Will Rising Oil Prices Harm AI Investment? Opportunities Amidst Risk Signals?

The supply and demand or trends of the market on the day of the simultaneous expiration of futures and options and rebalancing do not require significant attention. Geum Shigong CEO Jang Woo-jin states that the market situation on this day holds no special meaning.

He revealed that the real market competition will begin with the PPI announcement. He anticipates that the announcement of key economic indicators will be an important variable determining the future direction of the market.

These indicators are expected to act as important factors in shifting market trends.

He advised investors to check the results of these indicators and adjust their investment strategies accordingly. A cautious approach is required, observing the results rather than making hasty judgments before the indicator announcements.

Among these three conditions, oil prices surpassing $100 has already been achieved.

CEO Jang Woo-jin expects oil prices to not easily come down once they exceed $100. This is likely to act as a continuous burden on the market.

This reflects an optimistic view of the overall semiconductor market.

According to a UBS report, semiconductor prices are expected to rise by about 20% in the third quarter. The semiconductor market is currently believed to have entered a PS (price cycle) phase, not a QS (quantity cycle).

CEO Jang Woo-jin recommended that investors who dislike incurring losses should increase their cash holdings to 30-70% as a response.

Such cash holding adjustments help prepare for market uncertainties and protect assets from drastic volatility. He added that securing cash is especially important if one invests simply based on recommendations.

On the other hand, he advised that investors who can make their own judgments through sufficient market research may find a long-term investment strategy effective.

CEO Jang Woo-jin emphasized the principle that it's not too late to invest when market liquidity is abundant. He stated that there's no need to rush into investments when liquidity concerns exist, as they do now.

He also stated his position of never investing in short (short selling) or inverse products. This means avoiding direct bets on market declines and adhering to sound investment principles.

During the first war, oil prices exceeded $100 but later fell due to former President Trump's remarks.

However, CEO Jang Woo-jin pointed out that the atmosphere is different now. The situation where oil prices continue to rise despite Trump's remarks shows that the market is in a psychological state where it is difficult to easily bet on rising oil prices.

China's crude oil demand decreased by 8.9% year-on-year, but it is still insufficient to curb upward pressure on oil prices.

This suggests that the problem of insufficient crude oil inventories is a major cause of rising oil prices. Supply chain instability combined with dwindling reserves is analyzed as a factor pushing up oil prices.

This can be interpreted as the upward limit on oil prices being lifted.

He predicted that controlling oil prices would be difficult as long as the war does not end. Such an increase in oil prices is highly likely to lead to structural problems rather than being a mere short-term phenomenon.

This long-term outlook further amplifies market uncertainty.

Unlike in the past when Trump's remarks influenced oil price declines, CEO Jang Woo-jin analyzed that Trump's remarks could now become a factor prompting bets on rising oil prices. This indicates a shift in market sentiment.

Saudi Arabia's crude oil shipments have decreased from 7 million barrels before the war to 3.2 million barrels currently, the lowest level since 2013. This shows the severity of supply chain disruptions due to the war.

Restrictions on using the Suez Canal have led to changes in crude oil transport routes and increased logistics costs. Additionally, crude oil shipments through the Strait of Hormuz have also significantly decreased from 20 million barrels to 2 million barrels.

These supply chain disruptions severely impact the global crude oil market and are a major factor exacerbating upward pressure on oil prices.

This can lead to increased transportation costs across all industries, directly impacting prices.

High oil prices are expected to sustain energy cost burdens. This is anticipated to exert additional financial pressure on both households and businesses.

The rise in oil refining and shipping stocks is analyzed as a temporary phenomenon due to current issues, rather than structural improvement. CEO Jang Woo-jin recommended a strategy of selling these volatile stocks when they rise in early trading.

He explained that such stocks tend to fluctuate sharply in response to issues, making a short-term profit-taking approach advantageous. He emphasized that rises not supported by structural improvement have low sustainability, thus requiring a cautious approach.

A forecast emerged that not only the August inflation index but also the September inflation will unconditionally rise. This is based on the analysis that the impact of rising oil prices on inflation will continue.

He specifically pointed out that due to the influence of the July driving season, irregularities may appear in how oil prices are reflected in inflation.

These irregularities make the inflation outlook even more uncertain and could affect monetary policy decisions.

A general market crash due to inflation or interest rate hikes can actually be an investment opportunity. CEO Jang Woo-jin advised considering buying at low prices in such situations.

However, he emphasized that the situation is completely different when a credit crisis occurs. A credit crisis, leading to bank and loan defaults, can suddenly emerge at unexpected moments, requiring an extremely cautious approach.

CEO Jang Woo-jin warned that a credit crisis can occur at any time when interest rates are high, which can lead to loan and bank defaults. Such a credit crisis can have widespread repercussions in the market.

However, he predicted that even if a credit crisis occurs, long-term growth industries like semiconductors would be able to achieve a V-shaped rebound. Therefore, for long-term investors who are not concerned with short-term fluctuations, a strategy of holding on remains effective.

AI technologies like Meta and OpenAI are rapidly advancing, but macroeconomic variables cannot be ignored. The increase in overall token usage can be seen as a positive sign.

However, the emergence of inexpensive AI agents like Astra and Muse raises concerns about intensifying price competition. CEO Jang Woo-jin analyzed that such price competition could lead to stagnant revenue and increased costs, ultimately resulting in a 'chicken game' within the AI industry.

The prevailing opinion is that a cautious market approach is needed due to the still uncertain macro environment. CEO Jang Woo-jin recommended semiconductor investments on Monday, but now states that re-entry into semiconductor stocks can be considered depending on the CPI results.

He added that if the CPI results are lower than expected, he might re-enter the semiconductor sector, but it's not a definitive moment yet. He announced that if he becomes certain, he will express a strong investment opinion through a broadcast.