[Present state recognition of fundamental]
In the US market last week, as earnings
announcement became full-fledged, buying continued favorable improvement of
corporate performance, 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 2.47 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 18.7 and the
Nikkei average adopted stock price PER 15.6 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 2.5% 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 25.3 (the results for the current term will be revised downwards or the
Nikkei average will be around 38370 yen) By the way, the Japanese market is
cheap about 14740 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 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 and on the
cloud of the ichimoku table. This week we will be paying attention to Housing
related indicators, Quarterly financial results announcement , ISM
Manufacturing Industry Situation Index in January, Employment Statistics in
January. I would like to pay attention to whether NYDow is able to maintain
above the 25 day moving average line.
② The expected profit increase for the
Nikkei 225 hires will be +8.8% with the announcement of the 2nd quarter
financial results, which is 0.1 points better than three months ago. In
addition, the growth rate forecast for this term is + 11.8%, 4.4 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 expanded from 2.56%
to 2.59%, but the exchange rate changed from 111 yen to 108 yen, which was a stronger
yen movement. This week is estimated to be the 109 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 January is a over selling. there
is a high possibility that the 4th week of January is a over selling, and this
week we are forecasting to over selling.
① was a bullish factor but 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 1.2
points in mid- to long-term (about 320 yen when it is calculated by Nikkei
average), which is cheap. The price range has changed cheap compared to last
week.
The Nikkei average in the cloud of the
ichimoku table. The total divergence rate was +19.0%, and which shrunk positive
range. The 200 day moving average line deviation rate was +13.6%, and which shrunk
positive range. Since 3 elements are positive, the "green light" is
on for the medium term trend. The Nikkei average is above the 25 day moving
average line but under the 9 day moving average line, "yellow light " is on for
short-term trends.
In the US market NY Dow exceeds the 200 day
line and the 25 day line and the 9 day line. It is above cloud of the ichimoku
table. NASDAQ exceeds 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 "green 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.
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 in the short term. The Japanese
market is upward trend in the medium-term, but no trend the short term.
Analyzing the exchange market last week, the
long-term interest rate in the US rose and the long-term interest rate gap
between the US and Japan expanded, but 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 was almost
within the expected range. The upper price under the assumed line by about 190
yen, and the lower price exceeded the assumed line by about 140 yen. This
week's Nikkei average is expected to move between the upper price on Bollinger
band +1σ (currently around 23910 yen) and the lower price on Bollinger band -1σ(currently
around 23000 yen ).
