Markets Archives - Page 499 of 782

How Significant is Indonesia’s Economic Slowdown?

The slowdown in Indonesian growth to 4.7 percent for the first quarter of 2015 follows a steady quarterly slowdown since the 6.8 percent peak just over four years ago. Is this slowdown simply a post-commodity boom cyclical downturn, or is it the beginning of an extended period of weakness?

The answer to this question will be determined by whether the Indonesian government adopts a pragmatic response, or doubles down on an economic course that diverges sharply from the successful path adopted in the post-Asian crisis period.

Can Vietnam Become a New Asian Tiger When New Leaders are Selected in 2016?

In 2016, Vietnam’s ruling Communist Party (CPV) will convene its 12th congress to select new leaders for itself and the country it rules. With new leaders will come new policies, but those who hope for the second coming of reform (doi moi lan 2) will likely be frustrated. Any changes will be insufficient to turn Vietnam into a new Asian tiger.

U.S. Economic Growth is not Exactly Living up to Forecasts

As I read the news and watch the markets, I am struck by the yawning difference between what is going on with the economy and what is happening with equities.

I know the worn out arguments.

People are buying stocks because they do not have many choices. That’s fair, to some extent. The return on stocks (dividends, expected earnings growth) is higher than the interest paid on bonds.

Indonesia’s Nationalistic Economic Agenda Contradicts the Need for Foreign Investment

On 29 April, Indonesia executed seven foreigners and one Indonesian for drug offences. The refusal of President Joko Widodo (Jokowi) to offer clemency despite pleas from foreign leaders has been analysed in a number of ways. Most have interpreted Jokowi’s decision as that of a contested head of state in a fragile democracy heeding public opinion, which seems to overwhelmingly (86 percent in a recent poll) support the death penalty for drug trafficking. But was his decision instead a deliberate act of public diplomacy, designed to send signals to those missing the Sukarno era?

Is Fed Chair Yellen Correct About Equity Valuations?

I have been touting a major top in stocks, especially in the Dow and the largest small-cap index, the Russell 2000. With each new bubble, we reach higher highs, and then crash to lower lows. It is such an obvious megaphone pattern that I am not sure how anyone could miss it. Central banks continue to stimulate us out of each downturn and crash with free money and zero interest rates. How could that not create a greater bubble and greater crash to follow… unless you really can get something for nothing?

Bank of America Offers Its Two Cents on Conditions Affecting American Economy

Bank of America, the second largest bank holding company in the United States, and the 23rd largest company in the world in 2015 according to Forbes, knows a few things about doing business. That is why when Bank of America offers a report regarding its opinions about current events affecting the United States’ economy, analysts, politicians, and investors all tend to take heed.

South Korea Sees Signs of Economic Recovery

After nearing a recession as growth slows and exports slide, South Korea is seeing hints of an economic recovery.

According to South Korea’s Finance Minister, industrial output, consumption, and construction investment are seeing steady improvement in April, indicating that the slowdown might have reached a bottom and a recovery could be on its way.

A Preview of Emerging Market News and Events

EM assets are again being pulled in two directions. EM equities are getting a boost from the PBOC rate cut over the weekend, while EM currencies are starting soft this week as the strong US jobs report puts Fed lift-off back on the radar screen. US retail sales for April come out on Wednesday, and another strong report would likely lead to another leg higher for the greenback.

Indonesia’s Widodo Faces Mounting Pressure over Economic Performance

When he took office as President of Indonesia, Joko Widodo vowed to lift the largest economy in Southeast Asia to 7 percent average annual growth during his five-year term. However, since taking office in October, the economy has actually slumped and contracted, showing growth of only 4.7 percent in the first quarter of 2015. Thus, in the first week of May 2015, Widodo summoned his economic ministers to discuss the situation. To his surprise, his ministers were not the only ones to arrive.

China Cuts Interest Rates for Third Time since December

China has cut interest rates for the third time in just six months as the country struggles with falling growth rates. The People’s Bank of China cut interest rates to just 5.1%, a 25 basis point decline that is aimed at encouraging more lending, more borrowing, and more investment.