This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Global Macro: Japanese Equities Remain Attractive

NEW YORK (TheStreet) -- Economic data across the world continues to show weakness. Purchasing Managers Index readings in both Europe and China raised concerns over the future health of global economies, but central banks have been on guard.

The European Central Bank cut rates recently, and President Mario Draghi vowed to keep a close watch on the data. European PMI's have been below 50 for a number of months now, indicating that contraction is taking place.

China has seen a similar slowdown in economic data. The services sector as well as factory data released readings that were below expectations, and further weakness could hamper global demand.

One of the lone bright spots is the nonfarm payrolls data out of the U.S. Although the number wasn't spectacular, it did beat expectations. The volatile nature of economic data has recently shown the ability to beat expectations one month and miss by a large margin the next. With a schizophrenic market, it is prudent to remain cautious. Although U.S. equities remain the most attractive asset class, downside risks remain.

Source: Stockcharts.com

Early Tuesday morning, the Nikkei broke above 14,000 for the first time since June 2008. This was on the heels of strong employment data out of the U.S. Friday and a market holiday that caused traders to play catch-up today. Japan is a major exporter to the U.S. and with stronger data, the prospects improve for Japanese companies.


Earnings season has taken way in Japan, and many analysts have deemed it disappointing. Of the companies that reported, only 54% beat expectations. That is compared to a rate of 68.5% in the U.S.

"Abenomics," is the term coined for Japan's aggressive monetary and fiscal policy, made popular by Shinzō Abe, the current Prime Minister of Japan. The policy diminished the value of the yen by 24% and incited a 62% rise in the Nikkei index. Although the yen reached a psychological resistance against the dollar, proving unable to push past the 100 dollar/yen mark, the long term trend remains bearish yen.

Stock quotes in this article: NKY, VT, IYT, JNK, CORP, DIA 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs