New York Stocks Rise on PPI Slowdown and Falling Oil Prices… AI Semiconductor Strength Continues

On August 14, as the New York stock market generally rose, the Producer Price Index (PPI) met expectations, partially alleviating inflation risks. While the prevailing market view is that interest rate cuts are unlikely this year, expectations have grown that the Federal Open Market Committee (FOMC) will not implement an interest rate hike in September.

This strategy is interpreted as supplying memory optimized for specific big tech companies. Micron expects that after HBM4E, memory will only be supplied by one or two sources, describing this as the 'non-memory transformation of memory.' They added that this is because self-design will vary according to the requirements of each big tech company. This is expected to bring significant changes to the HBM market's supply chain. Currently, the HBM market is dominated by a few companies, and these changes are likely to affect the competitive landscape. In particular, the approach of developing customized products through close collaboration with specific big tech companies is expected to present a new paradigm different from the past general-purpose memory market. This will ultimately have a major impact on the technology development direction and market strategy of the memory semiconductor industry.

This information uncertainty suggests that caution should be exercised in related investment decisions.

Analysis suggests that when oil prices rise, Trump's approval ratings fall, and conversely, when oil prices fall, his approval ratings rise. Accordingly, the Trump administration is expected to continue efforts to lower oil prices if it returns to power.

This enormous sales volume, close to the population of Daejeon Metropolitan City, demonstrates the market's enthusiastic response. This record is expected to reaffirm the popularity of the Galaxy Fold series.

Currently, Nvidia appears to be driving strength in the artificial intelligence (AI) sector, preparing to set new highs. Anticipation for upcoming earnings announcements is acting as a driving force for the market's rally. However, despite Nasdaq tech stocks hitting new highs and futures indices rising strongly, other big tech companies' stock prices have either stagnated after a sharp rise or fallen more sharply than expected. This is analyzed as Nvidia single-handedly leading the market, with only other chip-related stocks following suit. Technical analysis confirms that there are significant differences in sector movements within the US market, and even within the same AI sector, differentiated trends are appearing among individual stocks.

Amid attention on the movements of global oil refining companies, controversy has erupted regarding the destruction of Russian oil refineries. While discussions are underway to import Indian crude oil after the destruction of Russian oil facilities, news broke that the US Vice President requested Ukraine not to destroy Russian oil facilities with drones. This is analyzed as a concern for US inflation due to rising oil prices. As international affairs increasingly influence oil price volatility, continuous observation of trends in oil-related companies is necessary.

This is largely interpreted as a measure targeting China. In contrast, allied nations such as South Korea, Japan, and the European Union (EU) are expected to face a tariff rate of around 15%. Such measures are likely to significantly impact the drone industry, potentially creating new opportunities for drone component companies outside of China. This is interpreted as an intention to pressure specific countries and protect domestic and allied industries, similar to past trade policies.

After CEO Kim expressed strong confidence in the semiconductor market last Wednesday, even using the term 'entering the fray,' these stocks fortunately surged and continued their upward trend until yesterday. CEO Kim explained that he detected positive market signals on Tuesday when semiconductor stocks rose alone by about 4% without any particular issue. He added that Samsung Electronics' valuation was around 4x and SK Hynix's was 3.9x at the time. This undervaluation appeal and market signals appear to have been important factors in CEO Kim's investment decision. In particular, the term 'entering the fray' expressed a strong buying intention, offering a glimpse into his investment philosophy.

The Producer Price Index (PPI), announced yesterday before the US stock market opened, met expectations, alleviating some market concerns about inflation, following the Consumer Price Index (CPI) report the previous day. It even showed a slight decrease compared to market forecasts. However, despite the positive inflation data, the reaction of the 10-year long-term Treasury yield was minimal. After a brief decline following the CPI release, the yield's drop was small, and it subsequently rebounded slightly. With Treasury yields not reacting sensitively despite better-than-expected inflation data, market uncertainty is analyzed to persist.

Just a month ago, the possibility of even one interest rate hike was over 70%, but it has now plummeted to around 30%. This demonstrates a complete reversal in market expectations regarding interest rate hikes. The main reason is analyzed to be the moderation of inflation concerns as the Consumer Price Index (CPI) and Producer Price Index (PPI) met or slightly undershot expectations. These changes are likely to influence the Federal Reserve's (Fed) monetary policy direction, with market participants now placing a high probability on an interest rate freeze at the September Federal Open Market Committee (FOMC). The sharp drop in the likelihood of rate hikes could positively impact risk assets such as the stock market. Conversely, expectations of a loosening of the past aggressive tightening stance could increase bond market volatility. Overall, reduced interest rate hike burdens could serve as a positive signal for economic activity and corporate investment.

It is reported that most suppliers submitted plans containing their unique robot technologies and mass production blueprints in the first half of this year. This is interpreted as Hyundai Motor concretizing its robot business, showing its intention not just to invest, but to actually build a production and supply chain. Hyundai Motor's move appears to be part of its strategy to accelerate its transformation into a future mobility solutions company. Particularly in the humanoid robot sector, which is still in its early stages, the intention seems to be to secure technological competitiveness and preempt the market through close collaboration with suppliers. Amid changes in the automotive industry and the expected growth of the robot industry, Hyundai Motor's actions are expected to have a significant impact on the entire related ecosystem. Furthermore, for parts companies, this could be an opportunity to secure new growth engines beyond their existing businesses.

This proposal includes a plan to prioritize cutting off electricity supply to data centers that fail to procure power autonomously during emergencies, starting in June 2027. This is interpreted as a measure to ensure power grid stability and cope with the surging power demand from data centers. If this regulation is implemented, data center operating companies will have to significantly change their power procurement methods, such as building their own power generation facilities or adopting energy storage systems (ESS). Failure to comply could lead to massive financial losses and service disruptions during emergencies. Therefore, PJM's move is expected to have a significant impact across the data center industry, and related companies urgently need to prepare countermeasures. The adoption of eco-friendly power solutions, such as improving power efficiency and expanding the use of renewable energy, may also accelerate.

Since the Democratic party has traditionally supported renewable energy policies, it is anticipated that support for related industries will expand with a change in administration. This is expected to have a positive impact on renewable energy companies, such as those in solar and wind power.

This, along with a positive Consumer Price Index (CPI) report, was a major factor in raising the probability of an interest rate freeze at the upcoming September Federal Open Market Committee (FOMC) to approximately 70%. Experts analyze that with inflation data appearing more stable than expected, the Federal Reserve (Fed) will face less pressure to raise interest rates. These changes are expected to positively impact risk assets such as the stock market, and investors are paying closer attention to the direction of interest rate policy. In particular, if signs of easing inflationary pressure continue, expectations for a shift in the Fed's monetary policy stance could grow further. This could also affect the overall economic environment, potentially leading to a recovery in corporate investment sentiment. However, uncertainties regarding external variables like oil prices still remain, requiring a cautious approach.

An analysis suggests that a change in investment strategy is needed as the index recently moved above the 20-day moving average. While a defensive strategy of increasing cash holdings to 40-60% is adopted when short-term moving averages are in a reverse arrangement, a more aggressive buying and increased investment weighting strategy is now effective as short-term moving averages are transitioning to a positive arrangement. This is interpreted as an approach to maximize returns by utilizing the market's short-term rebound. However, this does not apply equally to all market situations, so investors should make careful judgments considering individual stock fundamentals and additional market indicators. It is important to flexibly respond to market trends, and further observation is needed to determine if a short-term trend reversal will lead to a long-term ascent. Especially during volatile periods, risk management is even more crucial, so a strategy of waiting for pullbacks rather than indiscriminate chase buying is also worth considering.

The perspective is that if the US restricts the use of Chinese polysilicon to modules, companies like Hanwha Solutions and OCI Holdings could gain indirect benefits. However, in the case of Hanwha Solutions, there is a significant selling pressure, suggesting a potential adjustment period, and it is advisable to observe and follow up before approaching the investment. It was advised that since the downtrend has been broken, it is desirable to invest after observing a pullback around the 433,000 won level and then a rebound.

In essence, it is the capital a company can return to shareholders after excluding investments for growth. CEO Lee pointed out that some journalists occasionally confuse these two terms, stressing the importance of accurate conceptual understanding. Clearly knowing the difference between these two concepts is crucial when evaluating a company's financial health and making investment decisions. Especially regarding shareholder return policies, it is important to accurately grasp the concept of excess free cash flow. Since the item 'what is needed for growth' can vary based on a company's subjective judgment, investors need to meticulously examine the company's accounting standards and public disclosures.

Compared to the current stock price of 57,700 won, the upside potential is limited. The operating profit falling below consensus was cited as a reason for difficulty in raising the target price. The company explained that the earnings reflection was postponed to the next quarter, but the unsatisfactory performance, including the ESS (Energy Storage System) business turning to a deficit, remains a disappointment. Nevertheless, several businesses, such as fuel cells and wind power projects, are proceeding smoothly, and expectations for the completion of the major shareholder change and solar power development projects still exist. The fact that SK Eternix is pursuing all profitable businesses including wind, solar, and fuel cells is positively evaluated, but short-term earnings sluggishness could be a limiting factor for stock price appreciation. Therefore, investors should approach carefully, considering both long-term growth potential and short-term earnings sluggishness. In particular, it is important to identify whether the cause of the earnings sluggishness is temporary or a structural problem.

Experts predict that the cosmetics industry will face difficulties in improving performance for some time, and stock prices may be somewhat suppressed until monthly export data is confirmed. This is interpreted as a combined result of short-term stock price fatigue and lack of earnings momentum. Therefore, investors who invested in cosmetics stocks early might consider realizing profits and moving funds to other growth-oriented sectors. It is advised to pay attention to market rotation trends and turn to industries with expected earnings improvements or policy beneficiaries. The cosmetics industry is highly sensitive to external variables such as China's economic recovery and sanitary product consumption trends, so related indicators should be continuously monitored to adjust investment timing. Even when approaching from a long-term perspective, it is good to utilize short-term correction periods.

Notably, Doosan Enerbility showed strong performance, rising 4% on the news of Bill Gates' visit. However, as news spread that Bill Gates is scheduled to meet with HD Hyundai Group and Hyundai Heavy Industries officials rather than Doosan Group, attention is gathering on the actual beneficiary companies.

This will reaffirm Hyundai Motor's commitment to accelerating its transformation into a future mobility solutions company and making robot technology a key growth engine.

The prevailing market opinion is that it is not yet time to consider reducing holdings. Experts advise that investors should only consider increasing selling proportions when the stock index surpasses 7,000 points and firmly settles above 7,050 points. Although the market is showing a short-term rebound, it is too early to conclude that it has entered a full-fledged upward trend. This suggests that instead of reacting to short-term market movements, it is wise to confirm a definitive breakthrough of important resistance levels before adjusting investment strategies. Investors should cautiously approach the market by observing its trends rather than making hasty sales. In particular, understanding the meaning of key support and resistance levels and establishing one's own investment principles based on them is crucial. In uncertain market situations, maintaining a certain level of cash holdings and waiting for opportunities can also be a good strategy.

He added that if it breaks above 550,000 won based on today's closing price, further trend-based gains can be expected. This means that although Hyundai Mobis has shown signs of a recent rebound after a long period of sluggish performance, it needs to surpass past resistance levels to enter a full-fledged uptrend. Therefore, investors should pay attention to whether the 550,000 won level is broken through when formulating future investment strategies. This point is not just a number but can also act as a psychological resistance level. It is important to also consider whether it is accompanied by trading volume to judge the reliability of the breakthrough. If it fails to break through, there is a possibility that a short-term correction could continue. Therefore, a cautious approach based on technical analysis is required.

Previously, AI chips within AI data centers were considered consumables whose value rapidly depreciated after 4-5 years. However, this perception is changing recently. With the counter-argument that AI chips can be used sufficiently for 7-9 years or more if optimized for connectivity and effectively utilized for inference, AI computing assets are beginning to be recognized as long-term assets rather than consumables. This shift in perception holds significant meaning across the entire AI industry. Companies can view the return on investment for AI infrastructure construction over a longer period and pursue AI technology adoption from a more long-term perspective. This is expected to have a positive impact on the AI chip and related hardware market, providing a basis for companies to make more aggressive investments. Furthermore, as AI technology rapidly advances and its application scope expands, the re-evaluation of AI computing's value and lifespan will continue. This change in perception can be an important factor in enhancing the economic feasibility of AI technology adoption.

This demonstrates the government's strong commitment to fostering the robot market, aiming to stimulate initial demand and promote the growth of related industries. Large-scale public procurement is expected to accelerate robot technology development and commercialization, providing a stable demand base for companies to invest. The government's proactive efforts to create this market are projected to strengthen the domestic robot industry ecosystem and secure global competitiveness. Humanoid and quadrupedal robots, in particular, are gaining attention as core drivers of future industries, and the government's large-scale purchase will significantly contribute to the technological advancement and market expansion in these fields. This can also offer new business opportunities for related companies and promote the diverse industrial application of robot technology. Consistent government support and investment are considered essential for leapfrogging into a robot powerhouse.