Foreigners Sell 4 Trillion Won, KOSPI Plunges 3.26%

The combination of these two issues served as the fundamental reason for today's market decline. Kim Jang-yeol, expert, stated, "Considering the combination of those two, we'll have to see the U.S. market to determine if today is the beginning of a seriously bad trend or just temporary noise." He emphasized the need to monitor the future trends of the U.S. market.

The memory sector is already in a poor sentiment, making it relatively less important. Kim Jang-yeol, expert, mentioned, "Memory is relatively less important. Memory sentiment is bad anyway, so we need to see until we confirm stock prices whether this is short-term noise or will spread widely." He explained that the true market concern is the impact of AI development speed on actual corporate momentum. The market is currently closely watching whether the AI development speed adjustment theory will remain short-term noise or have a larger ripple effect.

As rising oil prices, AI development speed adjustment talks, and interest rate hike issues erupted simultaneously, the market reacted immediately and simplistically, like an elementary school student. Lee Kwon-hee, expert, commented, "It's fair to say that the interest rate issue was already more than 80% reflected, and as of today, our market is also reflecting the possibility of an interest rate hike. So, given that three negative factors were reflected simultaneously, a 3% decline seems about right, in my personal opinion." Semiconductor-related issues are not expected to be sustained, and analyses suggest that this market overreaction is likely temporary.

The fundamental reason for discussing AI development speed adjustment is that technological development is progressing too fast, beyond human control. Kim Jang-yeol, expert, explained, "It means AI development is going too well. AI performance development is too good. Progress toward AGI is too good. Because it's too fast, human control is becoming clearly difficult, and that's why the issue that might have been relatively overlooked is now visible." The fear brought about by the improvement in AGI (Artificial General Intelligence) and agent AI performance is not mere noise but an paradoxical concern about technological achievement. This can be seen as reflecting global concerns about the potential risks technology development could pose to humanity.

The discussion on adjusting AI development speed does not negate the goal of AI performance improvement itself. Lee Kwon-hee, expert, stated, "You need to increase performance from 200 km to 300 km. It came quickly up to 200 km, but if you cross a certain threshold, something unexpected might happen. So the idea is to put on the brakes from here, but I shouldn't be the only one, and you shouldn't be the only one." He interpreted this as a warning about potential risks that could arise when breaking through development thresholds. Therefore, the perception is spreading that it is important to establish joint control mechanisms through international discussions, rather than individual countries independently applying brakes.

China views these Western claims as a strategy to kick away the ladder of technological development and maintains a wary stance.

Subtle changes in investment sentiment have recently been detected. Lee Kwon-hee, expert, explained, "Is investment sentiment recovering somewhat?... Looking at defense stocks, some cosmetic stocks, and financial stocks... these sectors received positive news today... In the past, this would have been ignored. But the fact that these are now reacting, I see it positively." He analyzed that cosmetic and food stocks, which experienced excessive declines due to the strong won, are showing signs of rebound. Also, defense and financial stocks are showing strength, indicating a sector rotation. In particular, the news of Samsung Heavy Industries' large-scale order sparked a positive reaction in the market.

Kim Jang-yeol, expert, explained, "Today... there's a market called HyperLiquid. It's where you trade cryptocurrencies, futures, and derivatives, but Hynix is also traded there. Hynix fell by 4%... On the other hand, Nvidia also has this 'pop,' and it's down about 2%. This is naturally going in the sensitive direction, against money leverage." He stated that Hynix fell by over 4% in this market. Nvidia also recorded a 2% decline, indicating that internal market psychological pressure played a significant role. Investors plan to gauge the market's direction by monitoring upcoming events such as the AI Infrastructure Summit.

Kim Jang-yeol, expert, explained, "Since there are so many other things, that probably didn't have much of an impact... Memory will continue to strive to use less... Efficiency is something you do when you reach a point where you absolutely must be efficient." He emphasized that this is a technological development pattern already anticipated by the market. In other words, memory efficiency is an inevitable process, and its negative impact on the market is expected to be limited.

Rather than short-term stock price responses, Micron's earnings announcement is expected to be a crucial turning point for determining market direction. Kim Jang-yeol, expert, mentioned, "There's time until Micron's earnings come out. It's more than half a month from now until Micron's earnings are announced. ... The CEO and those people will ask detailed questions. If the answers are ambiguous, then the downtrend needs to be adjusted upwards." He emphasized the need to reconfirm AI infrastructure demand through Micron CEO's answers. Micron's earnings and management's remarks will be important indicators for gauging the future growth of the AI market and the timing of the semiconductor industry's recovery. The market is currently watching Micron's earnings announcement, which is more than half a month away.

The stock price of a drama production company recently surged, but the background remains unclear. Lee Kwon-hee, expert, explained, "I understand this company is involved in drama production and OTT, and it seems to have gone up due to individual issues." He mentioned that the company produces drama and OTT-related content and has competitive writers. However, the company is currently in the red, and no clear public disclosure or positive news has been announced to justify a limit-up, suggesting it's likely a temporary phenomenon due to individual issues.

This means foreign investors reduced their selling positions and partially switched to buying, which could act as a positive factor for tomorrow's market.

This seems to have negatively impacted stock prices as expectations for nuclear power project orders turned into uncertainty.

As the quote "Of the eight units, six are American type, and two are Korean type, that's what the market originally expected. If all eight are American type, then it's a disappointment" indicates, the market hopes that two of the eight units will be Korean-type nuclear power plants. However, if all eight are decided to be American-type, a decline in stock prices for related companies like KEPCO E&C is expected to be unavoidable. Since this information has not been clearly confirmed, related stocks are showing unstable movements as they engage in a waiting game.

As the statement "Even if interest rates are raised, will it not burden the economy? The market seems to have interpreted that the economy, maintaining a 'Goldilocks' growth, will endure it" suggests, the market interprets that the economy will maintain a Goldilocks situation and withstand interest rate hikes. The market is now in a mood to accept interest rate levels as the 'new normal'.

In the past, a dichotomous view of hikes as negative and freezes as positive dominated. Now, hikes themselves are not seen as bad; if economic indicators (employment, PPI) support them, hikes are accepted as a normal reaction. As the comment "They must raise it now. If they don't raise interest rates, the market would have moved by taking the hike as a given. There's no need to be overly sensitive about interest rates; what's important now is the number of hikes" suggests, the number of rate hikes is now a more crucial variable. Indeed, the U.S. market rebounded after reflecting the possibility of interest rate hikes, indicating that the market is adapting to the new interest rate environment.