GS raise Nikkei225 target. The ultimate short term contrarian indicator?
Unsurprisingly, Goldman Sachs have upgraded their target for the Nikkei225 to 16.000, after a rally of more than 50% since November 2012. This apparently not only as a result of increased earnings at exporters due to Yen weakening and bullish global earnings expectations for the second half of 2013, but also on the expectation that the BoJ’s monetary stimulus along with other so-called ‘Abenomics’ effects will have a significant effect on economic activity and earnings over the next two fiscal years.
One can’t help wonder if this is the ultimate contrarian market signal, the way it has been in the past. Goldman Sachs have fairly decent company research notes, but their market strategy and particularly their market timing in Japan has often been a good contrarian indicator. They only caveat raised in their forecast is “the possibility of policy implementation failing to meet investor expectations.”