The Tokyo Stock Market on Monday the 11th saw the Nikkei Stock Average fall 295 yen from the previous trading day to 62,417 yen, continuing its decline. On the previous Friday (the 8th), Asian stock markets including Japan generally showed a correction trend, and this flow continued into European trading hours, with major indices including Germany's DAX and France's CAC 40 falling almost across the board. Under such circumstances, the focus turned to the U.S. stock market, but the April U.S. employment statistics released before the start of morning trading local time showed non-farm payroll employment increased by 115,000 from the previous month, exceeding the pre-consensus of 55,000 by 60,000. While this may not be called divine wind, it certainly provided a strong tailwind for the U.S. stock market just before the start.

However, the University of Michigan's U.S. consumer sentiment index for May, released an hour and a half after the employment statistics, hit its lowest level since the survey began in 1952. The puzzling situation emerged where employment is in excellent condition but consumer sentiment is at "the highest level of poor performance in history." This reflects very strong dissatisfaction with cost-push inflation that is not linked to demand. From the public's perspective, this is tantamount to Trump's tariffs already being branded a policy failure. Nevertheless, high-tech sector stocks such as semiconductors seemed to feel no pain from the cooling of consumer sentiment, and continued to soar as if enjoying their heyday.

The main player in today's Tokyo market was Kioxia Holdings <285A>, which hit an all-time high during intraday trading and processed a record trading value of 1.84 trillion yen, although it closed with a negative candlestick. This was largely influenced by SanDisk soaring 16.6% in the U.S. stock market on the previous Friday, renewing its all-time high. The popularity of AI and semiconductor stocks in the U.S. and Tokyo markets has become like a mirror, for better or worse.

Meanwhile, regardless of how the Iranian situation will eventually be resolved, the surge in crude oil prices due to the blockade of the Strait of Hormuz was an inflation factor with low probability of occurrence, and has made a Republican rout in the November midterm elections a foregone conclusion. However, the difficulty is that even if politics follows a path of turmoil, stock prices do not necessarily fall. The price increase mode reminiscent of the eve of war has been brought about not only by the negative bias of Trump's tariffs but also, needless to say, by the Middle East crisis. However, unless one holds stocks, one will face the fear of being exposed to "the war fire of inflation" while defenseless. Ultimately, the notion that cash is too weak arrives at the answer of "the risk of not holding (stocks)." What further fuels this is the AI and semiconductor revolution, which is undoubtedly not a paper tiger. While it differs from the IT bubble of 2000, it is probably driven by competitive consciousness and involves excessive investment, and there will come a time when the bubble created by speculative demand will burst. However, that time is not now. This is the rough progress of the Trump theater that can be said in the current time frame.

On the previous Friday, the Nasdaq Composite Index rose over 440 points to renew its all-time high. The rate of increase was 1.70%, a large gap compared to the Dow Jones Industrial Average's 0.02% gain. However, the Philadelphia Semiconductor Index (SOX Index), composed of semiconductor stocks, is incomparable to the Nasdaq Index. It is running in record high territory with a 5.5% gain. The SOX Index recorded a stunning 18 consecutive gains from late March to late April, but after a pause in the rise, it began rotating forward at high speed again as if mocking short sellers who expected a reversal of the excessive gears. In the semiconductor sector, Intel , which seemed about to be labeled a declining company in contrast to the rising Nvidia , is climbing to record high territory with a chart that can only be described as a pillar of fire. There is no longer a contrast between winners and losers. The explosive demand that has become unrivaled for AI data centers is pushing semiconductor-related infrastructure up to new heights.

What stage of the generative AI revolution bull market originating in the United States are we at now? While this is uncertain, it may continue until short sellers give up and scramble to buy call options. It is said that a bull market grows amid skepticism, but looking around after coming this far, we have not yet emerged from the dimly lit forest of skepticism. AI and semiconductor infrastructure-related hidden stocks that have not yet been fully bathed in sunlight include Nitta Corporation <5186>, MITACHI CO.,LTD. <3321>, TMH <280A>, and OHARA INC. <5218>. Also worth noting are RORZE CORPORATION <6323>, which is on the verge of breaking into all-time high territory, and Tri Chemical Laboratories Inc. <4369>, which seems ready to finally show its true potential with a break above the Ichimoku cloud on the daily chart.

Tomorrow's schedule includes the March household survey (and fiscal 2025 household survey), the Bank of Japan Monetary Policy Meeting "main opinions" (from the April 27-28 meeting), and the trade statistics for early to mid-April, all to be released before the start of morning trading. Additionally, a 10-year government bond auction will be held during morning trading hours. During afternoon trading hours, the March economic indicators (preliminary values) and consumer activity index will be released. Individual companies scheduled to announce earnings include FUJIFILM Holdings Corporation <4901>, Furukawa Electric Co., Ltd. <5801>, Sumitomo Electric Industries, Ltd. <5802>, DAIKIN INDUSTRIES, LTD. <6367>, Mitsubishi Heavy Industries,Ltd. <7011>, Kawasaki Heavy Industries,Ltd. <7012>, OLYMPUS CORPORATION <7733>, SUMCO CORPORATION <3436>, and Shiseido Company, Limited <4911>. Overseas, the May ZEW German economic sentiment survey, April U.S. Consumer Price Index (CPI), and April U.S. fiscal balance will be released, and a U.S. 10-year government bond auction will be held. Additionally, attention will be focused on remarks by New York Fed President Williams, who is scheduled to participate in a panel discussion hosted by the Swiss National Bank.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.