by George Leong, Investment Contrarians:
We are seeing some signs of selling in the global markets.
In Japan, the overblown Nikkei 225 retrenched 1.45% last Tuesday after traders were disappointed that the Bank of Japan (BOJ) failed to offer up new stimulus. Sound familiar?
Just like in the U.S., the economic renewal and surge in Japanese stocks is being driven by the availability of easy money—and traders want more of it. The BOJ’s non-move to inject more stimulus clearly supports my view that the stock market is dependent on easy money.
On this side of the Pacific, there’s concern the Federal Reserve may begin to reduce its bond buying as early as after next week’s Federal Open Market Committee (FOMC) meeting. Of course, I doubt that will happen, given that the unemployment rate increased to 7.6% in May and jobs creation remains tepid.
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