Yesterday when we were talking about Hungary's stock market we brought up how two thirds (61 out of 91) of global benchmark equity indexes are in positive territory so far this year. If we expand our view to all 321 equity indexes that we track the percentage is even better with 83% in the black. One of the unfortunate 17%, and the second worst performer of all 321 indexes, is the Japanese TSE Mothers Index.
Like the #1 entry in that list, the Chinese ChiNext Price Index, the TSE (Tokyo Stock Exchange) Mothers Index is also composed of high growth / high risk companies. So regardless of direction, it isn't terribly surprising to see both of those indexes at either extreme of the list.
If we look at the line chart, we see that the Mothers Index is sitting ominously at the March 2011 Tsunami lows.
If we add GDP growth and additional equity indexes to the above chart, the picture remains bleak.
With a debt to GDP level of over 200% and a stock market that currently sits at 25% of its high from 20 years ago (among other problems), the economy in Japan faces someone of the toughest challenges on the planet. The Japanese stock market in particular should be a flashing red light to those U.S. investors convinced of the inevitability of a U.S. stock market bounce back.
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