As anticipation builds for the CPI announcement, a wait-and-see attitude prevails, with investors exploring risk management strategies to prepare for war and interest rate hike uncertainties.
The root cause of the current market's adverse factors is the spread of the Middle East war. Recently, national bond yields and oil prices have risen simultaneously, and market uncertainty has intensified, especially after former President Donald Trump stated that 'the war will continue until the end of October.' Concerns are growing that a prolonged war will further increase oil prices and exacerbate inflationary pressures.
The Treasury Department bought back $5.2 billion in national bonds, but the market had expected over $10 billion. This shortfall in expectations contributed to a further sharp rise in national bond yields.
Individual investors tend to 'buy the dip' when the market plummets. In contrast, foreign investors react mechanically to both bad and good news, blindly following market direction rather than technical analysis. These differing responses from investor groups further amplify market volatility.
The market's attention is focused on tonight's release of the U.S. Consumer Price Index (CPI). The market is currently awaiting the CPI announcement near a critical technical support line. If the CPI figure is lower than expected, the market is highly likely to rebound strongly immediately.
In a situation where the end of the war is difficult to predict, the possibility of an interest rate hike is projected as low, but uncertainty persists. Therefore, investors must manage their portfolios while simultaneously managing the risk of a potential interest rate hike. The premise of all investment is a risk management strategy that flexibly responds to market conditions.
In investment strategy, if it's not a core stock, consider selling when it drops by 4-5%. Core stocks can be approached with short-term trading, but holding them long-term based solely on performance and technology can be risky in the current market conditions. Given high market volatility, investors must clearly define their stock-specific response strategies.
The host argues that it's worth challenging the market even on a day like today. Conversely, CEO Park Byung-chang suggested that considering purchases next week would be safer, accounting for potential uncertainties over the weekend.
Yesterday, institutional investors absorbed approximately 1.2 trillion won in selling from foreign investors. This is presumed to be an inflow from financial investments and private equity funds, but if this passive buying is temporary, institutional selling might emerge today. Whether institutions sell today is a key factor to watch in the market.
Buying at the bottom during a single-peak decline carries significant risk. The bottom can only be confirmed when the stock price does not break the previous low and transitions into an upward trend.
One should not mistakenly interpret a mere stop in price decline after a fall as bottom confirmation. The bottom can only be confirmed when an upward trend is clearly established, with the price breaking through its previous high after falling. It is crucial to select stocks with confirmed bottoms through this process. Even amidst current macroeconomic headwinds, efforts are needed to find targets where supply and demand concentrate when the market remains resilient.
Even if it's not true, once news breaks, stock supply and demand can change rapidly, making recovery difficult. Investors tend to prioritize the flow of supply and demand over the factual accuracy of information. Therefore, stock price declines due to misinformation can have a long-term negative impact on investor sentiment.
The market hovering near new highs despite a deluge of adverse news could actually harbor greater risks. Domestic and external uncertainties such as inflation, employment, interest rates, and elections still persist. A lack of fear in the market can lead investors to lose vigilance and expose themselves to unexpected risks.
Changes in the political landscape damage the narrative for specific policy-related sectors like secondary batteries and renewable energy. There is a precedent of the renewable energy industry being negatively impacted during former President Trump's administration. Conversely, AI infrastructure industries like data centers are viewed as essential regardless of political variables. Sectors discussed as beneficiaries of Trump-related policies may see investor sentiment deteriorate if policy momentum weakens.
While growth and inflation are cited as key reasons for potential rate hikes this year, the final interest rate level and conditions for halting hikes were not clearly stated. This ambiguous stance further increases market uncertainty.
TSMC's August sales significantly exceeded market expectations, confirming robust demand in the semiconductor market. Furthermore, TSMC's continuous global factory expansion indicates that the semiconductor shortage still persists. As a result, the semiconductor industry is expected to maintain its growth trajectory for the foreseeable future.
Our market is also showing a resilient trend despite various adverse factors. This suggests that if even minor adverse factors are resolved, the market is likely to experience upward pressure. It is analyzed that the market is bottoming out even amid the current downturn.
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