Around the world markets have gotten off to a rocky start to a New Year and so looking forward to the start of the Chinese New Year of the Horse.
Richard Cayne Meyer comments that The US Federal Reserve announced a $10bn reduction in its monthly bond purchases from $75bn to $65bn in the second straight month of winding down stimulus efforts this week.
The central bank had been buying bonds in an effort to keep interest rates low and stimulate growth. In a statement, the Fed said that “growth in economic activity picked up” since it last met in December.Although the move was expected, US shares still fell on the news.
The Fed left its overnight interest rate unchanged at 0% – the level it has been at since December 2008.
With expectations that volatility will increase this year, Black Rock chief investment strategist Russ Koesterich stresses the need to diversify into international stocks.
After “unusually low” levels of volatility in 2013, the onset of QE tapering from the US Federal Reserve this year will likely see market volatility “climb to levels that are closer to long-term averages, according to Koesterich.
While it is believed that stocks will post gains this year, those gains will be accompanied by more ups and downs comments Richard Cayne Meyer Asset Management.
Against this backdrop Koesterich reinforces the need for diversification into international names, particularly within the US market.
Richard Cayne comments that Japan has reported a record annual trade deficit after the weak yen pushed up the cost of energy imports.
Its deficit rose to 11.5 trillion yen ($112bn) in 2013 – a 65% jump from a year ago.
Japan has seen its energy imports rise in recent years following the closure of its nuclear reactors in the aftermath of the tsunami and earthquake in 2011.
But it is having to pay more for those imports after a series of aggressive policy moves weakened the yen sharply.
The Japanese currency fell more than 20% against the US dollar between January and December last year.
The World Bank this month raised its global growth forecasts as the easing of austerity policies in advanced economies supports their recovery. Taiwan’s finance ministry last week revised its exports figures for the fourth quarter and full year to reflect missing data, showing sales climbed 1.4% in 2013 after shrinking 2.3% the previous year. This is a very positive sign remarks Richard Cayne from Bangkok Thailand.
India’s central bank has unexpectedly raised interest rates in an attempt to rein in stubbornly high consumer prices in a crucial election year.
The Reserve Bank of India (RBI) raised the benchmark repo rate – the amount at which it charges to lend to commercial banks – to 8% from 7.75%.
The RBI said that another near-term hike was unlikely if inflation eased to a more comfortable level.
India’s main gauge of inflation, the wholesale price index (WPI), rose 6.16% in December, from a year earlier. While that was a slight fall on from the previous month, the rate continues to remain an issue with the central bank.
Richard Cayne Meyer explains the next trend is that investors poured money into European equity funds in the third week of 2014 while continuing to shun the world’s emerging markets.
European equity fund across the globe took more than $4bn in new money during the week ending 22 January, according to fund flow data provider EPFR Global, as the move towards developed market stocks continued in force.
Richard Cayne Meyer born in Montreal, Quebec Canada resides in Bangkok Thailand and runs the Meyer Group of Companies www.meyerjapan.com. Prior to which he was residing in Tokyo Japan for over 15 years and is currently CEO of Asia Wealth Group Holdings Ltd a London, UK Stock Exchange listed Financial Holdings Company. Richard Cayne has been involved in the wealth management space in Tokyo Japan and has assisted many High Net worth Japanese families create innovative international tax and wealth management planning solutions. https://www.isdx.com/Asia Wealth Group.