variety of investors. She joined the firm in 2010 with twenty three years of active investment experience across both equities and fixed income. She writes about how to implement BlackRock’s best investment ideas.
Disclosure: The content Market Realist publishes should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of BlackRock.
Brazil’s performance in the 2016 Rio Olympics and worldwide speculation about a Fed rate hike might have a role to play in the country’s stock market performance in fiscal 2016.
First the good news: After two years of a deep recession, the economic fundamentals of Brazil are showing signs of bottoming out. Industrial production has started to turn, and so have sentiment indicators, with business confidence indexes leading the way (source: Bloomberg). Particularly encouraging are the improvements in the inflation trend. Prices have been easing […]
Fragile Five is a term coined in August 2013 to represent emerging market economies, including India, that had become too dependent on foreign investments to finance their account deficits.
Heidi Richardson recently visited 10 European countries over four weeks, and observed many signs supporting a currency-hedged exposure to European stocks.
The profitability of Japanese stocks has improved since late 2012, from ~4% to above 8%. However, profitability hasn’t hit the highs of the pre-crisis period yet, and it is slightly lower than American stocks.
Japanese stocks are nowhere close to the levels seen in the late 1980s. Japan’s Nikkei 225 Index peaked at ~40,000 in 1989, but since then it has been a painful ride for the Japanese.
Defensive sectors have steady earnings that usually grow slowly. Cyclical sectors have volatile earnings, but they can see high growth in earnings when the economy improves.
European stocks have benefited from the weak euro. Not only do exports look attractive to Americans, large-cap European companies also gain from currency translation.
While the risk-averse investors are resorting to US Treasuries, which provide higher yields, others are looking at stocks that pay high dividends for yield.
Yields have been dropping in this period, leading investors to prefer government bonds over stock, especially the safer ones, including the German Bunds.
Mature tech stocks are likely to be a good value play this year as the US economy strengthens and both consumer and business spending receives a boost.
The main assets of the technology sector are human resources. So, capital expenditure for tech companies could involve money spent on innovation and R&D.
The worst is over for the Japanese economy in the near term, economists say. But Abe still faces a difficult hurdle of wage growth along with inflation.
If you’re looking for a simple way to invest in Japan, we suggest keeping it simple with a low cost ETF. The iShares MSCI Japan ETF (EWJ) provides diversified access to large- and mid-cap Japanese stocks.
Earnings momentum – Worries about the impact of a new consumption tax led many Japanese companies to lower their earnings guidance for the year. Since then, a better-than-expected outcome has set the market scrambling to reprice.
