Domestic Stock Market: Small/Mid-Cap Stocks Strong Amid Large-Cap Weakness

Operating profit estimates are being lowered due to factors such as one-time expenses. As a result, market expectations are now lower than before.

Some even say that lower expectations are a good thing. As Samsung Electronics' preliminary earnings announcement approaches, a strong wait-and-see attitude prevails across the market.

With increased geopolitical uncertainties, such as rising bond yields and war risks, the momentum for passive funds to flow into large-cap stocks has vanished. Currently, the biggest reason for the sluggishness in our stock market is the strong dollar.

Increased geopolitical uncertainties, including rising bond yields and war risks, have severely dampened investor sentiment.

Investors who invested in large-cap stocks with a high proportion of semiconductors are experiencing a frustrating market situation.

Increased geopolitical uncertainties, such as rising bond yields and war risks, have severely dampened investor sentiment. In contrast, KOSDAQ and small/mid-cap stocks continue their favorable trend, and investors utilizing quick rotations have shown notable performance.

Even as the Philadelphia Semiconductor Index rose, memory semiconductors declined for three consecutive days.

This appears to be because market participants still suspect memory semiconductors are a cyclical industry.

Concerns about supply-demand factors, where large-scale expansion could lead to future oversupply, are also reflected.

The market analyzed that the strength of French government bonds led to a decline in US government bond yields, and pointed out that a drop in interest rates does not directly translate into a boost for the stock market. Although this ripple effect caused US government bond yields to fall, experts noted that a drop in interest rates does not immediately translate into a boost for the stock market.

While this decline in French government bond yields is believed to have influenced the drop in US government bond yields, a fall in bond yields does not always act as a positive for the stock market.

If bond yields stabilize moderately, an relief rally in the stock market is possible.

However, if yields sharply reverse to a downtrend, a situation may arise where stocks must be sold to raise funds for bond short-covering, acting as a negative for the stock market.

If bond yields stabilize moderately, the stock market is likely to see an relief rally. Currently, it has entered an adjustment phase to secure momentum. For foreign investor demand to recover during this current adjustment phase, which is paying the price for the first half's surge, a downward stabilization of the dollar index is essential.

This is a period that requires a time-consuming process of digesting selling pressure and re-securing new momentum, and a downward stabilization of the dollar index is essential for the inflow of foreign investor demand.

In particular, LG Electronics and LG Innotek are showing relative strength and acting as new market leaders.

Investors should be wary of chasing purchases based on already known positive news. Considering the possibility that expectations of capital inflow due to KOSDAQ rebalancing have already been priced into the market, meticulous management covering both large and small-cap stocks is required.

Therefore, chasing purchases based on already reflected positive news should be approached with caution, and market management is needed for both large-cap and small-cap stocks.

Samsung Electronics' preliminary earnings announcement is not expected to have a significant impact due to low market expectations.

Beyond a simple earnings announcement, clear mid- to long-term guidelines regarding next year's sales, profits, costs, and shareholder return policies are required.

Presenting specific AI revenue targets, similar to Marvell's Investor Day, could positively impact stock prices.

Investors hope that clear vision from companies will resolve uncertainties and improve investment sentiment.

This reflects extremely fragile market sentiment, and analysis suggests that investment needs to focus on individual stocks driven by earnings rather than the index itself.

If the Democratic Party secures a majority in the House, there is a possibility that the IRA clean energy tax credit, which was reduced under the Trump administration, could be restored. Streamlining permit procedures and expanding investment in transmission networks and ESS are also included in the Democratic Party's key pledges.

Such policies are expected to positively impact EV policy and emphasize expanded investment in power grids and ESS (Energy Storage Systems).

Global companies such as Intel and Nvidia are also collaborating to adopt this technology.

Glass substrates are gaining attention as next-generation technology due to their superior strength and heat treatment performance compared to existing semiconductor substrates.

The combination of Samsung SDI's cell mass production technology and EcoPro BM's material competitiveness is expected to create synergy in the EV market.

The synergy effects in the EV market are anticipated from the combination of Samsung SDI's all-solid-state battery cell mass production technology and EcoPro BM's material technology.

This phenomenon suggests that cosmetic stocks have lost upward momentum and entered a period of weakening trend strength, with a warning that difficult conditions may persist if they cannot reverse course.

The visit is to personally confirm the ongoing loading operations of submarine cables at the site.