Why Did U.S. Corporate Profits Plunge in Fourth Quarter?

The video discusses the US GDP growth revision to 1.4% and the significant decline in corporate profits. It highlights concerns about market valuations, potential risks from dollar strength, and the impact of global economic factors. The discussion shifts to the Japanese market, examining corporate culture changes and governance challenges. The video emphasizes the importance of profitability and global growth for market stability.

What was the revised annualized growth rate for the US GDP in the latest quarter?

• 0.8%

• 2.0%

• 1.4%

• 1.0%

What is a potential risk to equities if corporate profits continue to decline?

• A straight line up in stock prices

• Stable interest rates

• Increased corporate buybacks

• Another leg down in equities

What are the two main reasons investors might be long on the Japanese equity market?

• Confidence in the US dollar and European markets

• Anticipation of higher interest rates and stable inflation

• Expectation of a weaker yen and belief in corporate culture transformation

• Belief in a stronger yen and government reforms

What is a significant challenge in transforming Japanese corporate culture?

• High inflation rates

• Activists' past failures

• Overnight changes in governance

• Lack of government support

Which index has underperformed the Nikkei 225 this year despite government support?

• S&P 500

• Nikkei 400

• Dow Jones

• FTSE 100

What factor contributed to the underperformance of Japanese indices in the first quarter?

• Rising inflation

• Hedge fund deleveraging

• Stable corporate profits

• Increased foreign investments

What is a key reason for the hot money flows pulling out of Japan?

• Hedge fund losses elsewhere

• Stable yen value

• Successful economic reforms

• Restart of inflation