Why is it scary even though semiconductor stock prices are recovering?

When semiconductor stocks rise, I feel like I'm missing out.
But when US semiconductor stocks plummet, I suddenly get scared.
Yesterday was a market where I wanted to organize where capital is heading amidst this intense volatility.

Capital is starting to return to semiconductors

Yesterday, the ones that caught my attention were Taiyo Yuden, Tokyo Electron, and Panasonic.

This is not an exhaustive list.
However, looking at it as material to consider the direction of capital, it seemed that capital is starting to return little by little not only to semiconductors themselves, but also to electronic components and AI infrastructure.

But US semiconductor stocks collapsed significantly

On the other hand, semiconductor stocks fell sharply in the US market at night.
The SOX index fell more than 6% on July 1st, and many of its constituent stocks declined.

This is the biggest sense of discomfort from yesterday.

In Japanese stocks, it looks like capital is returning to semiconductors and electronic components.
But in the US, semiconductors are being heavily sold off before the employment statistics.
Even though expectations remain, I cannot fully commit to being bullish.

I think this discrepancy is the difficulty of the current market.

The long-term theme has not disappeared

Semiconductors are still strong as a long-term theme.
AI, data centers, power supplies, electronic components, and semiconductor manufacturing equipment.
The demand story will not disappear easily.

That is why capital does not completely exit.
When it drops a little, buying comes in again.
Capital returns to strong stocks.

However, the current market is not a straight line.

Caution before employment statistics

Ahead of the US employment statistics, there is a risk that the view on interest rates will change.
Therefore, it is natural for profit-taking and position adjustments to occur.

Furthermore, the US ADP employment report fell below market expectations.
There is also an atmosphere of wanting to gauge the strength of the labor market.

In other words, yesterday's semiconductor market was not a simple risk-on.

Capital is returning to strong themes.
But, I cannot buy with full force before a macro event.
It seems these two things were happening at the same time.

High volatility makes judgment waver

The hardest part of this kind of market is the speed of price movements.

When they go up, I feel like I've been left behind.
When they go down, I think that it was dangerous after all.
When they go up again the next day, I don't know what to believe anymore.

For salaryman investors, this volatility is quite tough.

It's not like I can watch the order board all day.
I check stock prices during breaks at work.
I check them during my lunch break.
I look at US stocks at night, and my feelings waver again.

Since I can't watch them constantly myself, I feel that in situations like this, it's important not to try to chase everything.

What you should look at is where the capital remains

The important thing is not to panic when you see stocks that have gone up.
It is also not to immediately lose confidence when you see US stocks that have gone down.

As I have said repeatedly,
what you should look at is where the capital remains.

Electronic components like Taiyo Yuden.
Semiconductor manufacturing equipment like Tokyo Electron.
Large-cap stocks involved in AI infrastructure, such as Panasonic.

If capital is flowing into these stocks, the semiconductor theme may not be over yet.

Strength at high price levels is a mirror of market sentiment

However, what I want to be careful about here is not to take strength at high price levels as a reason to buy.

Stocks at high price levels are a mirror of market sentiment.

They go up because expectations are high.
But precisely because expectations are high, they fluctuate significantly with even a little anxiety.
The stronger the theme, the harder it becomes to buy.

That is why I think yesterday's market was not a day to find strong stocks, but a day to read the caution behind that strength.

What to look at next

So, what should we look at next?

First, how semiconductor stocks react after the US employment report.
Will buying return immediately after a drop?
Or will the recovery be weak?

Next, I want to see if capital spreads in Japanese stocks.
I want to see if it spreads beyond Taiyo Yuden and Tokyo Electron to electronic components, data centers, power supplies, and AI-related areas.

And I want to check not just the index, but also the number of stocks that have risen.
Even if the index is strong, if it's only a few large-cap stocks, it's a selective market.
If they are bought broadly, the temperature of the market changes.

Summary

In summary, yesterday's semiconductor market was one where both 'recovery' and 'fear' existed simultaneously.

Capital is starting to return.
However, there is also strong caution ahead of the employment statistics.
That is why volatility is high.

What is important in this phase is not to chase it based on emotion.

The more you feel the anxiety of being left behind, the more you should calmly observe where the capital is going.
The more you feel fear, the more you should break down why it is being sold.

In a strong market, I want to confirm the 'true nature of the difficulty in buying' rather than the reasons to buy.

In the current semiconductor market, which is stronger: your desire to get on board or your fear?

Thank you for reading until the end.

*This article does not recommend any specific investment targets. Please invest at your own risk.