[Seoul Weekend Wrap] Oil Surge, Coreweave Plunge Weigh on Markets

WTI surges 3.4%, exceeding $101... Inflation concerns resurface due to geopolitical instability

Coreweave -11%, semiconductor index falling for 8 consecutive days... MSCI Korea -3.7%, Overnight Futures -3.5%

Key market trends

• ① WTI exceeds $101… Increasing geopolitical uncertainty in the Middle East and Russia

WTI surges 3.4%, exceeding $101 per barrel again

Geopolitical tensions are rising following Ukraine's attack on a Russian oil refinery and Houthi rebels' attack on the Yemeni presidential palace.

Iran's attacks on ships passing through the strait continued, with at least 10 ships reportedly attacked since the 11th.

Concerns that rising oil prices could stimulate inflation again weighed on investor sentiment.

Government bond interest rates fall slightly despite a surge in oil prices

As technology stocks continued to sell, funds flowed into government bonds, a safe asset.

Bloomberg said there were few hawkish signals in Kevin Warsh's recent comments, raising the possibility of a rate freeze in October.

The U.S. 10-year Treasury bond interest rate fell to around 5.1% and then stagnated.

• ② Core Weave -11% in one day… AI investment concerns reignite

Coreweave, which had rebounded sharply the previous day, plunged 11% again, serving as the main cause of the market decline.

The prospect that the expected corporate value of Antropic, which is preparing for an initial public offering, could be lowered from the existing $2 trillion to $1.5 trillion is also putting pressure on AI investment sentiment.

Some argue that the IPO should be postponed until safety and governance issues are resolved.

As interest rates rise, the capital cost of investing in AI infrastructure has risen, and concerns persist that the rate of profit generation relative to the enormous investment may be delayed.

The stock market continued to give positive evaluations to Coreweave's business itself.

BNP assesses the need to prove that it can meet its obligations with its own cash flow rather than external capital while maintaining its target stock price of $169.

Bank of America assessed that Coreweave is lowering capital costs and increasing sales visibility by leasing data centers rather than building them directly and signing long-term 5-year contracts with hyperscalers.

• ③ Semiconductor index fell for 8 consecutive days... For the first time since 2008

As Coreweave's plunge and AI investment concerns spread to semiconductor stocks, the Philadelphia Semiconductor Index fell for eight consecutive trading days.

This is the first time since 2008 that the price has fallen for 8 consecutive trading days, and the only two times it has fallen for 9 consecutive trading days were in July 1996 and May 2006.

The memory ETF is down more than 20% from its September high and about 40% lower than its June high.

Micron and SK Hynix ADRs also fell along with Coreweave's weakness.

Fundstrat evaluates decline due to CXMT-related concerns as a buying opportunity

The CXMT issue is not directly related to HBM competition and the recent market reaction is believed to be excessive.

Notable Capital predicts that if Antropic and OpenAI are listed and more financial information of AI companies is disclosed, uncertainty in the current market may be reduced.

Market Man's Perspective

The market's view on AI investment has become more selective than before. Rather than the growth rate itself, the stock price is determined by how quickly invested funds can be converted into profits. In a situation where interest rates are high, there is bound to be increased vigilance towards companies with huge debt and capital costs.

The fact that Coreweave fell 11% again in one day also shows this atmosphere. Major securities companies are still positive about the business model and ability to secure power, but the market appears to be trying to confirm cash flow and debt repayment ability.

The adjustment period for semiconductors is also getting longer as AI concerns and Chinese memory issues overlap. The Philadelphia Semiconductor Index fell for eight consecutive trading days for the first time since 2008. On the other hand, some continue to say that CXMT's impact on HBM competition is limited and that the recent decline is excessive.

Immediately after the domestic stock market's sharp rebound the previous day, overseas semiconductors fell again. The MSCI Korea index fell 3.7% and overnight futures also fell 3.5%. As supply and demand volatility in the domestic stock market has recently been high, it is necessary to first check the movements of large semiconductor stocks, including Samsung Electronics and SK Hynix.

Today's checkpoint

Oil prices: Will they rise further after WTI exceeds $101 and the burden of inflation?

Coreweave: Corporate bonds and stock prices move after plummeting -11% in one day

Semiconductor: Will the Philadelphia Semiconductor Index rebound after falling for 8 consecutive trading days?

Domestic market: MSCI Korea -3.7%, overnight futures -3.5% reflected in early trading

Large-cap stocks: Changes in foreign supply and demand, centered on Samsung Electronics and SK Hynix

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

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

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