Feb 17, 2024 - Economy

The stock market is not the economy, U.K. and Japan edition

Data: Yahoo Finance; Chart: Axios Visuals
Data: Yahoo Finance; Chart: Axios Visuals

Japan and the UK are both in recession — but the former's stock market is on a tear, while the latter's has been going nowhere for years.

Why it matters: It's a salutary reminder that economic health and stock market performance are two entirely different things.

Between the lines: Both Japan and the UK are implementing major stock market reforms.

  • The changes in Japan are shareholder-friendly, forcing companies worth less than book value to justify themselves.
  • On the other hand, the changes on the London Stock Exchange — "the ailing UK bourse," as Bloomberg describes it — are being protested by shareholders who worry that it's entering a race to the bottom in terms of accepting new listings from dubious companies.

The bottom line: While the Japanese stock market is increasingly being seen as a place to unlock value, its UK counterpart feels more like a club no one wants to be a member of anymore.

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