[Present state recognition of fundamental]
In the US market last week, buying
dominated, as the speculation of accelerating interest rate hikes dropped. 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 3.25 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 17.1 and the
Nikkei average adopted stock price PER 13.6 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 3.3% 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 24.2 (the results for the current term will be revised downwards or the
Nikkei average will be around 40140 yen) . Because it is so, the Japanese
market is cheap about 17690 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 positive.
The daily bar is above the 200 day line, and it is above the cloud of the ichimoku
table. Nasdaq weekly foot was positive. NASDAQ bar is above the 200-day line and
above 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 May, Employment
Statistics in May. we would like to pay attention to whether NYDow keep above
the cloud of the ichimoku table.
② The expected profit increase for the
Nikkei 225 hires will be +9.1% with the announcement of the 1st quarter
financial results. It has deteriorated by 0.3 points compared with 3 months ago.
In addition, the growth rate forecast for this term is -6.0%. It has
deteriorated by 27.1 points compared with 3 months ago
③ Long-term interest rates in the US rose,
the difference in interest rates between Japan and the US has expanded from 3.06
to 2.93%, and the exchange was a move from 111 yen range to 108 yen range. This
week is estimated to be the 110 yen level to the 107 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 3rd week of May is a over selling. there
is a high possibility that the 4th week of May is a over selling, and this week
we are forecasting to over selling.
last week ③ 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 discrepancy rate with Nasdaq is 3.7 points in the
medium to long term (about 830 yen when calculated by the Nikkei average),
which is less expensive. The difference has shrunk compared to last
week.
The Nikkei average above the cloud of the
ichimoku table. The total divergence rate was +5.4%, and which has shrunk positive
range. The 200 day moving average line deviation rate was +3.3%, and which has shrunk
positive range. Since 3 elements are positive, the "green 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 and the 25 day line but under the 9 day line. It is in the cloud of
ichimoku table. NASDAQ above the 200 day average line and the 25 day average
line and the 9 day average line. It is above 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, financial
market turmoil due to UK's withdrawal from the EU, global long-term interest
rate trends declined, Situation of North Korea, falling high-yield bond market,
etc. Concern is diminished. However, there are fears concerning the global
economic slowdown due to the US interest rate hikes, 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 upward trend in the medium-term, and no trend in the short term. The
Japanese market is upward trend in the medium-term, but downward trend in the
short term.
When analyzing the exchange market last
week, the long-term interest rate in the US declined, the long-term interest
rate gap between the US and Japan has shurunk, the exchange rate was stronger
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 fell below the
expected range. The upper price was lower than the assumed line by about 80
yen, and the lower price was about 210 yen lower than the assumed line. This
week's Nikkei average is expected to move between the upper price near the Bollinger
band +1σ (currently around 22800 yen) and the lower price near the Bollinger band -1σ (currently around 22260 yen ).
