Even the best-performing stocks collapsed

While the U.S. market volatility index (VIX) and bond MOVE index showed stability, the domestic stock market is experiencing a combination of short-term adjustments in semiconductor materials, parts, and equipment stocks and worsening ETF supply and demand.

Global investors' perception of the memory cycle as a past pattern leads to relative weakness despite improved stock performance.

Due to global investors' view of the memory semiconductor cycle as a past pattern, the domestic stock market, with its high memory proportion, shows a relatively vulnerable trend.

These companies, with a high proportion of mobile business, suffered from worsening supply and demand due to additional ETF basket selling.

Noise related to OpenAI's revenue recognition also contributed to increasing volatility in the AI hardware market.

This is a reversal from when SK Hynix was strong and a short position was taken on Lumentum, leaving domestic memory stocks with the challenge of proving new momentum.

Unlike the past when Lumentum short positions were taken during SK Hynix's strength, the recent market has reconfigured positions with Lumentum long and memory short.

Domestic memory stocks face the challenge of proving new momentum beyond existing demand.

Within the global market, funds are actively moving within the AI hardware sector based on stock preferences.

The defense of the 6,400 line since early July and the realization of multiple reratings by global investors are crucial for a technical rebound.

Despite EPS growth, the maintenance of the 6,400 line since early July remains a variable, and global investors' multiple rerating is a key factor determining market direction.

Regardless of the continuation of the AI cycle, a polarization of funds is observed, with money flowing into stocks making new highs and those testing lows.

Stocks at new highs, such as Palantir, Datadog, and Snowflake, possess AI application technologies, indicating that the market's evaluation criteria have shifted from hardware infrastructure to application platforms.

Investors must closely monitor the movement of funds within the AI cycle and respond agilely to changes in beneficiary sectors.

Therefore, if studying individual stocks is burdensome, investing a small amount in related sector ETFs can be an alternative.

Unlike KOSPI, KOSDAQ's supply and demand leadership is held by institutions rather than foreigners, so individual investors may be at a disadvantage when institutions engage in trend-following selling, making supply and demand observation crucial.

Therefore, it was advised that investment in parts, materials, and equipment stocks should fundamentally be approached as a trading area, and a cautious approach is necessary unless one is confident of having a superior information advantage over institutional managers.

A conservative approach is necessary unless there is a new high trend within the global sector, and ASML's earnings announcement this week and confidence in equipment orders for 2028 are expected to be key variables.

However, the market has already factored this into interest rates, so the impact on the stock market is assessed to be limited.

While core inflation is predicted to meet expectations, the diagnosis continues that domestic and international markets will still find it difficult to escape the influence of interest rates.

These companies recorded new highs based on confirmed cloud profitability and expectations of a cash flow turnaround by 2028, indicating that AI funds are spreading from hardware-centric to application areas.

AI investment, which was previously confined to hardware, is now shifting to application areas. Despite the stock price increase, valuations have actually decreased, forming reasonable price levels, according to analysis.

This is due to the market's tendency to perceive memory as a cyclical industry and M7 as next-generation growth stocks, expressing regret over the undervaluation of domestic memory companies relative to their performance.

ASML and TSMC's earnings announcements this week are expected to have a significant impact on the semiconductor and parts, materials, and equipment sectors, and it is necessary to check CAPEX trends through big tech companies' earnings announcements at the end of October.

It was advised that since stock reactions might be sluggish compared to guidance, it is important to analyze and respond to the market based on clear facts rather than overly optimistic expectations.

When investing in U.S. stocks, situations arise where stock profits are offset by foreign exchange losses due to exchange rate effects.

Despite exchange rate risks, momentum remains concentrated in specific U.S. market stocks, necessitating continued investment. It was emphasized that the AI investment trend is rapidly changing, so proactive response through learning is crucial.