New York Stock Market Closes Mixed Amid Falling Treasury Yields; Nvidia Down for 7th Straight Day

There are talks that the Trump administration may allow Apple to use Changxin Memory. Specifically, there is speculation about allowing the use of NAND flash from Yangtze Memory Technologies and DRAM from Changxin Memory. The market interprets this as a diplomatic gesture ahead of the summit scheduled for September. However, some analysts believe that these moves will have a minimal actual impact on the market.

Despite recent skyrocketing DRAM and SSD component prices, laptops are still available at hot deal prices around 870,000 won, with free RAM upgrades. There is interest in the background behind maintaining such price competitiveness despite rising component costs. This is believed to be the result of a complex interplay of market supply chain adjustments and inventory situations.

An analysis suggests that as humanoid robots become more sophisticated, vast amounts of memory will become essential. Humanoids must process enormous amounts of data to learn and remember various actions. Lee Seon-yeop, an expert, emphasized the need for specialized memory, explaining that this is also connected to Elon Musk's large-scale investment in Megapack. Securing and processing large amounts of data is expected to be key to the development of AI and robotics technology.

The Bank of England has launched an investigation into the excessive concentration of leveraged investment in AI semiconductor-related stocks, expressing concerns about potential risks to the financial system. It has identified that British hedge funds have particularly concentrated leveraged investments in specific AI semiconductor stocks, such as South Korea's SK Hynix and Taiwan's TSMC. Such excessive leveraged investment could lead to liquidation through prime brokerage, potentially causing supply and demand shocks for specific semiconductor stocks and increasing market volatility. The Bank of England is closely monitoring the ripple effects of this situation on the overall financial system.

As the concentration in semiconductor companies, which led the stock market in the first half, is expected to ease in the second half, rebalancing investment portfolios is becoming crucial. While the direction of semiconductor companies remains central to the market in the second half, analysis suggests that diversifying stocks is necessary for stable returns. Expert Lee Seon-yeop emphasized the importance of establishing a stable earnings base when constructing a portfolio. With institutional investors intensifying their performance competition, there is a possibility of large-cap sell-offs, making this a time to be cautious in stock selection.

The U.S. Treasury emphasized its possession of approximately $1 trillion in cash and announced a plan to purchase $4 billion worth of long-term Treasury bonds. This is interpreted as an intention to stabilize long-term market interest rates by purchasing long-term bonds with funds secured through short-term bond issuance. The Treasury is believed to have conveyed to the market the message that it can flexibly implement interest rate adjustment policies based on its abundant liquidity.

The U.S. Treasury is implementing a 'Treasury Twist' strategy. In a situation where short-term bond yields are low while long-term bond yields are high, the Treasury aims to induce a decline in long-term rates by issuing short-term bonds and purchasing long-term bonds. Expert Lee Seon-yeop explained that while this strategy may slightly increase short-term bond yields, it can have the effect of lowering long-term bond yields. This is interpreted as part of an effort to enhance the efficiency of monetary policy and reduce the cost of Treasury bond issuance.

Nvidia is making a massive investment totaling $7 billion in Poolside, a startup developing open AI models. It will initially invest $1 billion and plans to pay an additional $6 billion for technology licensing and the acquisition of key engineering talent. This is interpreted as Nvidia's strategy to accelerate the development of its own open AI ecosystem and strengthen its leadership in AI technology. The large-scale investment is expected to further solidify its position in the AI semiconductor market.

The Corporate Governance Forum strongly demanded that Samsung Electronics and SK Hynix improve their shareholder return policies. The forum argued that if the severe undervaluation of their stock prices is not resolved by next year, the management of both companies should be prepared to resign. Furthermore, it warned that shareholders might consider opposing the re-election of directors whose terms are expiring. They called for extending the annual shareholder return guidance until 2027, disclosing realistic profit estimates and transparent cash flows, and actively working to enhance shareholder value.

Micron announced that it would return 100% of its free cash flow to shareholders, but concerns have been raised about the ambiguity of this policy. Micron stated that it would return 100% of 'true leftover money' after excluding all commercial expenses, but it did not clearly disclose which expenses would be included. Expert Park Byung-chang evaluated Micron's policy as much more ambiguous than Samsung Electronics' or SK Hynix's policy of returning 50% of free cash flow, explaining that investors find it difficult to judge the actual effect of the return policy without clear information.

Foreign investors have net sold approximately 190 trillion won in the domestic stock market this year, heavily suppressing stock prices. Institutional investors also showed a selling advantage, with net sales of 53 trillion won in the financial investment sector. In contrast, individual investors net bought about 150 trillion won, absorbing these sales. Expert Park Byung-chang analyzed that this supply-demand imbalance is a major obstacle to the stock price increases of certain stocks, especially Samsung Electronics and SK Hynix. He predicted that only by clearing these piled-up selling pressures would a stock rebound be possible.

In the second half of the stock market, a shift away from a semiconductor large-cap-centric market is expected, with active rotation among individual sectors. Expert Park Byung-chang emphasized the need to pay attention to stocks showing independent movements or attempting a trend reversal after hitting a low, such as cosmetics ODM, financial holding companies, and nuclear power, in addition to semiconductors. This suggests that the concentration phenomenon in specific sectors will ease, and investment opportunities may arise in various industries. Investors are advised to diversify their portfolios by closely analyzing the fundamentals of individual stocks and thematic issues.

Regarding robot stock investment strategy, advice suggests focusing on robot component companies rather than complete vehicle manufacturers. Expert Lee Ji-hyun stated that instead of large market cap companies like Hyundai Motor or LG Electronics, it is necessary to pay attention to smaller companies with proven technology, such as Robotis. In particular, robot component companies have a higher probability of demonstrating performance compared to complete vehicle manufacturers, making them advantageous. Investors are advised to construct their portfolios around robot component companies with actual technology and performance, rather than simply chasing leading stocks.

The U.S. Treasury's announcement that it would use its TGA (Treasury General Account) balance for bond purchases, contrary to market expectations, elicited a positive market reaction. With the TGA balance reportedly higher than anticipated, the Treasury's statement that it would use this as cash led to expectations that it would limit upward pressure on long-term interest rates. Expert Lee Ji-hyun assessed that this decision by the Treasury fostered a sense of relief in the market and contributed to the stabilization of the financial market.

Ahead of the establishment of the 12th Basic Plan for Long-term Electricity Supply and Demand (Electricity Plan), expectations for expanding domestic power infrastructure are growing. As the maximum power demand required by 2040 is projected to increase by over 20GW compared to the previous 11th Electricity Plan, the necessity for additional nuclear power plant construction is being raised. Expert Lee Ji-hyun explained that unlike the 11th Electricity Plan, which projected the construction of two nuclear power plants, discussions now suggest up to four may be needed. This is interpreted as a move to address increasing national energy demand, such as from mega-projects.

The recent passage of the Power Grid Special Act by the National Assembly has opened the way for increased private participation in power grid construction projects. Researcher Yoo Jae-sun explained that the passage of this bill allows for the 'Build-Transfer' method. Previously, the Korea Electric Power Corporation (KEPCO) solely planned and directly constructed with its own funds in a monopolistic structure. Now, private capital can participate in constructing power grids and transferring ownership to KEPCO. This is intended to increase the time and financial efficiency of power grid construction, interpreted as a policy change to utilize private sector capabilities while maintaining the monopolistic structure.

Despite Samsung Electronics announcing a 110 trillion won shareholder return policy, disappointment circulated in the market, as it fell short of expectations. Investors had hoped for share buybacks and cancellations to fundamentally boost share value, but the announced policy focused on dividends. Center Head Baek In-jae analyzed that Samsung Electronics likely found it difficult to decide on share cancellations due to the fragility of its ownership structure. Despite the large-scale return policy, doubts about its stock price boosting effect remained, proving insufficient to appease investor dissatisfaction.

As a scenario for Samsung Group's governance restructuring, Samsung C&T acquiring Samsung Electronics shares held by Samsung Life Insurance is being prominently discussed. Expert Kim Jong-moon expects this form of share transfer to materialize soon. To achieve this, Samsung C&T is likely to raise cash by selling its stake in Epice Holdings, among other measures. If this scenario proceeds smoothly within the year, the overall governance structure of Samsung Group could improve, and shareholder return policies could also be strengthened.

While treasury stock cancellation directly impacts stock price increases, acquiring treasury stock before cancellation also provides downward support for the stock price. Expert Lee Seon-yeop explained that the process of acquiring treasury stock absorbs market sell-offs, thereby defending against stock price declines. From the moment a company announces its treasury stock purchase plan until the actual purchases are made, it is analyzed to alleviate market selling pressure and reduce stock price volatility.

An analysis suggests that the shareholder return policy announced in August is strengthening market confidence. Expert Lee Seon-yeop explained that expectations of dividend yields exceeding 10% due to this policy have increased the burden of entering short positions. This shows that companies are demonstrating a clear commitment to shareholder returns, thereby improving investor sentiment and instilling long-term confidence in corporate value. As this would be a difficult decision without confidence in the industry, this policy is seen as a positive signal for the market.

It has been reported that the introduction of a majority shareholder ownership cap at the Korea Exchange is almost confirmed. Expert Lee Seon-yeop stated that the ownership limit is being discussed at either 20% or 34%, with an option to allow up to 34% in special cases where there are no conflicts of interest. However, the timing of the bill's passage through the National Assembly is not yet fixed. If this system is introduced, significant changes are expected in the Korea Exchange's governance structure and decision-making process.

Recent rises in U.S. Treasury yields are not merely temporary phenomena but a result of structural changes, according to an analysis. Expert Lee Yoon-soo explained that bond yields consist of expected inflation, real interest rates, and term premium, and that de-globalization and demographic shifts are continuously increasing upward pressure on prices. Furthermore, the U.S. government's debt interest burden is projected to reach its highest level since World War II, which is identified as a factor that will structurally maintain high interest rates.

Signs are emerging that the U.S. long-term debt market is entering a downward phase. Expert Lee Yoon-soo analyzed that the simultaneous occurrence of rising long-term bond yields and currency depreciation signifies a crack in the trust placed in assets guaranteed by the hegemonic power. In particular, a situation where the central bank directly acquires debt can be seen as the starting point of this decline in trust. Within this trend, the possibility of a 'debasement trade' emerging is increasing, which is interpreted as a harbinger of significant changes in the global financial system.