Friday Charts: China Dethroned And Japan Joins the 'QE Infinity' Club

by: Lou Basenese

If you’re a newbie to the Wall Street Daily Nation, you’re in for a treat. Each Friday, I try to zip my lips and let some carefully selected graphics do the talking for me. This week, I’m dishing on China, Vietnam, Indonesia, the risks of tweeting while investing and, last but not least, yet another fledgling real estate recovery.

Pictorial enlightenment begins in three, two, one…

Trust, But Verify

The internet is a blessing because it accelerates information sharing. But it’s also a curse because it accelerates misinformation sharing, as well. Case in point: Tuesday’s tweet from the Associated Press saying, “Two explosions in the White House and Barack Obama is injured.” Although completely false, it caused the Dow to collapse 150 points in four minutes flat.

There’s a lesson to be learned here: Trust, but verify every bit of information. Heck, the same goes for information I share with you, too. I won’t be offended. In the end, the more informed you are, the better (and more profitable) investor you’ll end up being.

Move Over China… It’s Indonesia’s Turn

On Wednesday, I downplayed the IPO prospects for China-based LightInTheBox (Proposed Ticker: LITB). Why? As I stated then, “It plays up its ability to source products cheaply, largely because of the company’s location in China. But the problem is, China is becoming less and less of a source for low-cost goods. So that advantage is fleeting, at best.”

Today, I’m backing up my bold claim with proof…

Hourly compensation costs in China are now roughly 50% higher than in Vietnam, and roughly double the cost in Indonesia. So forget China as the pathway to profits because of its low production costs and booming exports. It’s Indonesia and Vietnam’s turn. Doubt me? Wait until you get a load of the next chart.

And because I know someone’s going to ask for it, here’s a list of all the Vietnam and Indonesia ETFs: Market Vectors Vietnam ETF (NYSEARCA:VNM), Market Vectors Indonesia ETF (NYSEARCA:IDX), iShares MSCI Indonesia Index (NYSEARCA:EIDO) and Market Vectors Indonesia Small Cap ETF (NYSEARCA:IDXJ).

Watch Out! Hedge Funds Are Turning Japanese Now, Too

As some readers like to remind me, I was way early and dead wrong about my call to buy Japanese stocks. Yet, I kept banging that contrarian drum time and time again. (At least six times, by my count.) How could I be so stubborn? Because I’m Italian. And, of course, because Japanese stocks were just too darn cheap to stay that way forever. Lo and behold, I (finally) look like a genius. The best-performing stock market in the world in 2013 is – you guessed it – Japan.

Who said unlimited money printing is a bad thing? Bank of Japan Governor Haruhiko Kuroda certainly didn’t. Neither did Fed Chairman Ben Bernanke. And not this guy, either! (At least, when it comes to investing.) Apparently, hedge funds are coming around to this realization, too. Not to mention that CNBC reports that Japan was one of the hot topics at Goldman Sachs’ 5th Annual Hedge Fund Symposium this week in New York.

So if you’re on the hunt for a momentum trade in an international market, go with Japan. Or Indonesia. Or Vietnam. You’ve got choices.

Go Ahead and Call it a Comeback!

Don’t look now, but the commercial real estate market is recovering, too. The latest reading of the Architecture Billings Index (ABI), which tracks demand for architectural services (duh), checked in above 50 for the eighth consecutive month. (A reading above 50 indicates an increase in billings.)

The expansion is widespread, too. As Bill McBride of points out, “Every building sector is now expanding… This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.”

Naturally, there’s a lag between designing plans for a building and actually breaking ground. It’s about nine to twelve months, according to the American Institute of Architects. Much like the residential real estate market, that means we’re still in the early stages of the recovery.

Go ahead. Call it a comeback! It won’t kill you.

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