Kyodo Securities: Worse than expected jobless claims data sparks rout in equity markets.

Kyodo Securities, the Asia-based asset management firm is apparently unsurprised by the higher than expected number of U.S. workers filing initial claims for jobless benefits. The numbers provided evidence that layoffs continue, and jobs remain scarce, the Asian-based investment house said.

The news, together with worries about debt levels in EU member nations, sparked a sharp selloff in global equity markets. The Dow Jones industrial average fell 270 points or 2.6 percent and ended the trading session below 10,000.

A source close to analysts at the firm said that commentators who had remained inexplicably bullish on the prospects for recovery in the US economy were now witnessing their chickens coming home to roost.

Despite the efforts of the Obama administration, unemployment continues to remain stubbornly at 10% although Kyodo Securities believes that the true figure is closer to 16 or 17% unemployment.

The firm’s analysts believe that the jobs report for the first month of 2010 is likely to surprise analysts by showing an additional loss of some 20,000 jobs in the world’s biggest economy against expectations of a positive jobs month in the region of 10,000 and has advised clients to expect a continuation of the selloff in equity markets around the world.

“Kyodo Securities”: despite suffering its biggest one-day fall, gold is still the best protection.

“Kyodo Securities”, the Asia-based boutique broker, has advised clients against selling their holdings of gold despite the metal suffering its biggest one-day fall in well over a year.

The price of gold fell by more than $50 on Thursday following worse than expected economic data coming out of the United States. The fall came on the same day as the Dow Jones industrial average lost some 270 points off the investors became more concerned at sovereign debt default issues in the euro zone.

A source close to “Kyodo Securities” said that although many investors are fleeing to the perceived safety of the US dollar, ultimately gold will provide the most effective protection against government profligacy in the months ahead.

The source pointed to speculation that central banks in general will be forced to continue to provide support for their economies in light of the fact that they have already spent trillions of dollars in an effort to boost economic growth and that this would require a return to the quantitative easing that has proven so controversial in the investment community.

“Kyodo Securities” analysts believe that gold may return to retest $1000 per ounce during the course of the current selloff but they suggest that this provides investors with a perfect opportunity to protect their wealth against what it expects to be a concerted effort by central banks to inject more liquidity into the moribund economies.

“Kyodo Securities” – Fear has returned to global equity markets with a vengeance.

“Kyodo Securities”: It would appear that global equity market volatility has returned with a vengeance. After a slew of global economic data that has highlighted the inherent weakness of the recovery underway in the developed world, investors are no longer able to ignore the fact that the absence of the consumer and the high level of in indebtedness of major developed economies means that sustainable recovery is still some time away.

Sources close to “Kyodo Securities” believe that markets have generally ignored relatively upbeat earnings reports from several economic bellwethers and have, instead, focused on the relative inability of companies to generate additional revenues.

The unwinding of the dollar carry trade appears to be in full swing with markets around the world looking sharp falls with alarming regularity.

“Kyodo Securities”, however, have advised clients to expect the current selloff in equities to provide excellent buying opportunities in the weeks ahead. The Asia-based boutique brokerage says it expects equity markets to retest the March 2009 lows by the second quarter of 2010.

The firm is apparently preparing a short list of suitable equities traded on various exchanges which it intends to add to its conviction buy list once the lows are retested.

“Kyodo Securities” believes that the current selloff will provide investors with the last opportunity to buy in to the stocks of some of the world’s most innovative companies at once in a generation prices.