2023-11-17 23:00:00
Stock commentator Yasuo Ueki
“What is the biggest concern of the Tokyo market?”
●Is it really bottoming out? Or a bear market rally?
The Nikkei Stock Average has rebounded sharply since the beginning of November, and the atmosphere in the Tokyo market has recently changed. In terms of factors, it was the rise in US stocks and the depreciation of the yen, but in terms of the chart, the lows on October 4th and 30th formed a double bottom, and the price exceeded the neckline of the October 13th high of 32,533 yen. That’s a big deal. Of course, there was some profit-taking selling while waiting for a return, and there were times when it was a regular occurrence, but once the return selling was completed, the price rose even further, and is now approaching the post-bubble burst high of 33,772 yen set on June 19th. It’s momentum.
The unexpected rise in U.S. stocks is a positive sign for Japanese stocks, as if the sun is shining through a cloud. The background to this is a decline in US long-term interest rates. Many of the US economic indicators released here hint at changes in the economy. Rising unemployment, shrinking consumer credit lines, declining retail sales, and slowing growth in the U.S. consumer price index (CPI) make it inevitable that interest rates will fall sharply. Markets believe that inflation is nearing its end. This trend is encouraging overseas investors to repurchase Japanese stocks.
Then, a big issue arises here. Does this mean that the market has truly bottomed out? In other words, will we enter the financial market after going through an adverse earnings market? Or is it a bear market rally, a self-sustaining rebound within a mass bear market?
●Is the first target for the Nikkei average stock price around 37,000 yen?
If it’s the former, it’s normal to buy and buy. However, if it is the latter, it will begin to decline again without exceeding the second ceiling. This means that the bottoming out is yet to come. This can be said to be the issue of greatest interest in the market right now.
However, if the Nikkei Stock Average breaks above its high after the bursting of the bubble in June, it promises further rise.
The author believes that the country is currently in a state of confusion. U.S. interest rates, the U.S. economy, the dollar-yen, and U.S. stock prices hang in perfect balance in both hands. If even one thing changes dramatically, things will fall apart. It appears that US interest rates are the key factor this time, but it is essential to carefully monitor each of these factors.
Now, if the current market is entering a full-scale upward phase, how far should we expect it to rise? The author estimates that the first target for the Nikkei Stock Average is around 37,000 yen. If this is your first goal, achieving it won’t be too far off.
By the way, what are your future plans? If Japanese stocks are to enter the performance market, lagging behind the US, it is likely that stocks that are expected to achieve record profits will be targeted first, regardless of whether they are growth or value stocks. Stocks with low PER and PBR are good, but you also need to pay close attention to why these values are low. There may be some hidden reason. Now that almost the entire market is rising, perhaps we can hold out hope for stocks that are rising at an even faster pace.
This time, we will focus on the orthodox Mitsubishi Heavy Industries <7011> [東証Ｐ],Japan Airlines <9201> [東証Ｐ]Kubota <6326> [東証Ｐ]Japan Post <6178> [東証Ｐ]We would like to focus on stocks that are well known nationwide and are expected to improve their performance.
Diary of November 17, 2023
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