Japanese stocks have an earnings yield that is 612bps above the yield on 10-year Japanese government bonds
Put that in context; in the US, the gap is only 113bps. Little room for error in the US, plenty of room in Japan. This is a margin of safety concept. Source: Jeff Weniger
Fun fact is that Japanese inflation is now higher than that in the US for the first time since October 2015.
Source: Bloomberg, www.zerohedge.com
In China, the unemployment rate among young people ages 16 to 24 was 21.3% in June
A new record.
China reports Q2 GDP miss, fueling calls for more stimulus
China said Monday that 2nd quarter gross domestic product grew by 6.3% from a year ago, missing expectations (+7.3%). This marked a 0.8% pace of growth from the first quarter, slower than the 2.2% quarter-on-quarter pace recorded in the first three months of the year. The unemployment rate among young people ages 16 to 24 was 21.3% in June, a new record. Retail sales for June rose by 3.1%, a touch below the 3.2% expected. Industrial production for June rose by 4.4% from a year ago, better than the 2.7% forecast. So far, Beijing has shown reluctance to embark on greater stimulus, especially as local government debt has soared. A Politburo meeting expected later this month could provide more details on economic policy. Source: Bloomberg, CNBC
Chinese money trends are improving
M1 and M2 growth 3% and almost 2% on the month. Japan & China are the only places with positive money growth... Source: Andreas Steno Larsen
According to Goldman, India is poised to become the world’s second largest economy by 2075 behind China but ahead of the US
Source: CNBC
China's Inflation Rate Eases to Zero
Deflation in China? China's Consumer Price Index (CPI) year-on-year growth rate in June dropped to 0% (prev. 0.2%). Producer Price Index (PPI) year-on-year growth rate dropped to -5.4% (prev. -4.6%). Source: Bloomberg
Goldman joins Wall St banks in cutting China’s growth outlook as post-Covid bounce fades.
Goldman Sachs cut its 2023 GDP forecast from 6% to 5.4%, citing a slew of macroeconomic issues. Latest Goldman revision follows likes of UBS, BofA, JPMorgan, & Nomura. Source: HolgerZ, Bloomberg
