Fourth-Quarter Stock Market: Now Is Not the Time to Sell

It is advantageous not to respond to fluctuations without supply-demand changes. As the proportion of ETFs in the Korean market expands, rebalancing between 2 PM and 3 PM every day may become a routine that increases market volatility.

Since this causes temporary fluctuations without supply-demand changes, it is advantageous for investors to accept this as a new market routine and use it to their advantage, rather than responding immediately to such phenomena.

The experience of the sharp decline in June and July must be quickly erased from the mind to make calm and rational judgments in stock investing.

Even with slight market declines, the strong sentiment to sell for supply-demand reasons acts strongly, and this wariness has been identified as a key factor hindering rational investment.

Attention should be paid to trend flows based on supply-demand logic rather than trading value analysis.

Therefore, he recommended focusing on trend flows according to market supply-demand logic rather than concentrating on trading value analysis when setting investment strategies.

Supply starting from the power equipment sector showed a pattern of rotating through memory semiconductors to CPU and hyperscaler-related stocks.

This suggests a clear supply-demand flow is forming within AI-related stocks, and AI momentum has become a major driving force leading the market.

After the initial shock of rate hikes, the market is gradually stabilizing, and the concentration phenomenon in leading stocks is strengthening.

Even in this situation, the upward logic of tech stocks receiving AI momentum remains valid.

Investors are expressing dissatisfaction as market valuations are low relative to the profit-generating ability of semiconductor companies, and there is a forecast that this undervaluation structure will be resolved from a long-term perspective.

Foreign investors are expanding purchases of Samsung Electronics for dividends and shareholder value enhancement. Mid- to long-term fund inflows are also coming in considering dividends and momentum, and this earnings announcement is expected to be interpreted positively by the market.

Foreign investors are showing buying interest in Samsung Electronics for dividends and shareholder value enhancement, and mid- to long-term funds are confirmed to be entering large-cap domestic semiconductor stocks considering dividends and momentum.

When US semiconductor ETF funds flow in, ADR inclusion causes disparity, but market participants expect this disparity to adjust through a sharp rise in the common shares.

The possibility of narrowing the disparity between Samsung Electronics and SK Hynix ADRs is raised. This is because at year-end in December, expectations for special dividends grow while long-term fund inflows are most active.

These factors are expected to positively affect narrowing the disparity between Samsung Electronics and SK Hynix common shares and ADRs.

Infrastructure investment requires a long-term approach based on fundamentals, while consumer discretionary requires a short-term approach based on momentum.

Government stimulus measures with several cash supports raise questions about the effectiveness of boosting consumer discretionary spending, and the analysis suggests there may be limits to their effectiveness.

Changxin Memory focuses on LPDDR, and Yangtze Memory focuses on NAND flash, and the analysis suggests that market share in high-end server and HBM (high bandwidth memory) is not yet realistic.

The perception of narrowing technology gaps in current domestic media reports is pointed out as overly exaggerated.

In reality, domestic companies hold an overwhelming advantage in technology for high-end server memory and HBM markets.

Therefore, a cautious approach is needed regarding the technology threat theory from Chinese memory companies, and excessive concern should be guarded against.

The corrections in June and July significantly increased the value appeal of Samsung Electronics and SK Hynix.

Current market supply-demand participants judge that sufficient profits can be made by investing in large caps Samsung Electronics and SK Hynix rather than materials, parts, and equipment companies, increasing preference for these large caps.

Accordingly, the investment threshold for the materials, parts, and equipment sector has somewhat lowered.

The growth of the Samsung Electronics and SK Hynix ecosystem will continue, but the US expansion of materials, parts, and equipment companies has high uncertainty in terms of sustainability.

In particular, the analysis suggests that the uncertainty of tax and tariff benefits upon the end of the Trump administration's reshoring policy reduces long-term investment appeal.

Therefore, in the second half and year-end market, attention is needed on Japanese materials, parts, and equipment companies with high competitiveness and expected price elasticity.

The power equipment sector was the first in the AI momentum tech stock rotation, but the analysis suggests it will be difficult for all stocks to surpass previous highs and continue strength.

Due to significant differences in internal revenue, performance verification, and pipelines for individual stocks like Hyosung Heavy Industries, performance is expected to vary sharply by stock.

In particular, companies with US revenue proportions and irreplaceable core technologies like ultra-high voltage will show differentiated strength.

The nuclear power sector is presented as an area to approach based on strong momentum like SMR (small modular reactors) rather than current performance.

Among Western countries excluding China and Russia, Korea is considered the only alternative that can economically build nuclear power, indicating long-term growth potential.

However, the revenue-sharing issue with Westinghouse is acting as a factor hindering the current momentum of the nuclear power sector.

After the low point formation on July 29 and 30, a large amount of individual investor selling was identified.

Caution is needed against chasing purchases when stock prices rise, as this carries a high risk of leading to losses again.

CEO Lee Ji-hwan advised that under the condition that the July low is not broken, at least until year-end, a strategy of holding stocks and growing profits is valid.