Good morning. Here is this morning’s stock market brief.
In the free section, we provide a 30-second summary, and in the continuation (full version), we deliver an in-depth look at important global and Japanese news along with a breakdown of stocks to watch.
⏱ 30-Second Summary
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US stocks rebounded overnight, supported by the view that the previous day’s decline was excessive, as well as falling interest rates and lower oil prices. High-tech stocks led the way.
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Japanese stocks are supported by the US rebound following a slight consecutive gain the previous day. However, changes in long-term interest rates and exchange rates following US monetary policy may cap the upside.
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The order of things to watch today is: 1) US long-term interest rates and the dollar-yen, 2) price movements of semiconductor stocks after the opening, and 3) the divergence in impact of lower oil prices on resources, airlines, and domestic demand.
From here on, we provide in-depth analysis of global and Japanese conditions (viewing each topic from three perspectives: investor, analyst, and contrarian) and a breakdown of stocks to watch.
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🌍 Global Conditions
US Stocks: Confirming the Sustainability of the Rebound
US stocks rebounded on the view that the previous day’s reaction was excessive. While lower interest rates and lower oil prices supported stocks, concerns about rate hikes regarding monetary policy remain. Do not be complacent with just the opening rebound; we want to confirm that long-term interest rates do not rise again.
Interest Rates/Exchange Rates: Indicators That Move Before Stock Prices
If interest rate hikes stop and the dollar-yen does not change drastically, it is likely to be a tailwind for growth stocks. Conversely, if interest rates head upward again, the overnight high-tech-led rebound could be short-lived.
🇯🇵 Japanese Market
Nikkei Average: Assessing Pullbacks in High-Price Ranges
The Nikkei Average saw a slight consecutive gain on the 17th, and the narrowing of gains in the morning session showed some heaviness in the upside. While the opening is likely to be supported by the US stock rebound, the turning point will be whether semiconductor stocks alone can push up the index or if buying will spread to value and domestic demand stocks.
🔍 Stocks and Themes to Watch
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Semiconductors: Confirm the ripple effect of the US high-tech rebound. However, be careful of a ‘yori-ten’ (opening high, closing low) scenario.
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Lower Oil Price Beneficiaries: A tailwind for airlines, logistics, and some domestic demand sectors. Confirm the contrast with resource stocks.
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Interest-Rate Sensitive Stocks: Until the direction of long-term interest rates changes, keep positions in stocks with large price ranges suppressed.
Disclaimer
This magazine is intended for the purpose of organizing and explaining information regarding the stock market and does not recommend the buying or selling of any specific stocks. Figures and materials are current as of the time of distribution (* indicates unconfirmed information). While we strive for the accuracy of the information posted, we do not guarantee its completeness. Please make final investment decisions based on your own judgment and responsibility.
Thank you for reading this far. Let’s meet here again tomorrow morning.