Semiconductor Stocks Decline Amid Trump Tariff Concerns

Despite NVIDIA surging over 8% in the U.S. stock market, domestic semiconductor-related stocks showed overall weakness, with Samsung Electronics and SK Hynix each falling by 3-4%. This is believed to be due to former President Donald Trump's remarks on semiconductor tariffs, which acted as a downward pressure on the domestic semiconductor sector.

Expert Baek In-yeop explained, "Trump made tariff remarks regarding semiconductors. As a result, even though NVIDIA surged more than 8% in the U.S. market, domestic semiconductor-related stocks, led by Samsung Electronics and SK Hynix, and all semiconductor materials, parts, and equipment stocks, fell across the board today." He emphasized the impact of Trump's remarks on the domestic market.

Furthermore, concerns about the Fed Chair's speech at the Jackson Hole meeting scheduled for tonight also contributed to the decline in domestic semiconductor stocks. As uncertainty grew, investors adopted a wait-and-see attitude.

These complex factors led to the simultaneous decline of leading domestic semiconductor stocks, exacerbating market instability.

Currently, there is a high 66.3% probability of the benchmark interest rate being frozen at the September FOMC (Federal Open Market Committee) meeting, suggesting that concerns about an interest rate hike within the year are not significant.

Expert Baek In-yeop stated, "The probability of a freeze at the September 16th FOMC for the current U.S. benchmark interest rate is 66.3%. So, ahead of the speech by Fed Chair Kevin O'Shea, there isn't much concern about an interest rate hike in particular." He viewed the likelihood of a rate hike as low even before the Jackson Hole meeting.

Unlike Fed Chair Powell, Fed Chair Kevin O'Shea is known for a lack of communication with the market. This could act as another variable in predicting the Fed's policy direction.

Expert Baek In-yeop commented, "Fed Chair Powell communicates with the market, but Kevin O'Shea lacks market communication. Their styles clearly differ. And I mentioned he didn't provide a dot plot at the June FOMC." He explained the impact of differences in internal Fed communication styles on the market.

With semiconductor stocks recently failing to gain upward momentum, a technical rebound is analyzed as highly probable. This is seen as a reaction to excessive downward pressure in the market.

Expert Baek In-yeop said, "Because it couldn't bounce when it should have, I think there's a high probability of semiconductor stocks rising on Monday." He predicted a rise in semiconductor stocks on Monday.

However, he assessed that while the situation could change if Fed Chair Powell makes hawkish remarks at the Jackson Hole meeting, the likelihood of that is very low. Baek In-yeop added, "Of course, if Fed Chair Powell makes very hawkish remarks at the Jackson Hole meeting, that's a different story, but I see that possibility as only about 0.01%."

Concentrated investment in the semiconductor sector may be risky given the current market conditions, and it is important to recognize that market rotation is spreading. Therefore, holding 100% of one's portfolio in semiconductor stocks is not advisable.

Expert Baek In-yeop emphasized, "Don't rely solely on Samsung Electronics and SK Hynix; you need to quickly identify and preempt stocks with individual momentum to revive your portfolio." He highlighted the importance of selecting and preempting stocks with individual upward momentum.

As the market increasingly moves around individual theme stocks, investors need to diversify their portfolios instead of concentrating on a single sector. This can be a strategy to prepare for market volatility and pursue stable returns.

Therefore, appropriately adjusting the weighting of semiconductor stocks and discovering individual stocks with growth potential in various industries is presented as an effective strategy for the current market situation.

Within the semiconductor and materials/parts sectors, it is worth looking at stocks with accompanying trading volume as potential buying candidates. This reflects market interest and indicates a high possibility of future upward potential.

Expert Baek In-yeop advised, "You should also consider these stocks as candidates for Samsung Electronics and SK Hynix. Sungkwang Bend, Taekwang have already risen quite a bit this week, so if they dip next week, you might want to keep an eye on them." He cited stocks like Taekwang and Sungkwang Bend as examples. He added that since these stocks have already shown an upward trend this week, they might be worth considering if their prices adjust next week.

Among nuclear power-related stocks, it was proposed to build a portfolio focusing on four key areas: construction, main equipment, materials and parts, and maintenance. Hyundai E&C, Samsung C&T, and Samsung Engineering were cited as major stocks in the construction sector, while Doosan Enerbility was prominent in the main equipment sector.

In the materials and parts sector, BHI and G2Power were suggested, and in maintenance, KEPCO KPS, Iljin Power, Suseong Industry, and KEPCO KPS were identified as promising stocks. Expert Baek In-yeop specifically mentioned that stocks like KEPCO KPS, Suseong Industry, and Iljin Power, even if they currently lack significant trading volume, could be good long-term investment alternatives, similar to a savings plan.

He also clarified that Woojin and Woojin ENTEC are subsidiary companies, implying that these stocks could also be noteworthy investment opportunities with the growth of the nuclear power industry.

The primary reason L&F was chosen as the leading stock in the secondary battery sector is its LFP (lithium iron phosphate) battery technology. LFP batteries are widely used in energy storage systems (ESS), and their market potential is significantly increasing due to the expanding demand for ESS in data centers.

Expert Baek In-yeop explained, "The reason L&F is the leader is clear: LFP batteries. These are widely used in energy storage systems. And this time, Trump declared a national emergency for the power grid, and LFP batteries were included in that." He emphasized the importance of LFP batteries.

In particular, with former President Trump's declaration of a national emergency for the power grid, Chinese companies' entry into the U.S. market is virtually impossible, which is expected to benefit domestic companies. This will be a crucial factor enabling domestic battery manufacturers, including L&F, to receive significant benefits in the U.S. market.

Despite recent positive news, such as complete response results from ABL Bio's combination therapy clinical data, the overall stock performance of the biotech sector has been weak. This is attributed to a general lack of demand within the biotech sector.

Expert Baek In-yeop commented, "Even the company thinks that the biotech industry's demand is so bad these days that even with technology transfers, it doesn't properly reflect in the stock price, so even good data didn't reflect as much as expected." He explained the phenomenon of good news not being properly reflected in stock prices.

Currently, the biotech sector itself is too weak, leading to a situation where good individual company materials are not being properly valued in the market. The diagnosis is that until demand recovers, stock price increases may be limited despite good clinical results or technology transfer news.