Oil Prices Break $100, Market on Alert

West Texas Intermediate (WTI) crude oil prices surged over 8% in a short period, but unlike previous sharp increases, they climbed gradually by 1-2% daily, making it difficult for investors to react. This gradual ascent clouded investor judgment, and the 'surely it won't go up further' mentality led to the liquidation of short positions, fueling the oil price overshoot.

Department Head Kim Tae-sung said, "This time, the rise was difficult for individual investors to respond to because it was like getting soaked in a drizzle, 1% or 2% each day... 'Surely it won't go up further after coming this far?'"

The U.S. stock market has entered a phase of technical consolidation. This is the result of increased investor caution ahead of key events such as the Federal Open Market Committee (FOMC) meeting and the U.S.-China summit.

Department Head Kim Tae-sung explained, "Currently, I can't definitively say whether the U.S. stock market is weak or strong. For now, it's in a consolidation phase," adding that there is no immediate concern about excessive short-term declines.

With international oil prices surpassing $100, the significance of the Producer Price Index (PPI) and Consumer Price Index (CPI) releases has faded. The market already considers next month's inflation figures, driven by rising oil prices, a certainty.

Department Head Kim Tae-sung stated, "Now that it's over $100, what significance do this month's PPI and CPI have? Next month's September PPI and CPI are obviously going to be higher even without looking." He explained that oil price volatility, rather than the inflation figures themselves, is the key market variable.

This situation is expected to significantly influence central bank monetary policy decisions.

Concerns have been raised that rising international oil prices could severely impact not only general consumers but also the agricultural sector. This is due to the potential for increased agricultural production costs from surging diesel prices and disruptions in securing essential diesel for farm machinery operation.

Department Head Kim Tae-sung commented, "It's not just about general consumers; I think we need to consider the agricultural sector in this situation. Farmers might actually struggle to secure the diesel needed to operate tractors." He pointed out that this risk could be further amplified in conjunction with Europe's winter gas demand.

European countries missed the cheapest window to secure liquefied natural gas (LNG), and are now rushing to secure it at a premium.

While holding and observing current tech stocks (Samsung Electronics, Nvidia, etc.) is maintained, investment interest in LNG-specialized companies has been suggested.

Logistics disruptions in the Strait of Hormuz and the Red Sea region continue, exacerbating supply chain issues. The biggest problem is that manufactured inventory cannot be transported smoothly, and land transport is deemed inefficient due to skyrocketing costs.

This situation suggests that it will take a considerable amount of time for smooth maritime transport to resume, and in the investment market, opinions have been raised that investment diversification into alternative energy and secondary battery sectors is necessary.

The ongoing surge in international oil prices has shifted the outlook for interest rate policy. Experts, who had expected an interest rate freeze just yesterday, now foresee a higher possibility of an interest rate hike due to the rapid rise in oil prices.

Accordingly, they emphasized the urgency of portfolio management and suggested the need for an investment strategy that accounts for interest rate increases.

To manage risks arising from increased market volatility, a sell guideline focusing on foreign investor demand was provided. It suggests holding onto stocks if foreign buying recovers, but considering selling off about 10-15% of holdings if foreign selling accelerates during trading hours.

This is interpreted as a partial sell-off for risk management purposes, rather than an unconditional full sell-off, aiming for a flexible response to market conditions.

An analysis suggests that the U.S. is re-evaluating its tariff strategy to address its massive national debt. However, excessive tariffs could backfire on the U.S. economy, leading to moves to suspend tariffs on raw materials like copper.

If tariffs prove difficult, the U.S. administration might pursue the 'Clarity Act,' which would compel stablecoin issuers (USDC, USDT) to purchase U.S. Treasury bonds.

This would secure a stable customer base for U.S. Treasury bonds, signaling a new direction in policy.

Samsung Electronics' stock price has fallen below the 260,000 won level, raising the possibility of further declines. The key is whether the 250,000 won level can be maintained, as its support could prevent additional drops.

Expert Kim Tae-sung explained, "Samsung Electronics is likely to start by falling below the 260,000 won level, but even if there's a further drop, I think it will be fine as long as it doesn't fall below the 250,000 won level."

Foreign and institutional supply and demand trends, as well as the possibility of share buybacks, were cited as variables that could affect stock movements. He advised against aggressive buying ahead of key indicator releases on Friday evening.

As the ETF weighting of the 'Big 3' (Samsung Electronics, SK Hynix) decreases, investors may turn their attention to KOSDAQ material, parts, and equipment (SoBuJang) stocks, according to analysis.

Expert Lee Joo-ho commented, "Since the 3-Company ETF weighting has decreased, many people will think, 'Then, shouldn't I look at KOSDAQ?'" He explained that semiconductor ETF rebalancing is a one-off issue, and the continuation of foreign selling will be the main checkpoint for the day's market.

Concerns have emerged about increased volatility in the bond market due to rising government bond yields, and the potential collapse of the safe-haven asset paradigm. In this situation, there is a high probability of buying flowing into defensive stocks such as insurance and financial stocks.

Expert Lee Joo-ho emphasized, "With rising government bond yields, I believe there's a possibility of buying entering defensive sectors like insurance or financial stocks. So, let's prepare for today's trend and this week's bond market volatility." He added that while observing is best for now, if active response is considered, energy-related stocks and defensive stocks are worth watching.

This is based on the judgment that oil refinery stocks, despite rising international oil prices, could see profit-taking sales due to concerns about declining refining margins.

Expert Lee Joo-ho explained, "Of course, oil refinery stocks are good, but I think nuclear power stocks, and renewable energy stocks, which can be an alternative to rising international prices, are more likely to move. Nuclear power stocks are slowly rising." He also stated that positive movements are observed in nuclear power-related stocks like KEPCO E&C, suggesting their attractiveness as an alternative investment to rising international oil prices.

Warnings have been issued against concentrating investments in specific stocks or betting on market direction.

The interviewee emphasized, "But there is naturally risk involved in your preferred areas. This is a time when risk management is needed. If it goes up, you should sell some to secure cash; that way, you'll be able to respond later." Securing a cash reserve by selling holdings during a market rebound was proposed as an effective strategy for flexibly responding to future market changes.

This is acting as an attractive investment opportunity for many investors.

The interviewee mentioned, "The robot industry itself, if you look at it, isn't just moving on expectations alone; it seems that the parts where it can gradually create structural growth are acting as an attractive factor for many investors." Performance-based robot-related stocks like Robotis and SPG are showing relatively less volatility, and expectations for actuator exports in global markets like the U.S. and China are also cited as factors driving the growth of the robot industry.

AhnLab's stock price tends to fluctuate significantly during election seasons, often leading to it being perceived as a 'political connection stock' rather than based on its intrinsic corporate value.

The interviewee strongly advised, "AhnLab is actually a representative stock related to a specific politician, so I hope you don't invest in AhnLab. It's not that the company is bad, but its connection to that politician is too strong. It's a stock that moves only during election seasons, so while investing for security is good, the company has largely moved as a political connection stock and has been heavily influenced." If one wishes to invest in cybersecurity stocks, it is advisable to consider other alternative stocks unrelated to political themes.