Asian Currencies Feeling the Sting (CNBC)
For weeks now, uncertainty about how long the Federal Reserve’s stimulus support would last has been the primary driver pushing Asian currencies lower. Now it looks like a whole host of pressures will be piling on in the months ahead. The Japanese yen’s fall, sovereign risk re-assessment and deteriorating current-account deficits are weakening the monetary growth achieved in the region since the 2008 global financial crisis. The “hot-money” that had flowed into places like India, Indonesia, Australia and other countries had been covering up fundamental weakness. Now that those funds are no longer pouring into the region, those poor fundamentals remain. And they’re taking a toll on currencies, with Australia’s dollar falling some 10 percent from this year’s high. How low these currencies go remains to be seen.
Netflix Teams up with DreamWorks (Reuters)
Investors in Netflix soon will be streaming more profits into their portfolios, after the video-delivery giant signed its largest deal ever for original programming with DreamWorks Animation SKG. The agreement also means that for the first-time, DreamWorks’ programs will be presented as a branded set of shows. The first show launches in December. It is a new show called “Turbo: F.A.S.T.” based on the latest DreamWorks theatrical release: Turbo. This show is designed to push new subscriber growth for Netflix as many viewers are looking toward Internet-based TV for alternatives. We’ll see how much it pushes share appreciation as well.
The Other Side of the Story: Easing to Spur Double-digit Stock Growth (Bloomberg)
Even though Asian currency traders may beg to differ, there’s evidence that supports the view a reduction in the Fed’s quantitative-easing (QE) stimulus will actually spur the economy. According to data compiled by Bloomberg, the last four times that the Fed has begun to raise interest rates, the S&P 500 has gained 16%. Bears aren’t buying it though, saying that economic growth expansion is still the slowest it has been since WWII and pulling support will only slow that growth. As you might imagine, Bulls see just the opposite. According to John Canally, of Boston-based LPL Financial Corp, “The Fed tightening, that’s good for stocks.” As a reduction in QE stimulus would indicate the Fed’s confidence in a self-sustaining market. Who’s right? Who knows, but we’ll have a better idea after this week’s Fed meeting.