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The Nikkei rallied +0.5% overnight (after holding @Hedgeye support) on the strength of a better-than-expected 2Q GDP report. The headline figure came in 20bps above consensus expectations of a -1.8% QoQ annualized decline, while the YoY rate of change accelerated to +0.7% from an upwardly revised -0.8% in 1Q.
Japan remains our favorite international equity allocation. It continues to outperform, down -0.9% WoW versus:
- -3.1% drop for the EuroStoxx 600 Index,
- -5.1% plunge in the DAX, a -4.2% fall in the CAC,
- -2.9% drop in the FTSE 100,
- -2.9% drop in the Hang Seng and
- -2.1% decline in the KOSPI.
Japan continues to outperform international peers from a fundamental perspective as well: underlying dividend growth in 2Q was up +16.8% in Japan vs. only +10% and +8.6% in the U.S. and Europe, respectively.