[Present state recognition of fundamental]
In the US market last week, many quarterly
financials were relatively strong, buying was dominant. In the medium to long term, there are fears of a slowdown in the
global economy due to the lack of creditworthiness of European banks and
concerns about credit contraction, the economic slowdown of emerging economies
such as China, the rate hike of the Federal Reserve and the stagnation of crude
oil prices, and We need continued attention to the geopolitical risk of the
Middle East and Ukraine.
The difference in the yield spread between
the US and Japanese markets is 2.52 points less than in the Japanese market,
taking into account the 2018 OECD's real GDP forecast announced. The reason for
the bargain is due to the difference between S&P500 's PER of 18.9 and the
Nikkei average adopted stock price PER 14.3,and Japan-US interest rate
difference, GDP growth difference. This is because the difference in GDP growth
between Japan and the US in 2018 is 2.6% more than the OECD forecast (Japan
will downgrade or US will be revised upward) against the current Nikkei average
price, Or it can be interpreted that the Japanese-U.S. Market will be in
equilibrium, because the expected PER of the Nikkei average hires will be
around 22.4(the results for the current term will be revised downwards or the
Nikkei average will be around 31320 yen) By the way, the Japanese market is
cheap about 11360 yen.
[Conditions for Nikkei average rise]
In the future, the following assumptions
are necessary for the Nikkei average to rise further.
① Rising US market
② UP of expected profit increase rate for
the current term more than before
③ Expansion of the interest rate
differential between Japan and the US and further depreciation of the yen
④ Upward revision of Japan's 2018 GDP
estimate (now + 0.98%) by OECD
⑤ Foreign investors over-buying
Looking at recent movements
① Last week's NYDow weekly foot was positive.
The daily bar is on the 200 day line, and it is on the cloud of the ichimoku table.
Nasdaq weekly foot was negative. NASDAQ bar is on the 200-day line and on the
cloud of the ichimoku table. This week we will be paying attention to Housing
related indicators, Quarterly financial results announcement , the Chicago
Purchasing Department Association economic index in July, the ISM manufacturing
economic index in July, employment statistics in July. I would like to pay
attention to whether NYDow will keep updating the historical highs.
② The expected profit increase for the
Nikkei225 hires will be 9.0% with the announcement of the financial results along
with the announcement of the financial results for the Jan-Mar period, and it improved
by 1.1 points compared to 3 months ago. In addition, the growth rate forecast
for the current term is + 8.7%, and it improved by 2.1 points compared to 3
months ago..
③ Long-term interest rates in the US has
risen, the interest rate differential between Japan and the US shrunk from 2.18
to 2.22%, but the exchange rate moved from the 112 yen level to 110 yen level. This
week is estimated to be 111 yen range from 109 yen range.
④ The OECD's real GDP growth rate in 2018
in Japan and the US is expected to be + 1.0% in Japan and + 2.4% in the US, so
the Japanese market is worse by 1.4 points on this aspect.
⑤3rd week of July is a over buying. there
is a high possibility that the 4th week of July is a over selling, and this week we are
forecasting to over selling.
② was bullish factor but ③ was bearish factor. It seems that ①,③,⑤ will be affected
this week.
[Technical viewpoint]
From the technical viewpoint of the
Japanese market, the 200-day divergence rate difference with NASDAQ is 5.1 points
less expensive in the mid to long term (about 1020 yen when calculating the
Nikkei average) and it is cheap. The ratio was expanded by 0.4 point last week.
The Nikkei average on the cloud of the
ichimoku table. The total deviation rate was +5.4%, and the positive range shrunk
compared to last week. The 200 day moving average line deviation rate was + 4.8%,
and the positive range shrunk compared to last week. Since the 3 elements are positive,
the "yellow light" is on for the medium term trend. The Nikkei
average is under the 25 day and the 9 day moving average line, "red light " is on for short-term
trends.
In the US market NY Dow is on the 200 day
line and the 25 day and the 9 day line . It is on the cloud of the ichimoku
table. NASDAQ is on the 200 day average line and the 25 day average line but under
the 9 day line. It is on the cloud of the ichimoku table. In the short term
" yellow light" is on and in the medium term " green light"
is on.
[Outlook for this week]
Looking at the US market fundamentally,
concerns such as the US economic slowdown, sluggish crude oil prices, falling
high-yield bond market, financial market turmoil due to UK's withdrawal from
the EU, global long-term interest rate trends declined, etc. Concern is diminished.
However, there are fears concerning the global economic slowdown due to the US
interest rate hikes, the creditworthiness of the EU regional banks, the economic
slowdown of emerging economies such as China, the sluggish growth of US
corporate earnings, geopolitical risks of the Middle East and Ukraine as risk
factors It exists.
China's real estate prices are flat in big
cities, but the problem of bad loans in China such as excessive facilities has
not been resolved. If you rush up the process, it will lead to a short-term
market decline, and there is a concern that prolonged recession will prolong
the recession.
Also, the most recent LIBOR interest rate
has been updated for the past five years high and conscious of the possibility
of financial unrest.
On the other hand, as favorable material,
the possibility of moderate rate hike in the US, policy expectation of New
President Trump, setting of 2% inflation target by the BOJ, introduction of
negative interest rate and purchase of 80 trillion government bond · 6 trillion
yen ETF, In addition to monetary easing measures, clarification of the duration
of long-term interest rate manipulation and monetary relaxation. Negative
interest rates and purchase of government bonds are maintained for policy
interest rates by the ECB. However, the government bond buy-out frame has been
reduced from EUR 80 billion to EUR 60 billion in April 2017. EU is also headed
towards financial normality.
Looking at the technical aspect, the US
market is upward trend in the medium-term, and no trend in the short term. The
Japanese market is no trend in the medium-term, and downward trend in the short
term.
Analyzing the exchange market last week,
the long-term interest rate in the US rose and the long-term interest rate gap
between the US and Japan expanded, but the exchange rate became a strong yen
movement in the week. From now on, we need to pay attention to technical indicators,
US market trends, foreign exchange movements and foreign investor's trends.
Last week's Nikkei average was almost as
expected range movement. The upper price is close to the assumed line,
approaches 60 yen more and the lower price is around the assumed line about 40
yen lower. This week's Nikkei average is expected to move between the Bollinger
band + 2σ (currently around 20230 yen) and the lower price between Bollinger
band -3σ (around 19840 yen now).
