United States, Japan and China Underwhelm Economically; East Asian Markets Mixed but Europe Rises
United States, Japan and China All Underwhelm in Q1 2013 (AP)
International investors may have thought last week was their birthday, as they received three different presents. Last Friday, news emerged that the U.S. economy grew only 2.5 percent, lagging behind analysts’ estimates of 3 percent. The U.S. report followed Japan’s economic performance data (which reflected its consumer prices fell only .9 percent in March) and China’s report of its slowing economy. Markets worldwide took this as a sign that central banks will have no recourse but to continue easy-money policies. Together, this triple header of underperformance was enough to see international markets off to a strong start this week.
East Asian Markets Mixed, European Markets up to Start the Week (Bloomberg)
Based on the worse-than-expected news out of the United States, China and Japan last week, global markets are starting the week on a mostly positive note. East Asian markets kicked off the day with mixed results: Japan’s Nikkei 225 dipped .3 percent, Hong Kong’s Hang Seng rose .15 percent and Shanghai’s Composite Index slipped .97 percent. In Europe, green is the color of the day with the STOXX 50 Index up .66 percent, England’s FTSE ahead .03 percent and Germany’s DAX rising .34 percent. We’ll see how these numbers look tomorrow, after the S&P/Case-Shiller home-price index for February is scheduled for release.
Welcome to Tech Valley: Time to Buy or Say Goodbye? (Bloomberg)
U.S. tech stocks have fallen to their cheapest levels in seven years, with earnings expected to fall a further 5.5 percent during the next three months, according to more than 2,000 analysts tracked by Bloomberg. Currently, the industry is 9.1 percent cheaper than buying the S&P 500 and trading at a bigger discount than seven of the nine other industries tracked, trailing only energy and financials. Industry bulls expect that these values will be too cheap to pass up for investors. Bears counter that technology will continue to plummet as companies and governments cut back tech spending to combat slowing economic growth worldwide. We’ll see who proves right or wrong, as the next quarter unfolds.