[Present state recognition of fundamental]
In the US market last week, concern over
the trade war between the United States and China was strong, and selling 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 concern over the
global economic slowdown due to trade war. We need continued attention to the
geopolitical risk of the Middle East , Korean Peninsula and Ukraine.
The difference in the yield spread between
the US and Japanese markets is 3.88 points less than in the Japanese market,
taking into account the 2019 OECD's real GDP forecast announced. The reason for
the bargain is due to the difference between S&P500 's PER of 16.9 and the
Nikkei average adopted stock price PER 12.2 and Japan-US interest rate
difference, GDP growth difference. This is because the difference in GDP growth
between Japan and the US in 2019 is 3.9% 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 23.3 (the results for the current term will be revised downwards or the
Nikkei average will be around 39200 yen) . Because it is so, the Japanese
market is cheap about 18590 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 2019 GDP
estimate (now + 0.96%) by OECD
⑤ Foreign investors over-buying
Looking at recent movements
① Last week's NYDow weekly foot was negative.
The daily bar is above the 200 day line, but it is under the cloud of the ichimoku
table. Nasdaq weekly foot was negative. NASDAQ bar is above the 200-day line but
under the cloud of the ichimoku table. This week we will be paying attention to
Housing related indicators, Quarterly financial results announcement , GDP
figures for the October-December period, Chicago Purchasing Department
Association economic index in March. we would like to pay attention to whether
NYDow can keep above the 200 day average line
② The expected profit increase for the
Nikkei 225 hires will be +9.4% with the announcement of the 4th quarter
financial results, which is 0.7points better than three months ago. In
addition, the growth rate forecast for this term is + 21.1%, 9.3 points better
than 3 months ago.
③ Long-term interest rates in the country rose
and the interest rate differential between Japan and the US shrunk from 2.81%
to 2.80%, and the exchange rate changed from 106 yen to 104 yen, which was a stronger
yen movement. This week is estimated to be the 105 yen level to the 103 yen level.
④ The OECD's real GDP growth rate in 2019
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 1.1 points on this aspect.
⑤ 2nd week of March is a over selling. there
is a high possibility that the 3rd week of March is a over selling, and this
week we are forecasting to over selling.
last week ①,③,⑤ was a bearish
factor. It seems that ①,③,⑤ 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 6.9
points in mid- to long-term (about 1420 yen when it is calculated by Nikkei
average), which is cheap. The price range has expanded compared to last week.
The Nikkei average under the cloud of the
ichimoku table. The total divergence rate was -16.5%, and which has shrunk negative
range. The 200 day moving average line deviation rate was -3.2%, and which has switched
to minus. Since 3 elements are negative, the "red light" is on for
the medium term trend. The Nikkei average is under the 25 day moving average line
and the 9 day moving average line,
"red light " is on for short-term trends.
In the US market NY Dow above the 200 day
line but under the 9 day line and the 25 day line. It is under the cloud of
ichimoku table. NASDAQ above the 200 day average line but under the 25 day
average line, and the 9 day average line. It is under the cloud of the ichimoku
table. In the short term "red light" is on and in the medium term
"yellow light" is on.
[Outlook for this week]
Looking at the US market fundamentally,
concerns such as the US economic slowdown, sluggish crude oil prices, financial
market turmoil due to UK's withdrawal from the EU, global long-term interest
rate trends declined, Situation of North Korea, etc. Concern is diminished.
However, there are fears concerning the global economic slowdown due to the US
interest rate hikes, falling high-yield bond market, uncertainty of US politics,
the creditworthiness of the EU regional banks, Concerns over the economic
slowdown of emerging economies such as China and the global economic slowdown
due to trade war, geopolitical risks of the Middle East and Ukraine as risk
factors It exists.
Real estate prices in China are flat in
large cities, but the problems of nonperforming loans in China as a whole such
as excessive facilities have not been resolved. If you hurry up the process, it
will lead to a short-term market drop, and if you delay proceeding, there is
concern that the economic recession will be prolonged.
It also implies that the latest LIBOR
interest rate has continued to update the highs for the past five years, and
that the global nonperforming debt continues to increase, and the possibility
of financial unrest is revealed.
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 no trend in the medium-term, and downward trend in the short term.
The Japanese market is downward trend in the medium-term, and downward trend the
short term.
Analyzing the exchange market last week, the
long-term interest rate in the US declined and the long-term interest rate gap
between the US and Japan has shrunk, so the exchange rate was a move toward a stronger 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 fell short of
the expected range. The upper price was lower than the assumed line by about
360 yen, and the lower price was lower than the assumed line by about 720 yen. This
week's Nikkei average is expected to move between the upper price near the Bollinger
band -1σ (currently around 21280 yen) and the lower price near the Bollinger
band -3σ (currently around 20510 yen ).
