Stock commentator Yasuo Ueki
“Tech stocks will continue to be led by US interest rates until US interest rates cut”
● Will the 4th week of January be the critical moment?
After the Nikkei stock average hit as low as 32,600 yen in a major stock market, it soared day after day, as if to vent that discontent. The price rose 3,500 yen to the 36,200 yen level, and the word “transformation” might be suitable.
The background to this is the rise in long-term US interest rates and the subsequent return to a weaker yen trend. In fact, the dollar-yen exchange rate has reversed significantly from the 140 yen level to the dollar, and is currently at the 148 yen level. In addition, the price increase led by stock index futures can be seen as short-term buying by foreign investors. Furthermore, it has been noted that there will be an influx of new money due to the introduction of the new NISA (Small Investment Tax Exemption System).
However, given the momentum with which the price has rebounded above 36,000 yen for six consecutive days, there is a sense of overheating. Naturally, sellers who take profits from abroad will come in.
On January 16th, the price continued to fall by 282 yen compared to the previous day, and on the 17th it fell by 141 yen. If it had fallen significantly on the 18th, there could have been a correction, but the price remained only slightly lower In addition, Nikkei 225 futures on the 18th were firm and became a positive line.
As a general rule, it’s not easy to make adjustments because you’re climbing with the windows open. This may be the same pattern as the one that started on November 7 last year and started to rise after several days of fighting. At the weekend, the price rose 497 yen on the 19th, returning to just below 36,000 yen.
Based on the developments so far, it seems that the key will be the departure of the candidates in the fourth week of January, which starts on the 22nd.
By the way, the biggest concern for the market right now is, of course, the timing of the start of the interest rate cuts in the United States. Although the market expects an early interest rate cut, the US Federal Reserve remains cautious. The fact that US stocks are doing so well is proof that there is plenty of capital in the US. If interest rates were cut at this point, there would be a risk of a resurgence of inflation.
The best case scenario for the US right now is for inflation to subside further, the economy to reach a soft landing, and the stock market to stay high without crashing. Is there an answer? Let’s see what the Fed does.
In any case, expectations are high that investment funds from all over the world will gradually flock to Japan, and it seems likely that the outlook will remain bullish over the medium to long term. However, in the near term, the outlook for stock prices is very uncertain. It seems that the situation will continue to be groped.
● Add indexed ETFs to your portfolio
How should I choose my immediate target? In the US market, which serves as a reference, technology stocks such as semiconductors hold the leadership position, as they are expected to bottom out quickly. Therefore, the focus is likely to be on high-tech stocks. However, big stocks don’t always move. The main stocks are the stars, so they appear on the stage many times, but the focus will also be on small and medium stocks, and supporting players will also appear on the stage, asking, “Is this also higher -technology?”
Renesas Electronics is one of the stocks I’m interested in, not just high tech. <6723> [東証Ｐ]Nippon Pillar Industries <6490> [東証Ｐ]Noritsu Koki <7744> [東証Ｐ]YAC holdings <6298> [東証Ｐ]Riken Keiki <7734> [東証Ｐ]asics <7936> [東証Ｐ]Mandarake <2652> [東証Ｓ]I would like to pay attention to such things.
The developments so far highlight the efficiency of exchange traded funds (ETFs). You should definitely include ETFs that track stock indexes such as the TOPIX and Nikkei Average in your portfolio. It is a reliable “sidekick” that can sometimes act as a hedge. There are many investors who have been able to save themselves trouble by including ETFs in their portfolios.
Diary January 19, 2024
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