Stock Market Ahead of Chuseok: Reaching 7,000 Points and Strategy

Just before closing, the market showed volatility, turning into a very slight buying trend again.

Experts assessed that careful observation of the direction of foreign investor supply and demand is necessary.

The number of rising stocks was small, and with supply and demand concentrated in specific stocks, it was difficult for many stocks to rise together.

Considering the current interest rate levels and other macroeconomic environments, it is analyzed that a general market-wide rally is difficult.

Although the spot market showed weakness, the possibility of futures demand driving the market is raised.

It was observed that if this futures demand is maintained until the end, foreign investors could temporarily push up the market with futures without spot buying.

Researcher Lee Kwon-hee mentioned that if raw material costs rise, companies are likely to respond by increasing product prices.

A supply zone is currently formed in the 110,000 to 120,000 won range, and it is expected that this will need to be absorbed.

Renewable energy stocks such as O Holdings and HD Hyundai Energy Solutions saw their stock prices fall.

This decline is analyzed as a temporary phenomenon due to supply and demand factors rather than specific internal corporate woes.

The recent weakness in the secondary battery sector is also seen as having influenced the decline in renewable energy-related stocks.

In the US, controversy over AI governance regulations, such as the creation of an AI army, erupted, but Microsoft expressed its opposition, showing a difference of opinion.

Despite these regulatory issues, there was almost no impact on domestic memory semiconductor stock prices, and they reacted more sensitively to the issue of Samsung Electronics' increased HBM (High Bandwidth Memory) supply.

Upon news of increased HBM volume from Samsung Electronics, investors expressed hopes that Samsung Electronics could catch up with SK Hynix.

However, the possibility of a decrease in the number of AI data calls if the 'Human on the Loop' method is introduced was also mentioned.

This supply shortage situation has persisted without change in figures from May to July.

Researcher Lee Seon-yeop evaluated that corporate fundamentals have strengthened significantly compared to three months ago.

He emphasized that in terms of fundamentals alone, stock prices should have already reached their previous highs.

However, he analyzed that since stock prices are greatly influenced by supply and demand and macroeconomic environments, a strong fundamental might still lead to a divergence from actual stock prices.

In particular, a meeting with Doosan Group was confirmed first, and investors' attention is focused on his movements.

Lunit, a medical AI company, was named one of the world's top 500 healthcare companies by Time magazine.

It is analyzed that the stock prices of domestic medical AI-related companies rose in a thematic manner due to this news, and researcher Lee Seon-yeop explained that it is appropriate to view this rise as a short-term issue.

It is expected to evolve from LLM models to AI agents and then to physical AI.

Physical AI is projected to develop in three stages: manufacturing, medical, and home.

Currently, medical AI primarily focuses on image analysis, and it is important to identify the point at which robots contribute to actual sales.

Attention is drawn to whether there will be hints about the progress of LTA (Long-Term Agreement) and HBM production volume.

Selling early at the point where an upward trend is confirmed is highly likely to lead to regret later.

It is advisable to maintain over 50% of the portfolio in semiconductor equipment/materials and top two semiconductor stocks combined.

Although there are unexpected negative factors such as geopolitical risks, the growth potential of the AI market is judged to offset these negative factors.

For the index to break out of its box range, the roles of Samsung Electronics and SK Hynix are crucial.

The sector-specific ripple effect differs depending on the market-leading entity.

If SK Hynix leads the market, a concentration phenomenon occurs where other sectors show weakness.

On the other hand, if Samsung Electronics leads, there is a greater possibility of a synchronized rise with other stocks.

The preferred stock between Samsung Electronics and SK Hynix should be determined based on the driving force of the index's rise.

The current index level of 7,000 is analyzed to have room to rise to 7,500.

CEO Park Byung-chang considers the movements of oil prices and the 10-year Treasury yield as primary indicators when assessing market conditions.

He interprets the situation where oil prices have fallen to $94, below $100, and Treasury yields have also dropped to 4.96% as a positive signal.

He emphasizes that bellwether stocks like semiconductors are not targets for frequent, short-term trading.

For ordinary investors, stocks that have already risen significantly pose great fear and risk to enter.

Traders enter when they see trading volume accompanying the initial rise, and stocks that have already surged tend to surge again next time.

Therefore, a more effective strategy is to observe stocks that have confirmed an upward trend and then make staggered purchases during correction periods.

It is important to make staggered purchases of stocks showing initial upward signals, such as pullbacks, rather than chasing stocks with the highest daily surge rate.

In particular, areas where Korea has enjoyed spillover benefits, such as semiconductors, solar power, shipbuilding, and batteries, are likely to be threatened.

The possibility of the US Trump administration allowing imports of Chinese cars, for example, could act as a negative factor for Korean companies.

Concerns are raised that if the US and China cooperate, the export competitiveness of Korean companies could be weakened.

The primary reasons for deciding to increase weight were the breakthrough of Samsung Electronics' 120-day moving average and confirmed improvement in foreign investor supply and demand.

He emphasized the principle of trading stocks stronger than the market and assessed that the fundamentals of the semiconductor industry as a whole remain solid.

Analyst Lee Jeok-kyu acknowledged that his past judgment did not align with the market and responded to the positive changes in the semiconductor market.

This is analyzed as a major market observation point as major overseas institutions such as BlackRock perceive the Korean stock market as undervalued, and it remains to be seen whether this will translate into direct buying.

Market experts mention statistics from the past 20 years, where the Kospi's performance was better than that of small and mid-cap stocks at year-end, advising cautious approach to increasing portfolio weight now.

Concerns arise that hasty stock changes in a market without abundant liquidity could lead to being out of sync.

Therefore, if held stocks are not in an industry shunned by the market, a strategy of holding rather than selling is recommended.

Given the current market uncertainty, the decision to increase weight needs to be made after carefully observing intra-week market trends.

Technically, they are also positioned above the 120-day moving average, maintaining a solid trend.

It is emphasized that if share buybacks and cancellations proceed, preferred shares may see more favorable price appreciation compared to common shares.

Recently, companies with high volatility, such as DB Hitech and EO Technics, show a tendency for 'fresh' stocks beyond traditional large caps to move.

It is analyzed that these stocks have a relatively low proportion of individual investors, making them likely to rise easily.

In particular, glass substrate-related stocks like JNTC are also mentioned as possibly showing volatility, drawing market attention.

The focused HBM strategy of both companies is likely to lead to increased demand for outsourced packaging for DDR5 and other products.

The current PBR (Price-to-Book Ratio) of the semiconductor industry is lower than its past average, indicating sufficient room for further upside.

Institutional investors are observed to be intensively buying Samsung Electronics, which is interpreted as a high expectation for stock price recovery even after the ex-dividend date.

It is explained that Samsung Electronics is seen as correcting itself after having risen first and then coming down, now rebalancing to match Hynix's delayed rise.

Within the market, there were rumors circulating about Druckenmiller's visit to Korea as early as two weeks ago.

This leads to a personal opinion that institutional investors may have obtained this information in advance and preemptively purchased Samsung Electronics.

This is because the related outcomes will already be absorbed by the US stock market during the holiday period.

If a market crash occurs, it will instead be used as an aggressive buying opportunity.

Korea is negotiating for a 15% stake in Westinghouse, but the US side proposes 5% and the board 7.5%, showing a difference of opinion.

It is argued that securing over 10% stake is necessary for board appointment, indicating a gap between the target stake and actual negotiations.

Negotiations are currently underway with the US for a 7% stake plus 'alpha', and it is judged that cooperation itself is important even if the stake is somewhat lower.

This illustrates that securing the 15% stake targeted by Korea will not be easy.

There is a view that concerns about US-China AI discussions leading to a substantial slowdown in the AI industry are excessive.

Instead, the market sees the continued postponement of Anthropic's listing to November as a negative factor.

There are also unconfirmed reports that Google's Gemini test version is quite excellent, suggesting that such 'noise' could have a greater impact on the semiconductor market.

Some also suggest that the possibility of eased semiconductor equipment regulations through the US-China summit could temporarily weaken investment sentiment.

Ahead of the Chuseok holiday, with approximately 250 rising Kospi stocks compared to 500 falling stocks, the market's perceived sentiment is relatively low.

Currently, a concentration phenomenon is prominent, where only certain leading stocks like semiconductors show strength, indicating a need for warmth to spread across the overall market.

Expert Park Byung-chang analyzed, "Tomorrow and the day after, Samsung Electronics and Hynix might rest, and other sectors could gain strength. It's not a situation for being aggressive or confident until tomorrow and the day after the Chuseok holiday."

In this situation, instead of aggressive buying before the holiday, it is recommended to maintain current holdings or, if not invested in stocks, consider buying after the holiday, approaching with a relaxed stance.

Renowned investor Druckenmiller changed his portfolio strategy, reducing his proportion of AI-related stocks by about 20%.

He sold all AI chip-related stocks including Broadcom, Intel, Micron, Corent, and Lumentum, and significantly reduced his ARM Holdings stake.

CEO Song Jae-kyung commented, "If he held a maximum of 100 in AI, he recently announced he reduced it to 20%. It seems he has shifted from chip-centric to manufacturing and equipment."

Instead, he elevated TSMC to the second position in his portfolio, showing a move to focus on semiconductor manufacturing capabilities and equipment rather than AI chips themselves.

CEO Song Jae-kyung explained, "There's a primary market, which is the issuance market. But where is the price determined for receiving shares in this issuance market? It's determined in this secondary distribution market," emphasizing the connection between the primary issuance market and the secondary distribution market.

Companies actively communicating with investors through IR activities is part of a strategic effort to secure favorable conditions in the primary issuance market for future capital increases or IPOs (Initial Public Offerings).

As recently as June of this year, a prevailing sentiment among foreign investors was to dismiss the Korean market as a 'casino'.

However, recent visits and company tours by renowned investors like Druckenmiller are likely to act as a positive signal for the Korean market.

One panelist expressed anticipation, saying, "Until June, everyone joked that Korea was a casino. But if Druckenmiller comes in, visits companies, and meaningful investments are revealed, then perhaps even those mocking foreign investors might change their minds."

If these movements lead to significant investment performance in the Korean market, it could serve as a turning point for foreign investors who have viewed Korea negatively.

While some mention that the situation is already resolved, this could be a premature judgment, and further observation is needed.

According to Red Davies Research's analysis of 18 interest rate hike cycles since the 1940s, cautious responses considering three scenarios – fast cycle, slow cycle, and non-cycle – are required.

CEO Song Jae-kyung explained, "Futures are, in essence, bets on what will be received two months later, so strictly speaking, they don't 100% reflect the current oil situation."

While Saudi Arabia maintains its lowest production levels in 30 years, keeping spot oil prices high, the difference in oil price data between platforms like Investing and MarketWatch stems from variations in how data is reflected during futures contract rollover.