Outlook for the Nikkei average this week [2-Dec-2016]

[Present state recognition of fundamental]

OPEC agreed to cut production, but NYDow kept buying dominance, but Nasdaq became dominated by selling due to the concern that the economy policy of the next trump regime was headwind. Meanwhile, 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 Japan markets after taking into account the real GDP growth rate in 2018 is 1.11 points lower in the Japanese market, taking into account the 2018 OECD's real GDP estimate. The reason for the bargain is due to the difference between S&P500 's PER of 18.4 and the Nikkei average adopted stock price PER 15.8,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 1.1% more than the OECD forecast (Japan is downgraded downwards or the US is upwardly modified) 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 19.1 (the results for the current term will be revised downwards or the Nikkei average will be around 22330 yen) By the way, the Japanese market is cheap about 3900 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 2017 GDP estimate (now + 0.4%) by OECD

⑤ Foreign investors over-buying

Looking at recent movements

① Last week's NYDow weekly foot was positive, but Nasdaq became a hidden line. The daily bar is on the 200 day line, and it is on the cloud of the ichimoku table. Nasdaq bar on the 200-day line and is in the cloud of the ichimoku table. This week, the ISM Non Manufacturing Industry Situation Index in November, the Manufacturing Industry Order in October, the ECB Regular Board of Governors, the structure and policies of the new administration are likely to pay attention. I would like to pay attention to whether Nasdaq's daily legs can return to the top of the cloud of the equilibrium table.

② The expected profit increase for the Nikkei225 hires will be 8.2% with the announcement of the financial results for July-September, and there is no change compared to three months ago. In addition, the growth rate forecast for the current term is + 4.9%, an improvement of 0.1 points compared with three months ago.

③ Long-term interest rates in the US rose, the difference in interest rates between Japan and the US expanded from 2.33 to 2.36%, and the exchange rate moved from the 111 yen range to the 114 yen level. This week is estimated to be 115 yen from the 112 yen range.

④ The OECD's real GDP growth rate in 2018 in Japan and the US is expected to be + 0.8% in Japan and + 3.0% in the US, so the Japanese market is worse by 2.2 points on this aspect.

⑤ There is a high possibility that it was a over-buying the November 4th weeks and a November 5th week, so it is expected that a over-buying is expected this week.

Out of the five points ③ ⑤ was a bullish material ① was a somewhat weak material. 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 6.1 points in the mid to long term (about 1120 yen when calculating the Nikkei average) and it is expensive. The ratio of the previous week's ratio increased 3.0 points.

In the US market NY Dow is on the 200 day, 25 day line, 9 day line. It is on the cloud of the ichimoku table. Nasdaq is on the 200 day line, but it is under the 25 day line, 9 day line. It is in the clouds of the itimoku table. In the short term "yellow signal", in the medium term also "yellow signal" 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. 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 rising 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, maintenance of different dimensions of monetary easing measures such as negative interest rates on policy interest rates by the ECB and purchase of government bonds of EUR 80 billion each month, interest rate reductions in emerging countries such as China There is a trend.

Looking at the technical aspect, the US market is no trend in the medium term, also in short term.　The Japanese market is a medium-term upward trend, and it is upward  trend in the short term.

Analyzing the situation in the immediate Japanese market, Long-term interest rates in the US rose, the long-term interest rate gap between the US and Japan expanded, and the exchange rate became a move toward a depreciation of the yen in the week. From now on, we need to pay attention to technical indicators, US market trends, foreign exchange movements and foreign investor trends.

Last week's Nikkei average was within the expected range. The upper price almost matched the assumed line, but the lower price exceeded the assumed line by about 600 yen.

This week's Nikkei average is expected to move between the Bollinger band + 2σ (the current price is around 18840 yen) whose rise is rising and the lower price is between the 25 day line (around 17720 yen now).