InvestmentFlows News & Analysis
2 articles
Market Mood
Yen Intervention Sparks 5 Trillion Yen in Foreign Asset Purchases
Japanese investors net bought over 5 trillion yen of foreign equities and long-term bonds in the two weeks ending August 15, 2023, a significant increase compared to over 300 billion yen in net selling in the prior two weeks. This activity follows a historic yen intervention, with the yen strengthening from around 164 per dollar to roughly 155 before weakening to about 159. Experts note that as long as borrowing costs in Japan remain low compared to returns overseas, the carry trade will continue. This is relevant for ordinary investors as it indicates a shift in investment strategies towards overseas assets.
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Goldman Sachs Predicts Increased S&P 500 Volatility Ahead of Elections
Goldman Sachs expects increased volatility in the S&P 500 as the U.S. midterm elections approach in three months. Analysts led by Ben Snider noted that historical trends indicate rising economic policy uncertainty during election seasons. The S&P 500 has delivered a median return of 0% in the months leading up to elections since 1974 but typically gains 6% in the following three months. For ordinary investors, this trend implies the potential for market fluctuations that can impact equity investments around the elections.
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