[Present state recognition of fundamental]
In the US market last week, concerned about
the intensification of trade friction between the United States and China, the
related stock became the dominant selling. 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 3.05 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 17.4 and the
Nikkei average adopted stock price PER 13.3 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 3.0% 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 22.4 (the results for the current term will be revised downwards or the
Nikkei average will be around 37910 yen) . Because it is so, the Japanese
market is cheap about 15400 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 negative.
The daily bar is above the 200 day line, and it is above the cloud of the ichimoku
table. Nasdaq weekly foot was crosshair. 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 , Durable
goods orders received in May, Chicago Purchasing Department Association
Business Economic Index in June. 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 +9.0% with the announcement of the 1st quarter
financial results. It has deteriorated by 0.2 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 2.90
to 2.87%, but the exchange was a move from 110 yen range to 109 yen range. This
week is estimated to be the 109 yen level to the 111 yen level.
④ The OECD's real GDP growth rate in 2019
in Japan and the US is expected to be + 1.2% in Japan and + 2.8% in the US, so
the Japanese market is worse by 1.6 points on this aspect.
⑤ the 2nd week of June is a over buying. there
is a high possibility that the 3rd week of June is a over selling, and this
week we are forecasting to over selling.
last week ①③ was a bearish factor. It seems that ①③,⑤ 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 6.6 points in the
medium to long term (about 1490 yen when calculated by the Nikkei average),
which is less expensive. The difference has expanded compared to last
week.
The Nikkei average above the cloud of the
ichimoku table. The total divergence rate was +3.7%, and which has expanded positive
range. The 200 day moving average line deviation rate was +2.2%, and which has expanded
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 but under the 25 day line and the 9 day line. It is above the cloud of
ichimoku table. NASDAQ above the 200 day average line and the 25 day average
line but under 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 frame is
gradually reduced from April 2017 and is planned to end at the end of the year.
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, and downward trend in the
short term.
When analyzing the exchange market last
week, the long-term interest rate in the US declined and the long-term interest
rate gap between the US and Japan has shrunk, and the exchange rate was 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 in the expected
range. The upper price under the expected line by about 120 yen, the lower
price exceeded the assumed line by about 60 yen. This week's Nikkei average is
expected to move between the upper price near the Bollinger band +1σ (currently
around 22850 yen) and the lower price near the Bollinger band -1σ(currently
around 22340 yen ).
