[Market Man’s Load Briefing] On November 4th, the stock market rose ‘after the midterm elections’

AI and semiconductor industries, which suffered significant declines, rebound... US semiconductor index rises by 2%

Expected to resolve midterm election uncertainty... Pay attention to the supply and demand of domestic technology stocks

Key Market Trends

① AI stocks rebound… Semiconductor rises by 2%

In the U.S. stock market, the rebound in technology stocks and the decline in international oil prices had a positive effect, but the trends by industry were mixed. Technology, industrial goods, communication services, and real estate rose, while materials, consumer staples, and energy fell.

Low-price buying flowed into AI-related stocks that had recently suffered significant declines. The semiconductor industry index rose by more than 2%, leading the Nasdaq, and Nvidia rose by 2%, taking first place again in market capitalization. Microsoft, Amazon, and Meta also rose by around 2%, and AMD, Super Micro Computer, Oracle, and Coreweave also showed strength.

Semiconductor stocks fell 22% from their high on the 6th of last month, falling below the 200-day moving average. As concerns over AI capital expenditures and financing were repeatedly reflected, the perception that the recent decline was excessive led to a buying trend.

② Concerns about AI investment still remain… Confirming expenditure sustainability rather than ‘growth’

Doubts about AI investment have not been completely resolved. There were also predictions that Antropic's listed corporate value could be lowered from the initially mentioned $2 trillion to $1.5 trillion to $1.6 trillion.

The market's attention is shifting from AI demand to how much massive infrastructure investment can be sustained. The order backlog of hyperscalers amounts to approximately $2.5 trillion, but it is assessed that time is needed to improve cash flow.

BoA believed that even if infrastructure spending decreases, if demand for AI is maintained, the investment cycle itself will not end but may be prolonged. It is believed that the recent decline in semiconductor stocks largely reflects concerns that the investment cycle is already nearing its end.

③ Midterm elections underway… The market is starting to look at the ‘after’

As the U.S. midterm elections progress, the market is also paying attention to the possibility of easing uncertainty after the elections.

The past trend was strong. According to the Carson Group, in the last 19 midterm elections, the S&P 500 rose six months after the election. Deutsche Bank also analyzed that the stock market rose by an average of 7% in the fourth quarter of the year in which the midterm elections were held.

Semiconductors also showed a strong trend after the past midterm elections. In the case after 1994 compiled by Yahoo, the semiconductor industry all rose from November of the year of the midterm election to June of the following year, with an average increase rate of 22%.

There is no guarantee that past returns will be repeated this time. This time, variables such as AI capital expenditures, interest rates, and data center policies overlap, so it is necessary to leave open the possibility that volatility will continue even immediately after the election results are confirmed.

The Man's Perspective

Recently, the market has been experiencing unusually large fluctuations. Over the past 13 trading days, the average fluctuation between up and down days amounts to about 2.8%. As the AI ​​financial controversy and the US political schedule are simultaneously reflected, stock prices are moving significantly even with small news.

AI-related financing issues have been largely reflected in stock prices since last week. Ahead of Antropic's listing, we will also look at whether investors' process of securing funds affects stock market supply and demand. In the past, there were cases where supply and demand were shaken as funds moved out of the stock market ahead of the listing of a large unlisted company.

The domestic stock market reflected AI concerns to a greater extent than the US the previous day. On the other hand, U.S. semiconductor stocks rebounded more than 2% overnight, the MSCI Korea index rose 2.27%, and overnight futures rose 1.70%. It is necessary to check how much of the previous day's decline is recovered, focusing on semiconductors in the early trading period.

In the mid- to long-term, concerns about peak performance are largely reflected in the stock price. It is not the stage to determine a short-term bottom, but as volatility increases, it is necessary to distinguish between the prices and supply and demand of existing leading stocks that have suffered significant declines even though their performance has been confirmed.

Today's checkpoint

Semiconductor: Samsung Electronics and SK Hynix react after the US semiconductor index rebounded by 2%

Midterm election: Will volatility in US technology stocks increase during the process of confirming the results?

Supply and Demand: Whether foreign or institutional purchases will return to existing leading stocks that have recently plummeted.

AI Investment: Differentiating between financing concerns and actual semiconductor and cloud demand

Oil prices: Will there be further decline as the US-Iran negotiations progress?

key indicators

Dollar Index 101.86 (+0.12%)

International oil price $96.09 (-0.38%)

Volatility Index 20.83 (-1.51%)

US 10-year Treasury bond interest rate 4.95%

MSCI Korea Index +2.27%

Night Futures +1.70%

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.