Outlook for the Nikkei average this week [03-Jan-2017]

[Present state recognition of fundamental]

In the US market last week, There were few participants at the end of the year, and the selling was dominant. 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 Japanese markets is 1.13 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 16.2,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 19.8 (the results for the current term will be revised downwards or the Nikkei average will be around 23390 yen) By the way, the Japanese market is cheap about 4280 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 + 0.83%) 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 bar on the 200-day line and is on the cloud of the ichimoku table. This week we will be paying attention to ISM Manufacturing Industry Situation Index in December, ISM Non Manufacturing Industry Situation Index in December, Employment Statistics in December, Trump regime system and policies. I would like to pay attention to whether NYDow falls below the 25-day moving average line.

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%, and there is no change compared to three months ago.

③ Long-term interest rates in the US declined and the interest rate differential between Japan and the US narrowed from 2.49 to 2.40%, and the exchange rate was a move toward a strong yen at 116 yen level from the 117 yen level. This week is estimated to be 118 yen range from 116 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 In December 3rd, it is the dominance of selling power, the possibility that it was dominant in the selling power in December 4th is high, and the dominance of selling power is expected this week.

Of 5 points ① ③ ⑤ was the cause of bearish. 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 7.3points in the mid to long term (about 1400 yen when calculating the Nikkei average) and it is expensive. The ratio exceeds the previous week's shrinkage by 0.3 points.

In the US market NY Dow is on the 200 day line and 25 day line, but it is under the 9 day line. It is on the cloud of the itimoku table. Nasdaq is on the 200 day line, but it is under the 25 day line, 9 day line. It is on the cloud of the itimoku table. In the short term "yellow signal", in the medium term "green light" is lit.

[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 60 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 a medium-term upward trend, and in the short term it is no trend. The Japanese market is a medium-term rise trend, and it is no trend in the short term.

Analyzing the situation in the immediate Japanese market, Long-term interest rates in the US declined, the long-term interest rate gap between the US and Japan declined, and 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 trends.

Last week's Nikkei average went down within the expected range. The upper price was lower than the assumed line by about 350 yen, and the lower price was 410 yen lower than the supposed line.

This week's Nikkei average is expected to move between the Bollinger band + 1σ (the current price is around 19410 yen) whose rise is rising and the lower price is between Bollinger band - 1σ (around 18490 yen now).