In Monex Group’s 14th quarterly “Monex Global Retail Survey” the survey shows that in all regions—Japan, the U.S., and China—retail investors expect that stock markets will be bullish (the number of investors that answered “World stock market prices will increase” exceeded that of investors that answered “World stock market will decrease”). We assume that investor sentiment has improved due to generally strong stock markets worldwide immediately before the survey and during the survey period. (Would you take this as a contrarian indicator, or something not relevant? This would also mean that the dollar is likely to strengthen and the yen continue to slowly depreciate, unless the relationship between the currency and the equity markets decouple into some other correlations like actual economic fundamentals).
Japanese and U.S. investors have the highest expectations of stock prices in the United States. In the United States, the economy’s fundamentals are very strong. Important economic indicators, including personal spending, companies’ business confidence, and labor market data, have reached their highest levels for the past few years. We can say that the strong U.S. economy has boosted investors’ expectations of U.S. stocks. The hottest topic in markets worldwide is U.S. monetary policy. Since the financial crisis, the U.S. has implemented unconventional monetary easing policies. However, as noted, the economy is recovering strongly, and the monetary authorities will likely raise interest rates and tighten monetary policy.
On its monetary policy, the FOMC (Federal Open Market Committee) has consistently said that there is no fixed schedule and the committee will make decisions based on economic conditions. However, given the remarks of senior officials of the FRB (Federal Reserve Board) and the current economic situation, we can say that the FRB will raise interest rates in 2015. In this survey, we asked retail investors in each region about their views on the timing of a rate hike in the U.S.
It is very interesting that the largest percentage of Japanese investors expect that interest rates will be raised in the first half of 2015, while in the U.S. and Hong Kong, the largest percentage of investors expect that there will be a rate hike in the second half of 2015. Compared with our survey in June, in all regions, a larger percentage of investors expect a rate hike in 2015, but investors’ expectations appear to differ depending on the region. Either way, the timing of a rate hike will remain the focus of attention in markets in the autumn and beyond. U.S. monetary policy will have a very great impact not only on the U.S. economy but also on the Japanese economy, exchange rates, and the Japanese stock market, and we would like Japanese investors to pay close attention to it.
To check out the complete survey with all detailed data, click here.