Stitch,
Don't know how much my thoughts are worth but I can tell how I'm playing it.
We've had a market drop due to the media reporting the Russian situation. This coming week investors will hear more about Latin and South America, Canada, etc. The US bank and corporate investment in L/S America is much higher than in former Soviet block or even in Asia. The news will hit banking and all internationals. Will also hit $US and we'll see further strength in yen. It will not be a deep selloff as there's no place left to invest.
With all global markets soft and a low bond rates, those investors that pulled out of Asia will look back there for the 'babies' that got thrown out. Japan, South Korea, and ASEAN weak. I look to Hong Kong, China, Taiwan, Singapore, Australia, New Zealand, etc. to show recovery first with movement coming soon. I've focused on HK/China because they will benefit most from a weaker $US against the yen.
As I write this, yen is at 132 and showing strength. Hang Seng is up over 500 as hedge funds rush to cover. China Red Chips have been showing strength for almost a week. It isn't all market plays as the trend in HK/China is already moving up. Recent surveys on consumers show optimistic trend, hotel occupancy has increased substantially, property markets getting more active, and foreign capital expenditures are increasing.
I don't see a recovery in Japan, SK, or minor ASEAN in near future because of politicians and the weaker yen will actually prolong Japan's problems. HK/China, with virtually no debt, will get back on track in export growth and they'll come close to the 8% due to infrastructure spending and a strong agricultural sector. Russia will still be a problem 20 years from now. The Ukraine will succeed and this will cause difficulties with Russia,.........
Never mind, I'm starting to paint with too wide a brush.
JMHO,
Ron
|
