[Seoul Market Wrap] Market Rebounds After 8 Days of Losses as 'Mr. Kangbu' Makes His Move

Concerns about Coreweave eased due to Jensen Huang's remarks… CXMT fears are widely assessed as being excessive. Due to falling interest rates and a rebound in semiconductors, KOSPI rises in 8 trading days and KOSDAQ rises in 7 trading days.

Key market trends

• ① Jensen Huang "I don't need support"… Coreweave concerns calmed

NVIDIA CEO Jensen Huang said he was 'optimistic' about Coreweave's financial burden, which raised concerns about AI investment this week.

He stated that the cost of capital is actually falling and the financial situation is continuously improving, so no additional support is needed.

The factor that lowered market concerns was that the line was drawn not on the possibility of support but on the need for support.

SPI is evaluated as a statement that can lower concerns about NeoCloud.

Deutsche Bank and Bank of America also suggested that there were no fundamental adverse events that could explain the recent decline in stock prices.

The price of Coreweave corporate bonds, which had fallen to 78 cents, also recovered to the low 80 cents.

• ② CXMT concerns eased… "Prototype level, not commercialization"

Evaluations continued that concerns surrounding China's CXMT's 4F² technology were excessive.

Most securities firms assess that the currently disclosed technology is at the prototype level, not at the stage of full-scale commercialization.

There is growing awareness that China's memory chase and concerns about the sustainability of AI investment, which have pressured semiconductor stocks this week, have been reflected in stock prices faster than actual industry changes.

Samsung Electronics and SK Hynix, which led the plunge, rebounded, and automobiles, pharmaceuticals, semiconductor managers, and securities also rose significantly.

The number of stocks rising is overwhelmingly high, resulting in a typical technical rebound after an excessive decline.

• ③ U.S. Treasury interest rates fall to the 5% level... The rise in the second half of the day narrowed.

U.S. Treasury yields, which had exceeded 5.3%, fell to the 5% range, providing relief to the stock market.

It is believed that the decline in interest rates was largely due to the preference for safe assets due to the recent increase in stock market volatility rather than the calming of inflation.

Kevin Worthy's position regarding the October FOMC is that he will not predict the conclusion but will make a decision based on future data.

Compared to the October interest rate hike recently raised in the market, the intensity was evaluated as low.

The increase in the index decreased as foreign futures selling increased in the latter part of the day, but there were no noticeable changes in US futures and international oil prices at the time.

Interpreted as the result of profit-making sales after a short-term sharp rebound rather than new overseas negative news.

Supply and demand and industry

The intensity of foreign selling has calmed down, and net buying has occurred in most industries except electrical and electronics.

On KOSDAQ, they sold electrical/electronics and machinery and made net purchases of pharmaceuticals and general services.

Institutions were net sellers of electrical and electronics, transportation warehouses, and finance, while net buyers were pharmaceuticals, transportation equipment, food, IT services, and entertainment.

In KOSDAQ, institutional net purchases in most industries

Samsung Electronics and SK Hynix rebounded, and buying momentum spread across industries that had recently suffered significant declines, including automobiles, pharmaceuticals, semiconductor division, and securities.

Market Man's Perspective

The stock market plunged this week as two bad news related to semiconductors were concentrated a day. In particular, the fact that Chinese memory companies have appeared at the center of the news is similar to the sharp drop last July.

At that time, rumors of Apple's possible purchase of Chinese semiconductors, China's DUV equipment technology, Meta's lease of surplus computing capacity, and rumors of a reduced memory load in Nvidia's next chip shook the market. The difference this time is that foreign supply and demand and news related to AI and Chinese memory had a greater impact than the ETF issue.

This year, AI-related concerns have been recurring once a quarter, and the market reaction to the same news is growing. This means that investors' funds are concentrated in AI and semiconductors. It is necessary to keep in mind the possibility that similar types of volatility will repeat in the future.

Since it has fallen sharply for a short period of time, the recovery process may not be smooth. Both markets have already entered the oversold zone, and the drop to the July low is excessive. For the time being, it is necessary to monitor supply and demand volatility and watch for rebound movements by stock, focusing on existing leading stocks and large stocks.

Source: Market Man's stock story t.me/shmstory

YouTube: Sihwangman TV www.youtube.com/@blueoak1004

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