Abe-nomics Stimulates Japan's Recovery

Mike Santoli analyzes the morning business headlines.
8:00 | 05/16/13

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Transcript for Abe-nomics Stimulates Japan's Recovery
Market futures were mixed today after the new records by the Dow and S&P 500 ahead of weekly jobless claims and some earnings reports. Let's bring in Mike -- toll now from Yahoo! finance to break down those numbers. And the top business headlines of the day good morning Mike. Good morning so my initial weekly jobless claims came out this morning what did they show. Actually showed an increase in weekly claims that I was a bit of -- disappointment they went out about 30000. To 360000. It was above estimates what happened here it looks like the little bit of give back for a couple straight weeks of extremely low readings. So the trend is still in place what we have. Relatively. You know contained level of layoffs unemployment claims are definitely been in a positive trajectory. But this one was a little bit of -- -- so what would you take away from these numbers and anything significant. Not too much except that we -- what we're no longer off on a real time basis improving the labor market -- the pace we thought two weeks ago so it really seems like. Again the trend is more important for -- -- still looks like worse were firming up. On the job front but I've not yet really accelerating. OK so still good news but not great artwork looks ahead to Japan -- -- really good news it looks as though they're having a strong economic recovery right. They have a burst of economic growth in the latest quarter just reporters are two point 7%. Gross domestic product growth there which is. Really a high number for Japan over the last twenty years they tend not to sustain. Rates like that that's all as a result of vote mostly as a result anyway of the policies of the prime minister -- who. Is really trying to kind of -- Japan out of this stagnation it's been in for a long time. Trying to encourage lot more consumption a lot more investing in riskier activities and businesses to start spending more so so far toward exports are up consumer spending up. But it's hard to say whether it carries -- had. You know beyond this initial right kind of burst of -- The so called actions -- bay. Bay nominate Barack. Give -- and it doesn't need to let me just outlined a few things but what -- an attorney tells of his policies. Well essentially it's very explicit plan to stimulate the economy by. Depreciating the yen they do believe that the -- is -- too hot too valuable relative to other currencies -- explicit targets is that we wanna get that down. They're gonna essentially like there -- Federal Reserve they're sort of not cause -- printing money to try to do that and -- also have a massive government stimulus program increasing. Your Japanese government spending as a percentage of the overall economy. So that's meant to actually get a bit of a jolt. Two economic growth and they're being very exposed they wanna get inflation in Japan up to 2% now that's a low level for most parts of the world. It's actually a high level in Japan -- been plagued by deflation so it's essentially you know our Federal Reserve policies our 2009. Stimulus from the federal government. All combined with very explicit targets. In terms of what they want their economy to look. So they've been following a little bits of our -- there is there anything that the Fed might look at Japan and say hey maybe we'll try vat or -- we -- at this point we're already recovering. Well we're past that in terms of the performance of our economy and -- Federal Reserve has to has a different problem really which is to try to speed the level of growth and hiring. In the in the workforce not so much to get inflation higher now they do want to make sure inflation stays around that 2% Federal Reserve target which -- and we've been kind of running below but it's not as much in the state of emergency also we do not have an explicit policy to make the dollar weaker in fact the dollar. Has been somewhat stronger in recent months -- and -- -- plan that European vacation. I've been holding off at an -- little eyeliner. -- -- -- -- about Google and had its fake Ohio conference yesterday announcing a new music streaming service to compete. With the likes of Spotify. And also a revamped maps app is Google this year's hot stock this year apple is -- war. It's certainly been very hot I -- the stock is trading near an all time high above 900 dollars a share. It's it's not so much this year's apple I don't. Being in this sense of how popular the stock has become broadly. Among Republican hasn't necessarily been one of those I love the product I'm gonna buy the stock the way apple was when it was -- -- frenzy. Last year but definitely in terms of being this big tech Bellwether. Company everybody knows dominant in its area. And definitely with -- sort of very gaudy looking -- stock price -- in that sense it's very similar but I I think that the the economic fundamentals of the business fundamentals are somewhat different. Our schools not -- -- driven it doesn't have to worry about you know this year's hot product of getting this place. By somebody else is gonna come out of the top product next year so some similarities but I don't really think the aside from that phenomenal stock price it's quite the -- Google is big and getting bigger -- What about an up and comer as investors are looking to invest and someone -- just. Going to be looking to -- -- I don't think so -- based on where the stock is gone -- right now it's up a 130 some were more percent. This year looked at companies doing phenomenal things everyone loves the electric car car that -- -- -- now the new model. It's getting raises a very high priced niche product this is -- the vessel is not gonna take over the world. What the car market but what what's going on here. Is a little bit of a Wall Street battleground. A lot of doubters who think that the business really is it worth nearly what it's traded for right now the people were betting against -- other people are saying that they're kind of enamored of the whole story line must just borrowed a bunch more money from Goldman Sachs and by his own stock. So it seems like there's a lot of kind of financial gamesmanship going on right way back there's tremendous momentum it's not really investment it's a trade right -- six months ago Ireland was worried about it now looks like it's. Hanging panel that -- always saying it financially it's more stable the company is right now but died in terms of where the stock is valued it's all on kind of hopes and prayers and dreams of the future -- certainly -- -- nice -- not. To many of us can afford -- -- -- -- Earnings reports coming out today Cisco posted big profits crack. They did Cisco had a nice gain in profits better than expected the stock responding nicely to back. Here -- funny that there's all these what we call old tech companies are all of a sudden undergoing a belated revival this is nothing is ten years Intel. Microsoft now -- -- Corning now you have. Cisco kind of joining that party a little bit basically they gave. Riveted toward the cloud of data centers and away from kind of a PC centric world and so they they're getting some update on that -- -- emerging markets growth for its technology products actually very strong so a decent story for a bit about a pick up a little -- Yeah I mean up 14% -- -- is this stock often seen as a Bellwether for other tech stocks. It's sort of stopped seeming like a Bellwether because so many of these very large tech stocks you know they look cheap for ten years or so but it could really show anybody that they could grow so I think the Bellwether of it's definitely participating in this trend. Where you know these very large dominant companies are finding ways. To prosper a little bit in in the new networked world. All right let's talk about another large company that isn't faring so well right now Wal-Mart didn't meet expectations. It in what -- you know they've had a bit of a struggle now even though the company. You know has obviously always dominating. Just the retail space they actually have had a bit of a struggle to -- sales this year. Mostly because of delayed tax payments in some. People -- you know working folks have not had as much money to spend as as people on the upper income levels that's been weighing on -- also believe they're not. Grocery inflation has kind of calm down other words -- prices of food are not going up as much. That -- wal mart's top -- a big part of their sales so essentially they're just having a little bit of of a stall here in terms of sales -- their outlook for the next quarter was a little bit muted. So it's not as if things are bad -- just that they they really don't have a lot of levers to poll to have that growth show up in the next couple quarters -- -- -- Angela thinks less volatile and take a look at the boards like Mexico -- morning so far down about ten points at this point. -- -- toll from Yahoo! finance thank you for joining us thank you very much.

This transcript has been automatically generated and may not be 100% accurate.

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