Sentiment/No BoJ intervention for now/Shipping prices/Some data, some earnings comments

As always the case, sentiment follows price. And just as there were a lot of bears at around 4,800 in the S&P 500, now of course there are a lot more bulls near 6,000. Investors Intelligence said yesterday that Bulls rose 6.5 pts to 42.3 from 35.8 last week. Bears have fallen to 26.9 from 30.2. At the market lows, bulls stood at just 23.5 while bears were at 35.3. AAII today said Bulls were up for a 3^rd week, by 1.8 pts to 37.7, the most since late January. Bears fell by 7.7 pts to 36.7 which is the lowest since late January. The CNN Fear/Greed index has gone from 3 in early April, got as high as 70 a few days ago and closed yesterday at 66. Bottom line, nothing extreme here but the sentiment has obviously gotten a lot more comfortable which means we all should not be from a contrarian standpoint and yesterday's selloff was the first sign of that.

Yes, we saw the big move up in US yields, globally too, yesterday. But, what was also again very noteworthy was the further weakness in the US dollar in the face of the rate rise here. The Dollar index fell back below 100. Understand the importance of the dollar moves if there is a foreign rethink of its holdings of US assets. Many of these assets are not FX hedged so as the dollar weakens, that itself could exaggerate the foreign selling of stocks/bonds and anything else and the foreign selling in turn exaggerates the dollar weakness. What I now have my eye on is the US CLO market because Japanese investors are large holders. JBBB is a Janus etf that holds CLOs rated between B and BBB.

JGB yields continued higher with the 40 yr yield now up for the 11^th day in the past 12 and by 50 bps over these last few weeks to 3.69%. The 10 yr yield was up almost 5 bps to 1.57% and is just 1.5 bps from the highest level since 2008. The catalyst overnight for the further moves were these comments from BoJ board member Asahi Noguchi, "The moves are indeed sudden, but I can't simply conclude that they are abnormal. There is the market's own judgment at play here, so I believe it would be inappropriate to intervene without reason and attempt to manipulate the situation in any way." Surprising to hear from a BoJ member who does NOT want to intervene.

10 yr JGB Yield

Updated container shipping prices just came out and after last week's sharp rise, they were only up modestly w/o/w. From Shanghai to LA, the price of a 40 foot container went up by $61 to $3,197. The Shanghai to NY route saw a price gain of $177 to $4,527. I'm surprised they didn't go up more which maybe implies that a 30% tariff on imported Chinese goods is still punitive.