As the effect of the U.S. Treasury's long-term bond buyback is minimal, increased AI investment is stimulating rising Treasury yields, escalating market uncertainty. Ray Dalio recommends reducing bond exposure and investing in gold and Bitcoin, highlighting the importance of alternative assets.
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Despite the U.S. Treasury expanding bond buybacks, their effect appears to have been nullified within a day. The Treasury increased the scale of buybacks to stabilize the long-term bond market, but major U.S. bond yields once again showed an upward trend. The market generally believes that this expanded buyback policy had only a short-term effect.
Companies raising funds to expand AI investments lead to increased corporate bond issuance, which in turn stimulates rising Treasury yields—a dilemma currently faced. For memory semiconductor companies, AI-related investments act as a boon, but for the overall market, they act as a detriment due to increasing interest rate burdens. This suggests the importance of finding a balance between AI industry growth and interest rate stabilization.
Even though there's an assessment that the fiscal deficit may have already peaked, it does not mean that the national debt itself is decreasing. The increase in the U.S. fiscal deficit continues due to issues like customs refunds and Ukraine war costs. Therefore, the theory of a peak in the fiscal deficit does not immediately imply a reduction in national debt, and concerns about national debt still remain.
As high interest rates persist and Treasury yields do not easily decline, attention should be paid to sectors that serve as a hedge against market volatility. Specifically, stablecoin-related stocks and stocks related to the Clarity Act are emerging as part of this strategy. This is an extension of the strategy previously demonstrated by the cosmetics sector in exploiting market niches and is expected as a countermeasure to new market conditions.
The U.S. Treasury's expanded long-term bond buyback policy aims to stabilize long-term bond yields. However, concerns are raised in the market that this expansion could undermine dollar confidence and cause weakness. A weaker dollar could lead to reduced demand for Treasury bonds, ultimately putting upward pressure on Treasury yields. This indicates that the Treasury's policy could lead to unintended side effects.
Stablecoins have the potential to act as a source of demand for Treasury bonds, driving down Treasury yields. For this, the expansion of the stablecoin market is essential, requiring the prior passage of the Clarity Act. Former President Trump continues to urge the passage of this bill, increasing expectations for the institutionalization of the stablecoin market.
Renowned investor Ray Dalio warned that the U.S. faces an unprecedented level of debt, increasing the burden on the bond market. He diagnosed an impending debt crisis and advised investors to reduce their bond holdings and instead increase their allocation to gold and Bitcoin. This is interpreted as an investment strategy that emphasizes the importance of new digital assets alongside traditional safe havens.
Bitcoin's MVRV (Market Value to Realized Value) indicator recently showed a near-vertical surge for the first time in the current bear market cycle. An MVRV ratio greater than 1 means that, on average, Bitcoin holders are in profit. This surge could align with past patterns of bottoming out in bear cycles, interpreted as a signal of a Bitcoin market rebound.
ITSEN Global, which owns Korea Gold Exchange as a subsidiary, is expected to directly benefit from rising gold prices. Furthermore, its connection to the growth of the stablecoin market gives it a dual momentum from both gold and stablecoins. This structure adds to its investment appeal in the current market environment where interest in alternative assets like gold and Bitcoin is growing.
Despite Samsung Electronics announcing a shareholder return policy mentioning resources of 90 to 110 trillion won, its stock price closed after giving back all gains. This is attributed to the lack of specific details compared to SK Hynix's shareholder return policy. The main reasons cited were the absence of new long-term policies after 2027 and disappointment over items deducted from Free Cash Flow (FCF).
The core of SK Hynix's shareholder return policy is to return over 50% of cumulative Free Cash Flow (FCF) from 2025 to 2027. This effectively sets 50% as a floor, allowing for additional returns if more resources are secured, creating an open-ended structure. This flexibility, which differentiates it from Samsung Electronics' fixed 50% policy, was positively received by the market.
News broke that Park Sung-hyun, CEO of domestic AI semiconductor startup Rebellion, met with Jensen Huang, CEO of NVIDIA, at NVIDIA's headquarters in the U.S. The meeting is expected to cover various discussions including technology partnerships, equity investments, and acquisitions. Following this news, the stock prices of venture capital firms invested in Rebellion, such as Mirae Asset Venture Investment, SV Investment, and Capstone Partners, surged in after-hours trading.
SK Telecom's corporate value is likely to be reassessed due to news of Anthropic's IPO application this month. With predictions that Anthropic's IPO size could surpass that of SpaceX, the value of SK Telecom's stake in Anthropic is also expected to change significantly. If Anthropic is valued at $2 trillion, SK Telecom's stake could be worth approximately 9 trillion won, making SK Telecom an attractive investment among large-cap stocks, alongside the Rebellion issue.
SK Telecom is drawing attention as an AI-related investment alternative compared to Naver. Not only the Rebellion IPO momentum but also its connection to AI data center-related businesses enhance SK Telecom's investment appeal. This suggests that SK Telecom has the potential to grow beyond a mere telecommunications company into a key player in the AI era.
I think SK Telecom would be a good one to watch next week, too.
For major sectors such as semiconductors, biotech, and secondary batteries to rebound in the market, essential macroeconomic environmental changes must precede. The most crucial condition is for Treasury yields to fall, or at least for oil prices to come down. It is analyzed that only when these macroeconomic indicators stabilize can overall market sentiment improve and major sectors begin a full recovery.
If the U.S. successfully controls long-term interest rates, it will create a positive market environment with tailwinds for gold, Bitcoin, and growth stocks. However, if interest rate control fails, a situation could arise where asset values are simultaneously pressured due to increased fiscal burden. Even in such a scenario, gold and Bitcoin are expected to solidify their status as alternative assets and continue their upward trend when bond yields rise.
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