Is the AI bull market overheating? Capital inflows into U.S. equities are starting to slow down, and the next wave of gains may depend on whether South Korean stocks trigger FOMO.

The AI-driven rally accelerated again last week, but several quantitative signals have already issued warnings: the Nasdaq has exhibited a combination of 'rising spot prices alongside rising volatility,' with the VIX continuing its downward trend while the VXN has seen a noticeable rebound. The skew of options on U.S. tech stocks is rapidly declining, and the process of quantitative funds covering their short positions is nearing completion. In other words, while the AI-driven trading in U.S. equities has not been declared over, the fuel to sustain further price increases through short-covering is diminishing. A core statement from Nomura's research report released on May 11 was straightforward: 'At least as far as U.S. equities are concerned, the AI rally may be catching its breath.' However, this framework does not place the reversal signal within the Nasdaq itself but rather links it to South Korea.

wallstreetcn10:47

Nomura: Upward revision of year-end target for Nikkei 225 to 63,000 points

Nomura Securities raised its year-end target for the Nikkei 225 Index from 60,000 points to 63,000 points on May 12, according to Gelonghui.

Gelonghui Finance09:33

The High Municipal Government Sends a 'Cautious' Signal! Is the Bank of Japan Slowing Down Its Rate Hike Pace?

A government advisory panel in Japan has warned that the Bank of Japan should exercise caution in formulating its monetary policy, given the deteriorating corporate financing environment and uncertainties stemming from the situation in the Middle East. This has introduced variability into the market's previously strong expectations for an interest rate hike in June.

Golden10 DataMay 11 20:04

Nikkei May Rise on Signs of U.S. Economic Strength -- Market Talk

WSJMay 11 07:44

Funds are flowing into emerging markets, which have experienced significant increases and were previously lagging behind.

Market Overview for Last Week: April 27 to May 8. Tokyo Stock Exchange Growth Index High: 828.75, Low: 756.37, Closing Price: 828.35, Weekly Change: +7.84%. Significant rise observed as investor sentiment improved amid easing excessive concerns over the Middle East situation. Notably, on May 7 and 8 following the extended Golden Week holiday, there was substantial capital inflow into emerging markets that had been lagging, driven by artificial intelligence (AI) and semiconductor-related stocks, pushing the Nikkei Average Stock Price to a record high.

Fisco JapanMay 10 12:35

The USD/JPY pair may struggle to gain momentum as higher oil prices support dollar buying, while concerns about potential currency interventions persist.

In today's overseas markets, the dollar-yen exchange rate is expected to struggle for gains in the European and U.S. forex markets on the 8th. If expectations for an early resolution to the Middle East conflict recede and crude oil prices rise, initial demand for the dollar may emerge. Increased U.S. inflationary pressure could support dollar buying. However, caution over potential Japanese currency intervention may lead to yen buying, acting as a downward pressure on the dollar. Although hopes for progress in U.S.-Iran peace talks have risen, views surfaced the previous day suggesting that an early end to the Middle East conflict would take time. Additionally, the U.S. Federal Reserve (FRB)...

Fisco JapanMay 8 14:45