[Present state recognition of fundamental]
In the US market last week, strong
financial results and announcement of economic indicators continued, buying was
dominant. In the medium to long term, there are fears of a slowdown in the
global economy due to confusion of US politics, raise rate by FRB, the lack of
creditworthiness of European banks and concerns about credit contraction, the
economic slowdown of emerging economies such as China, and the stagnation of
crude oil prices. 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 2.33 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 19.5 and the
Nikkei average adopted stock price PER 15.4 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 2.4% 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 23.9 (the results for the current term will be revised downwards or the
Nikkei average will be around 34260 yen) By the way, the Japanese market is
cheap about 12250 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 positive. 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 , ISM
Manufacturing Industry Situation Index in October, Employment Statistics in
October. I would like to pay attention to whether NYDow is able to maintain
above the 25 day moving average line.
② The expected profit increase for the
Nikkei 225 hires will be +8.7% with the announcement of the 2nd quarter
financial results, which is 0.3 points worse than three months ago. In
addition, the growth rate forecast for the current term is + 7.9%, which is 1.10
points worse than three months ago.
③ Long-term interest rates in the United
States rose and the interest rate differential between Japan and the US
expanded from 2.31 to 2.35%, and the exchange rate moved from the 113 yen level
to 114 yen level, a move toward weaker yen. This week is estimated to be the 112
yen level to the 114 yen level.
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.
⑤ 3rd week of October is a over buying. there
is a high possibility that the 4th week of October is a over buying, and this
week we are forecasting to over buying.
①, ③,⑤ was a bullish factor. It seems that ①,②,③,⑤ will be affected this week.
[Technical viewpoint]
From the technical point of view of the
Japanese market, the 200-day divergence rate difference with NASDAQ is 0.9
points in mid- to long-term (about 190 yen when it is calculated by Nikkei
average), which is expensive. It became more expensive than last week.
The Nikkei average in the cloud of the
ichimoku table. The total divergence rate was +25.6%, and which expanded positive
range. The 200 day moving average line deviation rate was +11.7%, and which expanded
positive range. Since 3 elements are positive, the "green light" is
on for the medium term trend. The Nikkei average is on the 25 day and the 9 day
moving average line, "green light "
is on for short-term trends.
In the US market NY Dow is on the 200 day
line and the 25 day line , 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, the 9
day average line. It is on the cloud of the ichimoku table. In the short term
"green 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, uncertainty of US politics, Situation of North Korea, 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 purchase facility has
been gradually reduced from 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 upward trend in the short term.
The Japanese market is upward trend in the medium-term, and in the short term.
Analyzing the exchange market last week,
although long-term interest rates in the US rose, the long-term interest rate
gap between the US and Japan expanded, and the exchange rate was a move toward
a weaker yen 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 in
the expected range. The upper price exceeded the assumed line by about 50 yen,
and the lower price exceeded the assumed line by about 770 yen. This week's
Nikkei average is expected to move between the upper price on Bollinger band +2σ
(currently around 22080 yen) and the lower price on the 25 day average line +
200yen (currently around 21180 yen ).
