All posts by globalmacroresearch

Japanese stocks, Stocks

Japan Post IPO: Financials, valuation and prospectus

The Japanese government is planning the IPOs of Japan Post Holdings, Japan Post Bank and Japan Post Insurance. The total size of these IPOs is expected to be over $11 billions and will be one of the biggest IPOs in Japan’s history. The date of the IPO is the 4th of November.

Japan Post Holdings is a holding company that contains three other companies: Japan Post, Japan Post Bank and Japan Post Insurance. As it is legally determined that Japan Post Holdings must own 100% of the shares of Japan Post, the company engaged in the postal service, this time the government is selling the shares of the other three companies, including the holding company.

As the stock prices are already determined, this article aims to examine the valuations of the three firms.

Continue reading Japan Post IPO: Financials, valuation and prospectus →

Trading strategies

How to trade options [1]: what are call options and put options?

This is the first article of a series, “How to trade options”, which explains how to trade options and what they are. First of all, we explain here the basics of call options and put options.

Options are a way to gain a profit in a market that neither constantly goes up nor goes down. With a long-lasting market trend such as stocks after 2008 or gold after 2012, bullish or bearish, you may simply buy or short sell a financial instrument.

On the other hand, when you know a market will not move for a while or when you know it will be volatile but do not know if it goes up or down eventually, neither buying nor short selling will give you any profit. However, with options, you can gain a profit even in such a market. This is why we explains here about options.

Continue reading How to trade options [1]: what are call options and put options? →

Currencies, USD/JPY

USD/JPY: If the Fed postpones a rate hike, Japan’s QE expansion would also be delayed

As the Fed remains unclear about when it raises interest rates, the investors are starting to doubt the Fed’s will for a rate hike. The doller is getting weak, and the gold price rebounded.

In the global markets, we also need to note that one central bank’s policy affects another central bank’s policy, and at the moment, this is the most true with the Fed and the Bank of Japan.

The Fed’s aim

As we explained in the following article, the Fed is not waiting for the further improvement of the labour market, but we estimate its aim is the depreciation of the stock market itself:

Continue reading USD/JPY: If the Fed postpones a rate hike, Japan’s QE expansion would also be delayed →

European stock market, Japanese stock market, Market outlook, US stock market

World’s GDP & stock market comparison: southern Europe finally starts to recover, Japan sinks

As we have written, there is no large economy in the world that is growing rapidly. Reflecting the decreasing demands in the world, including the Chinese economy slowdown, the commodity markets completely collapsed, such as copper and iron ore.

However, it does not mean any single small country does not enjoy any significant growth. Thus, we review the world’s economy again to find out which area is the most profitable for investors to bet on.

Continue reading World’s GDP & stock market comparison: southern Europe finally starts to recover, Japan sinks →

European stock market, Market outlook

The fatal flaw of the euro zone: how Germany is increasing the Greek debt

After much ado, Greece reached an agreement with the Troika of creditors, and investors seem to be convinced that the crisis is over, as the yield of 10-year Greek government bond, which was largely sold before the agreement, went down to 8% from 19%.

Is the Greek debt crisis really over? Is the Greek economy going to recover? Unfortunately, you would know it will not as long as it is in the euro zone, if you are familiar with economics. Germans do not want to admit it. Greeks do not want to believe it.

Continue reading The fatal flaw of the euro zone: how Germany is increasing the Greek debt →

Market outlook, US stock market

“Bond King” Bill Gross explains how to trade in equity markets amid the turmoil

Bill Gross, a famed bond fund manager of Janus Capital, explained in the Twitter account of Janus Capital about how to trade in the very volatile stock markets.

Earlier this year, Mr Gross also successfully predicted the bear market in German bonds and the plunge of the Chinese stocks. He is without a doubt one of the greatest  investors who correctly understand the market situation before the Fed’s rate hikes, the opinion of whom is worthwhile to follow.

Continue reading “Bond King” Bill Gross explains how to trade in equity markets amid the turmoil →

Market outlook, US stock market

S&P 500 could go down by 30% in 2015 to urge central banks to ease further

After the stock plunge in August, the global stock markets rebounded once, and they are now confirming their second bottom. The stock market plunge was essentially caused by the lack of the driving force for the global economies, proven by the Chinese slowdown, and it will continue until the authorities take any action, namely further monetary easing or financial stimulus.

2015-10-1-s-and-p-500-chart

However, if S&P 500 goes down by more than 20% from the peak, there would be a possibility that the central banks would rescue the financial markets. As we have been bearish about the stocks before August, we are also responsible to explain the future of this bear market.

Continue reading S&P 500 could go down by 30% in 2015 to urge central banks to ease further →

Market outlook, US stock market

The Fed wants US stocks to go down to degas the QE bubble

In September, despite the market’s speculating that the Fed might raise interest rates, the Fed decided to leave rates unchanged, postponing a rate hike.

Despite our guess, it also did not particularly emphasize its intention to raise rates within the year, even though there is an obvious difference of recognition between the Fed and investors in expecting how fast the Fed is going to raise rates in the next few years.

Is the Fed intentionally leaving the gap as it is? If the answer is yes, and there is some hidden strategy behind the Fed’s attitude, it might imply what the Fed truly wants to do, and it is neither about the labour market nor the inflation. It is something else.

Continue reading The Fed wants US stocks to go down to degas the QE bubble →

News

The Fed leaves interest rates unchanged, no rate hike for September

The FOMC meeting was held on 17th of September, and the Fed decided to leave interest rates unchanged. Investors were speculating the Fed might raise interest rates in this meeting.

Richmond Fed President Jeffrey Lacker voted against this decision, insisting the Fed should raise interest rates by 0.25%.

Press conference by Federal Reserve Chair Janet Yellen is scheduled after this meeting. She is expected to explain about this decision and the Fed’s future monetary policies. For more information about the Fed’s rate hike, see the following articles:

Foreign exchange market, Market outlook, US stock market

Will the Fed raise interest rates in FOMC on 17 Sep?

On 16-17 Sep, the Fed will hold the FOMC meeting with a possibility of a rate hike for the first time since the subprime mortgage crisis. The result will be published on the 17th.

Although we have already been writing about the Fed’s rate hike, we would like to summarize our opinions here. We regard the following 2 scenarios as highly likely: Continue reading Will the Fed raise interest rates in FOMC on 17 Sep? →