[Seoul Pre-Market Brief] Semiconductor Strength, but Oil Prices and Rates Weigh on Investors

Buying low prices on U.S. semiconductors that fell for 8 consecutive trading days... MSCI Korea index rose 4.08%, WTI $103.66, US 10-year bond 5.14%... Interest rate and oil price burden continues amid rebound in risky assets

Key market trends

• ① Semiconductors rebound after falling for 8 consecutive days… Spreading awareness of excessive decline

NASDAQ and S&P 500 rise as low-price purchases flow into AI and semiconductor stocks that have recently plummeted

Western Digital, SanDisk, Marvell, and SK Hynix ADR led the rebound, rising 3-5%.

As the Philadelphia Semiconductor Index fell for 8 consecutive trading days until last week, there was growing awareness that the market was overly reflecting short-term supply and demand factors such as VARA liquidation rumors and large-scale put option transactions.

The fact that Meta and Tesla earnings announcements are scheduled this week also have an impact on investor sentiment.

CNBC assessed that the optimistic performance outlook of major technology companies could help stabilize the market.

Amazon led the index's rise with a surge of nearly 5%, while Intel, Palantir, Moderna, and ServiceNow were also strong.

• ② Coreweave's intraday strength returns… Wall Street maintains positivity

Coreweave started off strong in the early days of the market with positive reviews from securities firms, but gave up its gains and closed slightly lower.

Goldman Sachs lowered its target stock price to $106 but raised its investment opinion to 'buy', saying it is differentiated from other neocloud companies.

Truist also reiterated its buy opinion, saying that the failure of the Perms IPO does not indicate a structural weakness in Coreweave's business model.

On the other hand, Gartner maintains its existing caution, saying that the pace of revenue growth is lagging behind AI infrastructure investments.

As of the end of the second quarter, Coreweave's order backlog was $104 billion.

During the recent plunge, individual investors' purchases of Coreweave increased to the highest level ever.

• ③ Oil price $103, US 10-year Treasury yield 5.14%… Factors limiting the rebound

International oil prices started lower on the news of the lifting of sanctions on Russian crude oil, but turned upward after reports of Houthi rebels attacking Saudi facilities.

WTI closed at $103.66 per barrel, up 2.22%.

UBS assesses that international oil prices are being supported by continued attacks on ships in the strait.

French financial instability also has an impact on the bond market, with the French 10-year government bond interest rate rising to 4.93%.

The US 10-year Treasury bond interest rate also rose to 5.14% as some funds flowed out of government bonds, a safe asset, due to the rebound in technology stocks.

In the U.S. housing market, 14.5% of contracts were canceled in September due to high interest rates.

Market Man's Perspective

Recently, selling intensity has been overwhelmingly stronger than buying in the stock market. Considering that the index decline continued to widen after the 6th, it can be seen that forced liquidation or selling to avoid it increased the sharp decline.

When looking inside the index, the difference is more apparent. In October, the largest decline in large-cap stocks was close to 20%, while mid-cap stocks fell by less than a third and small-cap stocks fell by just over 2%. Rather than a collapse of the entire market, the supply-demand effect was largely due to selling concentrated in large-cap stocks with high market capitalization.

As large-cap stocks were bought again the previous day, the opportunity for a reversal was established. There has yet to be any movement to lower performance forecasts, especially for semiconductors. Concerns about the expansion of memory supply in China are difficult to realize in the short term, and the prevailing opinion is that basic demand is still strong.

It is not easy to return to a stable upward trend immediately after a plunge. The burden of oil prices and interest rates also remains. Considering volatility for the time being, it is necessary to look at the movements of existing strong industries and stocks with improved performance that have recently suffered significant declines.

Today's checkpoint

Semiconductor: Will low-price buying continue after falling for 8 consecutive trading days?

Large-cap stocks: Changes in supply and demand of Samsung Electronics and SK Hynix after MSCI Korea Index +4.08%

Oil prices: Will supply instability from the Middle East further increase after WTI $103.66?

Interest rates: US 10-year Treasury note moves 5.14%, French 10-year note moves 4.93%

Performance: This week's Meta and Tesla performance and changes in AI investment outlook

Key indicators

Dollar Index 107.98 (+0.14%)

International oil price $103.66 (+2.22%)

Volatility Index 18.44 (-7.75%)

US 10-year Treasury bond interest rate 5.14%

MSCI Korea Index +4.08%

Night Futures -0.11%

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

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

This article was rewritten from Shihwangman's Stock Story Telegram post with the author's consent. All content may contain errors and cannot be used as a basis for buying or selling as it is not a recommendation to buy or sell. The content of this post cannot be used as legal basis under any circumstances.