Big Picture Market Perspectives 2/10/17 (NYSE:DXJ, NYSE:HEDJ, NYSE:FXI)


February 10, 2017, 4:00pm EST                                                                                Invest Alongside Billionaires For $297/Qtr

Stocks finished the week on record highs.  We talked earlier in the week about Trump’s meeting with Japan’s Prime Minister and his economic and finance advisors.

I suspect that Trump will come away, after a weekend in Palm Beach with Abe, learning that Abenomics is good for the U.S., and good global growth and stability (in the current global economic environment).

And one of the keys to success in Abenomics is a weaker yen, which translates to a stronger dollar.  As I’ve said, the weak yen has been pulled into the fray with Trump’s tough talk on trade imbalances, but his beef on currency advantage is really directed toward China – not Japan, not Mexico, not even Europe.

With that, and with the assumption that the yen may be pardoned for a while, the dollar bouncing against the yen as we head into the weekend. And it looks like we may see a technical breakout and an even higher dollar, lower yen in our future.

usdjpy feb10

And Japanese stocks look set to break out too, to catch up to the strength of U.S. stocks. The Nikkei is 8% off of the 2015 highs, while U.S. stocks are on record highs, and 8% ABOVE its 2015 highs.

nikkei feb10

Another catch up trade: German stocks.  Despite the growing attention given to the French nationalist candidate, Le Pen, who has been anti-euro and anti-European Union, right or wrong the bond market isn’t showing any new interest in disaster insurance in Europe, nor is the euro.

german dax feb 10

With that, German stocks look very good, still about 8% from the 2015 highs, and the technical correction clearly ended last summer.

Lastly, let’s take a look at another big sleeper stock market, China…

china stock feb 10

You can see how Copper is on a big run (up 10% ytd).  That typically correlates well with expectations of global growth.  Global growth is typically good for China.  Of course, China is in the crosshairs of Trump’s fair trade movement, but if you think there’s a chance that more fair trade terms can be a win for the U.S. and a win for China, then Chinese stocks are a bargain here.

Have a great weekend!

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