Japan Faces Market Stress, But Opportunities Remain
Commenting on Japan, Orton noted, “What we are seeing in Japan is symptomatic of what we are seeing across a lot of the global markets and in the US in particular where there is a lot of risk off sentiment. Japan suffers from uncertainty with respect to currency moves. You have seen investor hesitancy around a large fiscal package, concerns that the BOJ might be behind the curve with respect to addressing inflation in the country. And as a result, you are seeing a push back from investors in investing in bonds and you are also seeing extreme pressure being put on the yen.”
He added that intervention from Japan’s finance ministry might stabilize the situation. “On the flip side though, you are at least hearing the finance minister stepping in and saying that we are going to defend the currency. We have seen them do this before, especially on low liquidity days before holidays. So, perhaps they will step in to intervene. But similar to how I view the rest of the global markets, I think what we are seeing in Japan does not reflect the underlying fundamental strength of the overall market. So, once we can hopefully start to see some stability, there will be a lot of opportunities for investors and in Japan, there will be opportunities both across fixed income and in the equity markets given the selloff that we are seeing.”
On his investment approach, Orton said, “I am buying on dips, but right now I am being very-very selective about how I do it. When you see markets that move the way that they did today, as frustrating as that can be as a manager of money, you just have to sit back, you have to respect the charts, and you have to be smart about when you start to put money to work.”
Gold and Bitcoin: Divergent PathsOrton also weighed in on alternative assets. “So, gold, I do not think so. So, you are seeing some strength with respect to gold or at least it hold up given that it has also become more of a speculative asset. I am quite optimistic on where gold goes. It has been a critical balance to my portfolios really throughout this entire year and I have increased my exposure this year as you have seen traditional correlation start to break down.”On Bitcoin, he added, “Bitcoin on the other hand is much more of a true, I would say, risk on, risk off play. It does not have that rooted fundamental reason for it to do well. Central banks are not using it. And so, when you see this weakness in Bitcoin, it is reflective of just weak risk sentiment. And I do think there could be scope for it to fall further, but I also think there has been a tremendous amount of selling pressure and I do think we are getting near the point of capitulation.”
India Holds Up Amid Global AI Concerns
Turning to India, Orton expressed optimism: “India is in a good place. I mean, you have seen India hold up well. It is why I like India as a portfolio diversifier also because earnings have been quite strong this season from India. So, I do not think India has caught up in the same concerns around AI and valuations that a lot of other markets are, especially the US.”
He highlighted opportunities in the AI and tech space, stating, “I am actively looking for places to buy the dip in the data centre trade, the electronic equipment trade, more on the industrial side, as well as the highest quality hyperscalers that are now trading anywhere from 18 to 22 times forward multiples, which is really-really low. After today’s selloff, Nvidia is trading at 26 times forward earnings. It is hard to argue that is expensive for a company that is growing year-over-year 55%.”
US Rate Outlook
Regarding US interest rates, Orton indicated a cautious stance: “So, we are more likely to get a pause at this point. I was a little bit surprised by how hawkish the turn was when we got the October meeting notes. So, it seems like a majority of FOMC board members that are hesitant to cut rates in December and we are not going to get any useful economic data in the US that is timely before the FOMC meeting. So, I do think it is probably going to be a pause.”
He added that the rate-cutting cycle could still resume in 2025.
As global markets navigate volatility, Orton’s message is clear: patience, selective investing, and understanding fundamentals remain the keys to finding opportunity amid turbulence.
