Softer July CPI and Strong AI Earnings Lift Nasdaq, KOSPI Also Expected to Rally

The fund is expected to buy semiconductor stocks such as Samsung Electronics and SK hynix, the flagship names of Korean investment. The deal is expected to reaffirm the appeal of Korea's chip market.

This shows DRAM production capacity is falling far behind the pace of AI development.

HBM (High Bandwidth Memory), a high-performance DRAM, is a core component that determines AI data center performance, offering higher bandwidth and power efficiency than standard DRAM. Steady HBM supply is therefore essential to AI industry growth, and related companies urgently need to expand capacity.

Demand for high-performance DRAM is rising exponentially as the AI data center market grows rapidly. The supply shortage is expected to persist for some time, which could present new opportunities for DRAM makers.

Nvidia has chosen to use less memory and spend less while boosting performance through interconnection. AMD, by contrast, is focused on securing as much capacity as possible.

It remains unclear which strategy will prove more efficient. Still, the difference is shaping how hyperscalers and big tech companies design and deploy AI chips and memory.

Each company's HBM strategy could lead to significant differences in AI data center performance and cost efficiency, and will be a key factor shaping competition and the direction of technology in the chip market.

This means improvements are needed in investment conditions, corporate governance, shareholder rights, and other areas.

Market participants argue that solving these structural problems must come first to advance Korea's stock market, and there is strong agreement that the market needs to improve before it can move to the next stage of development.

JP Morgan pointed to the possibility that Korean chip stocks are undervalued, and Morgan Stanley raised its target price for Samsung Electro-Mechanics, supporting this trend. This is seen as unusual, since Samsung Electro-Mechanics trades at a price-to-earnings ratio (PER) above 50 times this year, while Samsung Electronics trades at just 5 times.

The assessment can be read as reflecting high expectations for Samsung Electro-Mechanics' growth potential or particular technological strengths. It suggests investment views can differ even within the chip industry depending on each company's characteristics and market outlook.

The probability of a hike fell somewhat for the September FOMC, but it remains at 100% for the December FOMC, with even a 50bp increase being discussed.

This mood reflects the market's view that inflationary pressure remains high and the Fed will keep its tightening stance. Investors are watching the Fed's next move closely and adjusting their strategies accordingly.

An analysis suggests the rise in gold prices is not simply about stock market record highs or its role as a risk or safe-haven asset. The rebound in gold can be read as a signal that the dollar's strength, a prolonged dollar superstrength, may ease somewhat.

This is seen alongside falling oil prices and a pause in Treasury yields, showing that various variables in global financial markets are acting together. Understanding gold's moves therefore requires a broad view rather than focusing on one or two factors.

An analysis suggests the market is shifting to an environment where contrarian approaches work, unlike in the past. This means that rather than particular stocks or themes leading the whole market, strategies that find opportunities in unexpected places are proving effective.

Investors therefore need to break away from fixed assumptions, analyze the market from multiple angles, and work to uncover hidden value. This shift can be seen as a natural result of rising market efficiency.

This was a slowdown from June's 3.5% increase, read as a sign that inflationary pressure is easing, which gave the market some relief.

Lee Ju-hyun, director, said, "July consumer prices came in fine," adding, "The data was released matching forecasts precisely, and the market showed a bit of reassurance."

A slowdown in US employment data and July CPI matching forecasts are weakening the case for further Fed rate hikes. The market now puts a 60% probability on rates being held steady at the September FOMC. After the CPI release, the hike probability fell back to 40%.

Lee Ju-hyun explained, "Employment is weak, and inflation is not as high as expected and is at a level that's still reasonably managed. Given this, the market logic is forming that there's no real need to raise rates."

This is raising expectations that the Fed will take a cautious monetary stance after weighing the overall economic picture. Holding rates reduces financing costs for businesses, supporting investment and potentially benefiting stock markets.

The US government considers traffic better than expected, while some critics argue actual transit numbers are far lower and that the US is concealing this.

According to Lee Ju-hyun, the number of vessels passing through the Strait of Hormuz recently hit a three-month low, averaging only about 13 ships over five days. Combined with geopolitical tensions in the Middle East, this could become a potential source of unease for global energy markets.

This suggests demand for CPO is surging as the technology plays a key role in AI data centers and similar applications.

Lee Ju-hyun said, "The CEO described customer demand as unusual, so demand is strong," adding, "Because demand is accelerating so much, we are expanding our production capacity."

The remarks reaffirm the growth potential of the CPO technology market and could also lift share prices of related companies. Attention is focused on how CPO will contribute to improving AI data center performance.

According to Lee Ju-hyun, short interest in SpaceX fell sharply from 34% last week to 11% this week, and short sellers rapidly closing their positions was a major driver of the rally.

A short squeeze occurs when investors who took short positions buy back shares to limit losses after prices unexpectedly rise. This can temporarily push prices even higher.

In addition, the increase in shares available for trading after the lockup expiry made it easier for new investors to enter, which likely also supported the price. These factors together are seen as driving SpaceX's rapid price rise.

The remarks raised expectations that SpaceX will exert strong influence in AI, not just as a space exploration company. This could be a chance to re-rate SpaceX's corporate value and is seen as another example of AI's broad industrial impact.

SpaceX's rising AI revenue indicates that AI services like Grok 4.6 are quickly gaining market traction. AI technological progress and commercial success are expected to play an important role in securing SpaceX's future growth drivers.

The CEO of Chinese EV maker BYD said demand is very strong, production is tight, and it may be difficult to meet all of the growing demand. The remark reflects high market interest in BYD's EVs and highlights the importance of supply chain management and expanding production capacity.

If they fail to recover over 45 of the next 90 trading days starting from today, delisting procedures will begin. This shows the exchange's intention to raise market soundness by clearing out weak companies.

Lee Ju-hyun, CEO, explained, "When the index is in a downtrend, you sharply cut trading and investment exposure and hold cash, but once it breaks above the 20-day line and moves toward a short-term moving average bullish alignment, you raise exposure again."

Yesterday the KOSPI broke above its 20-day line, making a shift to bullish alignment of short-term moving averages more likely. This signals a possible short-term uptrend and could be an opportunity for cautious investors to re-enter the market.

He said, "I'm not telling you to buy or sell. You set your own criteria, listen to what I say, and if you find it convincing, you allocate your assets well yourself," encouraging independent judgment over blind imitation.

This suggests individual investors, amid a flood of information, should form their own investment philosophy and, while consulting expert opinions, make final decisions themselves. Such an approach may be a key factor for successful long-term investing.

He said, "Samsung Electronics has set its direction well. Whether it forms a trading range here or rises immediately, I don't know, but I think it will move gradually."

This reflects expectations that Samsung Electronics will maintain a solid trend despite recent market volatility and likely continue a gradual rise. His view appears to take a positive medium- to long-term outlook rather than focusing on short-term moves.

He noted Samsung Electronics' price-to-earnings ratio (PER) is only 3.7 times and SK hynix trades at just 3.2 times next year's earnings, stressing that the expected earnings improvement next year is not reflected in share prices at all.

Lee pointed out that even with expectations of a chip industry recovery, these companies' shares remain low. This can be read as a sign of substantial upside potential for investors.

Especially as demand for high-performance chips surges alongside AI technology advances, the prevailing outlook is that Samsung Electronics and SK hynix will meet this demand and improve earnings. That shares remain undervalued nonetheless means their investment appeal is high.

He therefore argued that investors should take a positive long-term view of large-cap chip stocks, stressing the importance of identifying future value the market has yet to price in.

The 5-day moving average is expected to cross above the 20-day moving average by today's close. Lee Kwon-hee explained, "The 5-day line breaks above the 20-day line today. It's breaking through now. If today's close holds, it will definitely break through. So you should view it as a trend reversal, at least a short-term one."

This is an important technical signal of a shift to a short-term upward trend. A moving average crossover shows the market's overall mood turning positive and can serve as a buy signal for investors.

This shows a perception that Korean stocks are undervalued is spreading in the market. Such a perception can improve investor sentiment and serve as a driver leading to actual investment. In other words, regardless of whether the rumor is true, it creates a positive mood in the market.

He said, "That's the focus today. How much foreigners buy spot. They bought over 2 trillion or 3 trillion won yesterday, but if they dump it all today, it means nothing. Yes. It's important to watch foreigners' spot flows today."

This is an analysis that sustained buying by foreign investors will be decisive in keeping the domestic market's upward momentum. He judged that a steady inflow of capital, rather than one-off buying, is needed for a stable rise in the market.

He said, "Until yesterday Samsung Electronics showed a somewhat stronger performance than SK hynix, but from today hynix is likely to move more strongly than Samsung in terms of absolute growth rate."

Kim said that to consider a new strategy, a rally needs to break above the bullish candle of July 30 over the past two weeks. Samsung Electronics has already broken above that high, while SK hynix has yet to clear it and remains some distance from the top of its trading range.

Kim said, "Samsung Electronics has already moved past that high, so why hasn't SK hynix yet? Then can SK hynix move somewhat more strongly, following Samsung?" This reflects expectations that SK hynix will follow Samsung's lead and narrow the gap.

SK hynix has strengths in AI chips such as high-bandwidth memory (HBM), so it is likely to stand out more as the AI market grows. Investors should therefore watch SK hynix's further upside potential, he advised.

Extra-high-voltage transformers currently take an average of 26 months from order to delivery (as few as 24 months, or as many as 28), so backlog builds quickly, but capacity is fully utilized, raising the question of why capacity isn't expanded to fuel further growth.

Kim said, "For companies like Hyosung Heavy Industries and HD Hyundai Electric, the extra-high-voltage transformers, right? Orders take as little as 24 months and as long as 28, averaging about 26 months. So the backlog builds quickly, but capacity is already full, so shouldn't they expand capacity? Yet why does the situation stay this way without expansion? That's the concern."

By contrast, LS Electric's distribution transformers can be delivered about 10 months after ordering, a shorter production cycle that can translate into faster revenue turnover. Such differences lead to different investment appeal across companies even within the transformer market.

Investors should therefore look closely at each company's competitiveness not only in backlog size but also in terms of production capacity and lead times that affect turnover. These are key indicators for judging long-term growth and profitability.

Kim Tae-sung said, "I don't think you should buy today. It's not a day to boldly buy. Today is a period for those who followed last week's advice to buy amid fear to enjoy their gains. It's not a space for those who held off, saying they wanted to check more before investing."

The analysis is that after prices have already risen substantially, chasing is not advisable; instead, investors who bought when fear peaked, as last week did, should be taking profits. He advised a cautious approach, saying further upside requires clearer investment grounds or waiting for a pullback.