New York's 3 Major Indices Rebound Despite Rising Treasury Yields… Bitcoin Continues Strong Rally

Last Friday, in the New York stock market, the Dow Jones Industrial Average rose by 1%, while the Nasdaq increased by 0.4% and the Russell 2000 by 0.8%. In the semiconductor sector, major semiconductor companies such as Micron, Western Digital, and Intel saw their stock prices fall. In contrast, some tech stocks like Palantir, Oracle, and Tesla showed strength, indicating varying performances across sectors.

This phenomenon suggests that despite the overall market increase, investor sentiment varied depending on the performance and expectations of specific industries and individual companies.

The U.S. 10-year Treasury yield has risen to 4.74%, testing higher levels. This is seen as an indication that market stabilization policies, such as buybacks, have limited effectiveness.

If Treasury yields continue to rise, there is a market burden that it will be difficult to implement additional market stabilization measures at this time. This situation is rekindling concerns about future interest rate hikes.

The market is currently focusing on the possibility of prolonged high interest rates and is closely watching the Federal Reserve's monetary policy direction.

Rising Treasury yields can lead to increased borrowing costs for companies, resulting in reduced investment and slower economic growth.

This highlights the market's strong interest in the AI industry.

However, Anthropic faces political pressure due to negative public opinion regarding data centers and power shortages. The rapid growth of the AI industry demands massive power consumption, leading to environmental and infrastructure issues.

Furthermore, competitor OpenAI is aggressively lowering token prices, which could impact Anthropic's market position and profitability. This competitive landscape demonstrates the dynamism of the AI market.

Anthropic faces the challenge of pursuing a successful IPO amidst these external pressures and competitive environment. The achievement of a $2 trillion valuation and large-scale fundraising target will be an important indicator for the direction of the AI market.

Notable changes have been observed in former President Donald Trump's portfolio, disclosed in June. He reportedly increased his holdings in financial stocks by purchasing Berkshire Hathaway shares. Conversely, he reduced his exposure to tech stocks by selling Meta shares.

Specifically, a pattern of frequent trading in Nvidia shares was identified. This suggests an investment strategy that is sensitive to short-term market changes for specific stocks.

Trump's portfolio changes can be interpreted as an interesting indicator, offering insights into his economic policy direction as a presidential candidate and his personal investment tendencies.

However, he stated that shareholder returns alone might not be enough to fully boost Samsung Electronics' market value.

He specifically pointed out that in an industry with high performance volatility like semiconductors, stock price increases relying solely on dividends are unlikely to be sustainable. He emphasized that share buybacks are more crucial than dividends for genuine enhancement of corporate value.

CEO Jang Woo-jin explained that from a long-term perspective, share buybacks have a greater impact on stock price appreciation. SK Hynix's share buyback case demonstrated a long-term floor effect on stock prices.

In contrast, Samsung Electronics' dividend-centric shareholder return policy tends to be viewed as a one-off by the market, he noted. While dividends have a short-term stock price boosting effect, they have limitations in leading to long-term corporate value appreciation.

The market prefers sustainable shareholder return policies, linking them to a company's future growth potential. Share buybacks reduce the number of outstanding shares, increasing value per share.

For these reasons, the market evaluates the impact on stock prices differently depending on the company's method of shareholder return.

CEO Jang Woo-jin stated that the U.S. Treasury's move to buy back bonds was an unavoidable measure taken under difficult circumstances and has policy limitations. He explained that since buybacks involve the Treasury issuing bonds and then repurchasing them, their scale is inherently limited.

While buybacks have an upper-bound limiting effect on rising interest rates, they struggle to significantly lower rates. The Treasury's buybacks could also be perceived by the market as a negative signal, indicating an emergency situation.

These policy limitations could further fuel concerns about a prolonged high interest rate environment. The market is closely watching for additional response measures from the Treasury.

He suggested that the market has at least entered the initial phase of a bubble.

He warned that if AI-related issues arise in the U.S., the entire global stock market could experience significant tremors. While the growth potential of the AI industry is high, overheated investment sentiment could act as a potential risk factor.

Therefore, investors need a cautious approach to AI-related companies, meticulously reviewing the company's actual value and profitability rather than simply investing based on growth potential.

This approximately 2 trillion won difference can be interpreted as share repurchases by companies like Samsung Electronics and SK Hynix.

He mentioned the possibility of data distortion arising from the non-inclusion of supply-demand data from certain entities, such as general corporations, in official aggregations. He predicted that this discrepancy will continue.

Ray Dalio, founder of Bridgewater Associates, warned that a financial crisis could occur within one to five years. He emphasized the severe current financial situation and raised the possibility of a future crisis.

However, expert Park Byung-chang explained that there is a difference in perspective between experts and individual investors, as individual investors do not stop investing now based on a predicted crisis 3-5 years from now. Individual investors tend to focus more on short-term market opportunities.

Experts recognize the risks, but believe that the response until an actual crisis occurs depends on individual investment strategies and responsibilities. These differences in timing and response methods are always present in the investment market.

Ray Dalio's warning highlights long-term risks from a macroeconomic perspective, but it may be difficult to bring about immediate changes in investment decisions for individual investors seeking short-term gains.

While SK Hynix presented a clear standard of 'over 50% of FCF (Free Cash Flow)', Samsung Electronics showed no significant changes from its existing policy.

Samsung Electronics' existing FCF 50% level shareholder return policy failed to meet market expectations. This indicates that investors had anticipated more aggressive and specific expansions of shareholder returns.

Until the board meeting in January next year, Samsung Electronics' stock price may experience increased volatility due to policy uncertainty, and foreign investor sentiment will also be a crucial variable.

The market believes that corporate shareholder return policies significantly impact stock prices, and it demands more clear and confident policies, especially in the context of high uncertainty in the semiconductor industry.

He pointed out the tendency of stock prices to move based on vague expectations rather than actual performance.

He noted that Kakao's Baekdabang, while slowing down domestically, has high overseas sales and popularity, which he considers a positive factor. However, he analyzed that the market is showing fatigue and disappointment regarding Kakao's spin-off.

Expert Jang Woo-jin stated that the market is reacting negatively to the frequent spin-offs within the Kakao group. While Kakao aims to clarify its business direction by splitting into AI and Kakao X, the market is feeling fatigued by this.

In particular, unlike Naver, Kakao is criticized for having an unclear business direction, such as data center construction. Too frequent spin-offs can dilute the company's core value and confuse investors.

Uncertainty until next year's listing also negatively impacts investor sentiment. The market expects a long-term growth roadmap and concrete business performance.

Expert Jang Woo-jin cited former President Donald Trump's policy stance as one of the factors behind Bitcoin's strength. He explained that Trump's push to pass the 'Clarity Act' is sending positive signals to the Bitcoin market.

The connection between a strategy to create demand following rising U.S. Treasury yields and Bitcoin was also mentioned. These macroeconomic factors are influencing Bitcoin's price.

Additionally, a trend of related theme stocks rising in tandem with the schedule of domestic digital asset laws is being observed. This illustrates the impact of changes in the regulatory environment on the digital asset market.

This indicates that a rotational flow is forming within the market.

The trend of major secondary battery companies like Samsung SDI and L&F returning to profitability is positively reflected in their stock prices. Expectations for improved performance are stimulating investor sentiment.

The growth potential of the ESS (Energy Storage System) market is also highlighted due to increasing power demand and strengthened renewable energy policies. ESS can become a new growth engine for the secondary battery industry.

These complex factors are driving the rebound in the secondary battery sector, and the market tends to seek opportunities across various industries rather than concentrating on a single sector.

He appears to have judged that the current stock price level is close to its bottom.

He emphasized the need to carefully check foreign supply and demand data, as the trading trends of foreign investors significantly influence stock price direction.

Lee Yeok-jin recommended focusing on the rotation of individual stocks rather than the overall direction of the index. This means that investment opportunities should be sought in the movements of specific sectors or stocks rather than the entire market trend.

Expert Lee Yeok-jin pointed out that if Samsung Electronics were to retire its treasury shares, it could lead to shareholding ratio issues due to the financial-industrial separation law. While treasury share retirement reduces outstanding shares and increases value per share, it could affect the stakes held by Samsung Life Insurance and Samsung Fire & Marine Insurance in Samsung Electronics.

Under the current financial-industrial separation law structure, if treasury shares are retired, the shareholding ratio of Samsung Life and Samsung Fire & Marine in Samsung Electronics would forcibly increase. This could lead to a situation where these insurance companies are legally required to sell off excess shares.

Consequently, there are concerns that treasury share retirement could paradoxically lead to selling pressure on Samsung Electronics stock. Such structural constraints add complexity to Samsung Electronics' shareholder return policy decisions.

The intention is to maximize profitability in a situation where demand is high but supply is limited.

This can be seen as a strategy to increase overall revenue and profit by raising nominal value even if quantities do not increase. It is a realistic measure a company can take amidst ongoing supply constraints in the semiconductor market.

Nvidia's statement can also be interpreted as a move to instill positive expectations in the market ahead of its earnings announcement. By demonstrating a strong will to improve profitability to investors, it can be expected to induce stock price increases.

He explained that in the past, SpaceX's IPO issues had acted as market peak signals.

He cited the current situation where super-large IPOs are setting new highs, noting that this phenomenon shows a similar pattern to past market peak periods.

This warning implies that while IPOs by large companies provide liquidity to the market and raise expectations, they can also indicate the climax of overheated investment sentiment.

This indicates an active inflow of capital into the venture ecosystem.

He referred to the past instance where venture investment rapidly increased just before the KOSDAQ rally from 2022 to 2023, explaining that the current situation is similar. This suggests that an increase in venture investment can be a leading indicator foreshadowing a future boom in the KOSDAQ market.

Therefore, it was presented as a basis for expecting a positive performance in the KOSDAQ market next year. When investment in venture companies becomes active, the growth of these companies can lead to overall vitality in the KOSDAQ market.

This analysis emphasizes that it is time for investors to pay attention to the potential growth of the KOSDAQ market.

However, to fully recover the large outflows experienced in June and May, this positive trend needs to continue for several more weeks. The market is closely watching whether Bitcoin demand through spot ETFs will steadily continue.

This increase in spot ETF net inflows can also positively impact Bitcoin's price. Investors are using spot ETF data to gauge the overall market sentiment.

Bitcoin spot ETFs are a key means for traditional financial market investors to access Bitcoin, so changes in this metric hold significant meaning for the market.

Expert Kim Nam-woong cited three main factors behind Bitcoin's rise. First, the administration's deregulatory stance is positively influencing the digital asset market, reducing uncertainty in Bitcoin investment.

Second, the U.S. Treasury's buyback of long-term bonds is affecting the market. This can supply liquidity to the bond market, directing funds towards riskier assets. Long-term bond buybacks contribute to interest rate stabilization and can enhance the investment appeal of risk assets like Bitcoin.

Third, there's a trend of miners utilizing Bitcoin for AI data center infrastructure instead of selling it. They are using mined Bitcoin to expand infrastructure for AI inference costs rather than directly selling it. This is a new development that reduces selling pressure in the Bitcoin market and enhances the practical utility value of digital assets.

These three factors work in combination, contributing to Bitcoin's sustained strength.

The proportion of revenue related to applications has increased compared to 2021, meaning that investments based on actual user activity and revenue are becoming important.

Investing in applications that create and utilize real value, rather than mere speculation, suggests the future direction of investment. As blockchain technology becomes more commercialized, the importance of services and platforms that utilize the technology, rather than the technology itself, is being highlighted.

This change is an indicator of the maturity of the digital asset market. Investors are now paying more attention not only to the potential of the technology but also to how it is applied in the real world and generates revenue.