September Stock Market Sees Simultaneous Decline Due to Three Major Headwinds

On September 2nd, the domestic stock market attempted to rebound early in the session but shifted to a downturn after news of former President Trump's hardline statements. Trump's posting on social media, making tough remarks about escalating war and not giving up, was a primary cause. This re-escalated market concerns about war.

International oil prices are approaching the $100 mark, with WTI surpassing $90 and Brent crude surpassing $95. The threat in the Strait of Hormuz has re-emerged, increasing upward pressure on oil prices. Analysis suggests that if oil prices break $100, inflation concerns will deepen, potentially causing a significant shock to global financial markets.

Recently, Iran attacked two tankers with their AIS (Automatic Identification System) turned off, materializing geopolitical risks in the Strait of Hormuz. Vessels with AIS off have generally been known to intend to evade identification. In the past, there was less threat to vessels with AIS off passing through the strait, but now that even identification-evading vessels are confirmed targets, vigilance regarding passage through the strait is maximized.

The dollar index has risen to 99.7, on the verge of breaking 100. If the dollar index surpasses 100, the trend of global assets returning to the U.S. dollar is expected to accelerate further. This could lead to an additional sharp decline in non-U.S. assets, including emerging market stocks, requiring investor caution.

In the current market, whether the KOSDAQ index holds the 6,500 line has emerged as a critical turning point. A warning was issued that if the 6,500 line is broken, a larger-than-expected decline could occur. As the risk of a death cross is also raised in technical analysis, the opinion was presented that market exposure should be reduced.

While the Ukraine war issue was already somewhat priced into the market, former President Trump's recent hardline remarks elicited a larger-than-expected market reaction. Analysis suggests a paradoxical situation where Trump's uncompromising stance is criticized by the media, yet it makes him adhere to an even harder line. This acts as a factor increasing market uncertainty.

On September 2nd, the market's trading volume contracted to 18.5 trillion won, falling below 20 trillion won. It was confirmed that there was no buying support during the sharp decline, which is interpreted as a sign of deteriorating overall market confidence. The weakening of individual investors' desire for bargain hunting is particularly concerning, and it is expected that this downtrend will continue until the next day.

Due to the rebound over the past two days, individual investors developed a 'buy and profit' learned behavior. As a result, many individual investors engaged in bargain hunting from the start of the session, but the day's decline immediately resulted in losses. When this psychology is strong and a market correction occurs, individual investors can get stuck and face difficulties in the market, leading to weakened market supply and demand, breaking the pattern of a strong close after a weak opening.

The current market is showing a downward trend along the 40-day moving average. While the low point is somewhat maintained, the high point continues to decrease, creating a downward trend that burdens the overall market. From a technical analyst's perspective, this trend could lead to additional selling pressure. Therefore, investors should remain vigilant about these changes in technical indicators.

Despite positive news such as Alteogen's bonus issue and successful clinical trials, the stock price did not react significantly. Analysis suggests that there is insufficient liquidity in the market, lacking the power to drive up stock prices even with good news. The concurrent selling by foreign and institutional investors further exacerbated the supply-demand situation, also cited as a factor limiting the market's response. Overall market illiquidity appears to be neutralizing positive news.

Despite Doosan Fuel Cell's announcement of a fuel cell supply contract, its stock price actually fell by over 10%. This is interpreted as the information about data center-based orders having already been somewhat pre-reflected in the market. The current market is assessed as being too weak to reflect good news and achieve further gains. The phenomenon of stock prices falling despite positive news demonstrates the current market's fragility.

The shortening of new car delivery wait times to less than a month is interpreted as strong evidence of a significant decline in demand in the automotive market. The global automotive market itself is entering a recession, and as a result, Hyundai Motor's valuation remains stagnant. A significant upward trend for Hyundai Motor is expected after June next year, when autonomous driving data accumulation becomes visible. Currently, clear signs of recovery in the automotive industry are hard to find.

A sharp decline in camping demand is identified as one of the major causes of the slump in the domestic automotive market. Sales of SUV vehicles, which were popular during the COVID-19 pandemic, are slowing, and there is a shift towards passenger car consumption. The closure of campsites and the contraction of related industries also support the downturn in the camping market.

The stock prices of major retailers such as Shinsegae, Hyundai Department Store, and Lotte Shopping plummeted. This is interpreted as a reverse 'wealth effect,' where a weak stock market negatively impacts consumer sentiment. The decline in investment asset values leads to reduced consumer spending, negatively affecting the real economy as well.

The National Intelligence Service reported signs of contact between the U.S. and North Korea, leading to a surge in inter-Korean economic cooperation stocks. However, experts view the possibility of substantive North Korea-U.S. dialogue occurring before the U.S. midterm elections as low. Particularly, given the improved economic situation within North Korea compared to the past, analysis suggests that North Korea has little incentive to engage in early negotiations.

In the current market situation, a strategy of maintaining a significant cash position is important. Rather than excessively increasing stock holdings, it is advisable to employ short-term guerrilla tactics or wait until a clear rebound signal appears. A cautious approach to market trends is needed, rather than rashly chasing purchases.