“Goldilocks Is Over”: Japan’s Largest Life Insurer Is Now Selling Rallies
by Tyler Durden
ZeroHedge.com
Thu, 02/22/2018
While stocks are having second thoughts this morning as euphoria appears to have returned to markets for the time being, yesterday’s abrupt reversal in the S&P to the FOMC Minutes revealed that for many, the era of goldilocks may be ending ending. This morning, none other than Japan’s largest life insurer, Nippon Life Insurance, confirmed as much, saying that it will sell Japanese shares when they rise further, as the rally in risk assets driven by expectations of a “Goldilocks” scenario continuing is nearing an end, its chief investment officer told Reuters on Thursday.
Nippon CIO, Hiroshi Ozeki also said that the insurer expects the dollar to soften further against the yen but it is ready to buy the U.S. currency when it falls below 105 yen.
Agreeing with Nomura, which last week said that investors will have another chance to buy lower, Ozeki said that although global shares have bounced back in the past week or so, Nippon Life expects risk assets will be pummeled again.
But his most notably observation was that the era of “Goldilocks” is on its last breath: the CIO said market expectations of a scenario that is neither too hot nor too cold are based on the assumption of three “moderations”: moderate economic growth, moderate inflation and a moderate rise in asset prices.
“When any of those three disappear, there will be market corrections,” he said. ”Since Abenomics began (in 2012), our stance on Japanese stocks has been to ‘buy-on-dips’.
“But with their valuations at lofty levels” he said “we are no longer increasing our stock portfolio.”
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