In today’s briefing:
- Ohayo Japan | Big Tech Capex Tests Wall Street Nerves
- Japan Morning Connection: Strong Mega-Tech Numbers AH Will Boost the Mood After Meta and MSFT Drag
- Thematic Report: Aluminum’s Growth Story- Investing in the Future of Essential Metals
- The Great Divide: Fashion Retail’s Oligopoly
Ohayo Japan | Big Tech Capex Tests Wall Street Nerves
- Tech-Led selloff as Meta (-11%) and Microsoft (-3%) slumped on higher spending forecasts; health stocks rose on Eli Lilly’s strong results.
- Nikkei hit record highs after BoJ held rates at 0.5%; yen weakened; Trump-Xi summit yielded tariff cuts and rare earth export agreements.
- Major Japanese firms posted strong profits (Fujitsu, Astellas, Konami), while Panasonic and Nissan warned of US tariff impacts and weaker earnings outlooks.
Japan Morning Connection: Strong Mega-Tech Numbers AH Will Boost the Mood After Meta and MSFT Drag
- Apple misses in China but its iPhone is nonetheless on track for its best quarter ever.
- Western Digital highlights AI’s insatiable demand for memory. Disco down but not out, while Lasertec looks too much.
- Renesas closes -4% yesterday but comments that AI/data center demand is on the rise should help this re-bucket.
Thematic Report: Aluminum’s Growth Story- Investing in the Future of Essential Metals
- The aluminum market is experiencing tight supply, rising premiums, and increasing demand driven by infrastructure and clean energy projects. LME prices have surged 7-8%, indicating a structural shift.
- Higher aluminum prices and regional premiums are positively impacting earnings. Key producers like Hindalco are benefiting from strong operations, cost efficiencies, and favorable market conditions.
- Sustained supply constraints and rising premiums, especially from China’s cuts, are expected to drive LME prices higher, ensuring robust growth for Hindalco in the medium term.
The Great Divide: Fashion Retail’s Oligopoly
- In this in-depth review, it is clear that while Japanese clothing markets had a solid year in FY2024-25, once again the top 100 retailers outperformed by a large margin.
- This meant they surpassed 71% share of the market but, within the specialty market alone, the top 10 retailers own 34%. This is now a clear oligopoly.
- There are no signs of the situation changing either but rather the capacity of the leaders to invest should further expand share at the top.
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