During the first week of May during Golden Week, stocks are traded only for two days, the 2nd (Monday) and the 6th (Friday). This week’s outlook and the week starting May 9th (Monday) next week will be reviewed as a preparation.
This week: FOMC is sure to raise rates by 0.5%.Worried about the blockade of Beijing, China
Last week, the Nikkei Stock Average before the holidays fell to the low 26,000 yen level and fluctuated.
The rapid rate hike in the United States made money circulation worse, and fears that the economy would decline led to a sharp drop in stock prices.
The spread of the new coronavirus in China, which has a zero-corona policy, has raised concerns that the city will be blocked in Beijing, the capital city, following Shanghai.
The US Nasdaq Composite Stock Price Index, which is a collection of high-tech stocks with high stock prices, hit a new low in 2022, and the rate of decline from the beginning of the year was 20%.
China’s Shanghai Composite Index has also hit a low for the first time in a year and 10 months, and stock prices in the US and China have fallen more than Japanese stocks, which are benefiting from the weak yen.
However, it was announced last weekMicrosoft (MSFT)orMeta Platforms (formerly Facebook: FB)The good financial results of the giant IT companies contributed to the end of the decline in the overall market price.
The biggest event of the week when the Japanese market is on holiday is the FOMC (Federal Open Market Committee) on Wednesday, May 4, which decides US monetary policy.
A “0.5% rate hike”, which is double the usual 0.25%, is expected, and a QT (quantitative monetary tightening) to reduce the total assets of the US Central Bank FRB (Federal Reserve Board) is expected to start.
The CPI (Consumer Price Index) has risen by more than 8% year-on-year, and the price increase for the first time in 40 years in the United States is unlikely to subside for the time being due to the rise in resources and grains due to the Ukraine crisis.
There is growing fear in the market that the FOMC held in June and July could have a 0.5% rate hike in a row, perhaps a 0.75% rate hike.
A rapid rate hike that seems to slow the booming US economy could reduce the Fed’s authority and lead to a long-term downturn in US stocks.
However, after the last March FOMC passage, both US and Japanese stocks have turned upside down due to the fact that “bad material has run out.”
It is also expected that Japanese stocks will start to rise sharply on the 6th (Friday), reflecting the trend of US stocks during the three consecutive holidays.
This week, the ISM (Institute for Supply Management) April Manufacturing Index, which shows the business sentiment of the US manufacturing industry on the night of the 2nd (Monday), and the US employment statistics will be released on the 6th (Friday).
The Fed is pushing for a tough continuous rate hike because the domestic employment situation is strong, with the unemployment rate dropping to near the pre-Korona level in the previous employment statistics.
The number of new non-farm payrolls is expected to increase by 400,000 in April, but lower than expected could lead to a sharp drop in stock prices.
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