The most hated market in the world keeps rallying/Japanese inflation/Walmart speaks/Stagflation in Europe

I was a bit early about one year ago saying the Hang Seng was going to outperform the S&P 500 in 2024 because it was dirt cheap and I've never seen a market so hated by so many, along with my general bullish stance on Asia. Well, last year it underperformed instead, rising by 17.7% vs the S&P rise of 23.3% but adding this year and it has run away from the S&P 500, now up 17% year to date and by 37.7% since the last trading day of 2023. That compares with the S&P up 28.2% since then, still of course impressive. Even with the rally in the Hang Seng, it only trades at 10x 2025 earnings estimates and with a dividend yield of 3.4% vs the S&P at 22x with a yield of 1.2%

My point here gets to what I argued on Tuesday that a regime change is underway in global stock markets and just maybe the Mag 7's stock market dominance to the exclusion of so many others is coming to an end.

Japan has an inflation issue still and the BoJ has rates at only .50%. January headline inflation rose 4% y/o/y, up from 3.6% in the month before but as expected. The core/core rate was higher by 2.5% as estimated too vs 2.4% in the month before. Higher food prices were definitely a factor in the headline gain. I've continued to talk about the persistent rise in JGB yields and they are taking a breather today because BoJ Governor Ueda said "Moves in bond yields fluctuate to a certain degree. However, we will purchase government bonds nimbly to foster the stable formation of yields in exceptional cases where long term yields rise sharply." As the BoJ continues to shrink their asset purchases, it will take a lot right now for them to step in I believe. The yen also backed off after rallying below 150 earlier in the day.

Let's get right to the Walmart earnings call because of their high touch point with the US consumer.