The new asset class/Sentiment/Japan/PMI's/Company comments

Back in the day when Apple's revenue and earnings growth rate was stellar and its stock dominated I referred to it as its own asset class. We had stocks, bonds, commodities, currencies and Apple. Nvidia has now certainly taken that mantle, especially with its 77% gross margins, rarefied air. That said, it does seem that the earnings beat and guide up are closer to market expectations than what we've seen over the past year. Also, that gross margin will eventually get competed away but not anytime soon it seems.

The Bull/Bear spread in the Investors Intelligence survey remained extreme with a more than 40 point differential. While Bulls slipped by 1.5 pts to 57.3, Bears were down by a like amount to just 16.2. AAII today said Bulls rose 2.1 pts to 44.3 while Bears fell a touch to 26.2. These surveys follow the near Euphoria in the Citi Panic/Euphoria index and the 11 yr high in the Market Vane Bullish Consensus. The CNN Fear/Greed index closed yesterday at 74 vs 79 one week ago but assume it jumps at least this morning. 

Bottom line, the market mood is pretty excited so from a contrarian standpoint be aware. 

They finally did it. The Nikkei 225 index finally exceeded its last day of trade close in 1989! Finally, and we remain bullish and long. Amazingly though, the TOPIX Bank Stock index remains 80% below its 1989 peak thanks to the BoJ destroying the business model and profits of banks with what they did to the yield curve, aka, flattened it. We remain long Sumitomo Mitsui Financial.

Of note too, it seems again that BoJ Governor Kazuo Ueda is setting us up for the end of NIRP. He said in parliament today, "I expect that a virtuous economic cycle in which inflation rises gradually with an increase in wages and employment will strengthen. Signs have been observed that businesses are becoming more active when deciding wages as labor demand tightens." Notwithstanding these comments, the 10 yr JGB yield was little changed as is the yen.