Semiconductors Surge Alone Amidst Treasury Yield-Driven Tightening

In the U.S. stock market, the Dow Jones Industrial Average fell 0.18%, and the S&P 500 rose 0.17%, showing overall minor fluctuations.

However, the Nasdaq Composite Index rose 0.39%, primarily due to a 2.78% surge in the semiconductor index. While major tech stocks like Apple, Microsoft, and Tesla showed weakness, large-cap semiconductor stocks such as Nvidia led the market. This was a result of increased expectations for GPU and High Band Bandwidth Memory (HBM) demand following Nvidia's forecast of a twofold increase in semiconductor sales next year.

The primary reason is the surging demand for GPUs, which are critical for artificial intelligence (AI) data centers. HBM memory companies linked with GPUs also benefited, and memory makers like Micron and semiconductor equipment stocks such as Lam Research showed an upward trend.

Rising interest rates are analyzed as a factor that exerts downward pressure on the stock market and dampens investor sentiment.

Japanese authorities issued a warning to the market by conducting a 'rate check,' a pre-intervention step in the foreign exchange market.

Despite Japan hinting at a potential interest rate hike, the Yen continued its weakening trend against the dollar (156-157 yen) and showed no signs of strengthening.

Consequently, market attention is focused on whether the Won/Yen exchange rate will enter the 880 won range.

This indicates the possibility of a more gradual pace of interest rate hikes, contrary to the previous monetary easing stance. The impact on Korea's interest rate decisions and exchange rates will be determined by Japan's monetary policy and other factors.

However, the market suggests the possibility of an interest rate freeze in October, citing the halt in the Won's appreciation. The U.S. interest rate decision is one of the most crucial variables for Korea's monetary policy.

This increase in energy prices acts as a major factor in core inflation, contributing to overall upward price pressure.

This is expected to create a new trading environment in the relevant market as liquidity for tokenized securities can be provided through authorized market makers.

Governor Pan Gongsheng of the People's Bank of China expressed his intention to reduce the high proportion of real estate and local government loans, which account for a significant portion of the roughly 60 quadrillion won in outstanding loans, and to improve the inefficient loan structure.

This is interpreted as a move by the Chinese economy to seek new growth engines, moving away from its past reliance on real estate-dependent growth.

This is a process where resources are allocated based on social consensus, and if investments do not generate adequate returns or if the principal is lost, it can lead to economic collapse.

A significant portion of China's total loans, amounting to approximately 60 quadrillion won, is concentrated in real estate and local government loans.

This concentration of credit creation in such inefficient assets is also a major cause of Korea's declining growth rate and business closures. Analysis suggests that a limit has been reached where the proportion of real estate and local government loans can no longer be increased.

This is a research finding presented at a parliamentary hearing for personnel appointments, emphasizing the need for debt ratio management and hinting at the possibility of policy responses from the Bank of Korea.

If the Gross Domestic Product (GDP) itself increases, the denominator of household loans grows, leading to a decrease in the overall household loan ratio.

The United States is pursuing a strategy to reduce its debt burden by increasing economic growth through large-scale investments in advanced fields such as artificial intelligence (AI) and data centers.

Elon Musk stated that AI would be the key driver of U.S. economic growth next year, predicting that technological innovation would lead economic growth.