[Present state recognition of fundamental]
In the US market last week, the expectation
for tax reform re-emerged, so 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 2.71 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 18.7 and the
Nikkei average adopted stock price PER 13.7,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 2.7% 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 21.9(the results for the current term will be revised downwards or the
Nikkei average will be around 30990 yen) By the way, the Japanese market is
cheap about 11540 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 but in 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 August, employment
statistics in August. I would like to pay attention to whether NYDow is able to
maintain the clouds above the ichimoku table.
② The expected profit increase for the
Nikkei 225 hires will be 9.0% with the announcement of the first quarter
financial results, which is the same level as the three months ago. In
addition, the growth rate forecast for the current term is + 5.8%, which is 2.3points
worse than three months ago.
③ Long-term interest rates in the United
States declined, but the interest rate differential between Japan and the US
remained unchanged from 2.17 to 2.17%, and the exchange rate was small move
from 109 yen to 108 yen level. This week is estimated to be 110 yen range from
the 108 yen range.
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 July is a over selling. there
is a high possibility that the 4th week of August is a over selling, and this
week we are forecasting to over selling.
①was a bullish factor and ③,⑤ was a bearish factor. 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 5.2 points
less expensive in the mid to long term (about 1010 yen when calculating the
Nikkei average) and it is cheap. The ratio was expanded 0.8 points last week.
The Nikkei average on the cloud of the
ichimoku table. The total divergence rate was -3.2, and the negative range shrunk
compared to last week. The 200 day moving average line deviation rate was + 0.8%,
and the positive range shrunk compared to last week. Since the one elements are
positive, the "yellow light" is on for the medium term trend. The
Nikkei average is under the 25 day and the 9 day moving average line, "red light " is on for short-term
trends.
In the US market NY Dow is on the 200 day
line but under the 9 day line and the 25 day. It is on the cloud of the
ichimoku table. NASDAQ is on the 200 day average line but under the 25 day
average line and the 9 day average line. It is on the cloud of the ichimoku
table. In the short term " red 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 buy-out frame has been
reduced from EUR 80 billion to EUR 60 billion in 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 downward trend in the short
term. The Japanese market is no trend in the medium-term, and downward trend in
the short term.
Analyzing the exchange market last week,
although long-term interest rates in the United States declined, the long-term
interest rate gap between the US and Japan remained unchanged, and the exchange
rate was small 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 within the
assumed range. The upper price is around the assumed line, about 50 yen below
the assumed line, the lower price is around the assumed line, about 80 yen higher.
This week's Nikkei average is expected to move between the upper price on the
25th line (currently around 19790 yen) and the lower price between Bollinger
band -2σ (around 19290 yen now).
