[Market Man’s Loading Briefing] October 12, Performance, Middle East, Treasury Stock, CPI Variables

U.S. stock market generally doing well during the holidays... Open AI sales controversy calmed down in one day

The rise in interest rates and oil prices slows down... In Korea, attention is paid to whether supply and demand will recover from Samsung Electronics and SK Hynix.

Key Market Trends

① Open AI concerns quickly calmed down... AI growth continues

AI-related stocks were weak for a while due to the news that the forecast for Open AI sales during the holidays was lowered from $70 billion to $50 billion.

However, concerns quickly calmed down as it became known that this was due to a change in sales calculation method rather than actual poor performance.

Bloomberg predicts that OpenAI's annualized sales could reach or exceed $70 billion by the end of the year.

Although the performance growth of AI companies is still fast, the market has reacted sensitively to related reports, confirming caution about overinvestment in AI.

② The rise in interest rates and oil prices slows down… Continue to monitor the situation in the Middle East

As the US large-scale government bond issuance schedule, which lasted for three days, comes to an end, the interest rate rise calms down.

As President Trump announced that there would be no attack on Iran before the midterm elections and mentioned the possibility of supplying Russian diesel, a significant further rise in oil prices was limited.

News of the Saudi airport attack broke over the weekend, but the response from the Saudi stock market and international oil prices was limited.

However, as negotiations between the United States and Iran have not yet been completed and oil tanker attacks continue, the situation in the Middle East needs to be continuously monitored.

③ Earnings season begins in earnest… Pay attention to this week’s CPI as well

U.S. companies begin reporting earnings this week, starting with UnitedHealth and major banking stocks.

The market expects corporate profits to increase by about 30%, raising the possibility that actual performance will exceed expectations.

Seasonality, in which the stock market rose 21 out of the last 23 times in the fourth quarter of the year in which the midterm elections are held, also supported investor sentiment.

On the other hand, the burden on prices and interest rates remains, so the volatility of government bond yields and growth stocks is likely to increase again depending on this week's CPI results.

Checkpoint next week

U.S. memory stocks performed poorly during the holiday season. On the first day, the Open AI controversy had an impact, and later, semiconductor stocks continued to sell as some funds moved from hardware to software.

In Korea, supply and demand are most important following Samsung Electronics' earnings announcement and the end of its share buyback. SK Hynix also recently experienced increased stock price volatility as foreign selling continued. As the controversy over the peak of the memory industry has already been going on for more than a year, it can be seen as a combination of existing concerns coupled with supply and demand instability rather than a new negative factor.

On the other hand, forecasts that the memory supply shortage could last longer than expected continue. If interest rates and oil prices stabilize, it is necessary to check whether the price attractiveness of Samsung Electronics and SK Hynix relative to their performance is highlighted again.

There are still no clear signs that the stock market has transitioned into a full-fledged bear market. Although index volatility may continue due to the burden of interest rates and oil prices, it is time to pay attention to whether the stock market continues, focusing on industries with improving performance and policy and investment-related stocks that have recently shown strength.

Source: Market Man’s Stock Story t.me/shmstory

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