Will the Bull Run Continue Before the FOMC?

Having confirmed that last Tuesday was the bottom, the US stock market is currently maintaining an upward trend across the Dow, S&P, and Nasdaq. Stock market participants appear to be focusing more on corporate earnings than on macroeconomic indicators. Han Sang-hee, an expert, predicted that given the current market situation, there would be an effort to push stock prices up before the FOMC.

Bond investors continuously demand that the Federal Reserve (Fed) continue to raise benchmark interest rates, while stock investors seem to tolerate the current inflation level. This divergence in views could increase market volatility.

A commonality is that midterm elections are held immediately after a presidential re-election. The savings and loan crisis at the time, which created an atmosphere of defeat for the ruling party in the midterm elections, is also compared to the current situation. Analysis also suggested similarities in the possibility of a stock market decline between September and October, and the declining popularity of former President Trump.

Given the time difference between Astra's announcement and the stock price reaction, it is highly likely that this is a result of accumulated data. Market participants are already investing in technological potential rather than earnings indicators, and an inflow of smart money into the hardware and memory sectors is being observed.

While differences may occur by country and sector, if only the Korean market is weak, there must be internal factors at play. Park Byeong-chang, an expert, pointed out that these internal factors could be the cause of increased fluctuations.

Concerns are raised about the unclear intentions of supply and demand players if further gains occur. Breaking through resistance levels will be a crucial factor for additional increases. Park Byeong-chang, an expert, questioned whether other companies should be catching up to us, rather than the other way around, given that we are number one.

As the market rises, there is a continuous possibility of sell-offs from individual investors who are holding at a loss. However, if institutions and foreigners absorb these sell-offs and smoothly facilitate handovers, it is interpreted as a very positive signal for the market. Especially for SK Hynix, major resistance levels are formed around KRW 2,000,000 to KRW 2,100,000, making handovers in this range important.

Market attention is highly focused on the FOMC meeting next week, following this week's CPI announcement. Opinions among Fed members are split evenly between maintaining and raising interest rates. Park Byeong-chang, an expert, emphasized that future guidance, meaning dovish remarks from the Fed, is more important than the rate decision itself. He also noted that if long-term interest rate concerns grow, the possibility of an insurance-like rate hike cannot be ruled out.

The yen-dollar exchange rate's decline to the 154 yen level is stimulating volatility in Asian stock markets. News of Japan's foreign exchange reserves decreasing by the largest margin ever is leading to speculation of bond sales, increasing macro caution. Lee Ji-hyun, an expert, judged that while today's market opening would not be bad due to semiconductor influence, there is a possibility of cautious selling in the afternoon session.

A potential shortage of production capacity is raised due to the supply contract with Samsung SDI, and there is a demand for expansion due to a lack of LFP cathode material suppliers in the US. Therefore, it is highly likely that an expansion funded by capital raising is being considered.

Lee Ji-hyun, an expert, emphasized the possibility of an upper shadow forming in the afternoon and the need to observe lower support levels. She added that continuous attention to weaker stocks is important.

Despite the government officially denying rumors of acquiring a stake in Westinghouse, related stock prices actually rose. This shows that investors trust the expectation of concrete US investment projects more than the government's official denial. Lee Ji-hyun, an expert, mentioned that stock prices did not fall but rather rose immediately after the news reports, suggesting strong investor expectations for US investments.

Investors' caution regarding macroeconomic conditions is increasing ahead of the US stock market opening. Accordingly, a 'strong start, weak finish' market trend is likely in the afternoon. Supply and demand are expected to concentrate on stocks that can generate definite profits. Lee Ji-hyun, an expert, maintained a positive view on nuclear power stocks but mentioned that momentum might be weak in the current resistance zone.

A strategy was proposed to diversify portfolios that were concentrated in semiconductors in the first half of the year. Lee Ji-hyun, an expert, sees secondary batteries, semiconductor materials/parts/equipment, and power infrastructure sectors as promising, and recommended diversifying investments to include robotics and pharmaceutical bio. Diversifying the portfolio can help prepare for sector specific underperformance and pursue stable returns.

Samsung Electronics' preliminary Q3 earnings announcement is in early October, and SK Hynix's earnings announcement is in late October. Given the sharp decline experienced in July due to high market expectations, expectations are not as high this time. Announcer Yeo Do-eun mentioned that stock price increases that quietly creep up when there are no expectations are the most formidable, and attention is now focused on whether an earnings surprise will alleviate investor anxiety.

Even after its maximum drawdown (MDD), Nvidia's stock price rose again as operating margins remained robust. No Young-rye, an expert, speculated that Korean semiconductors and Micron might follow this trend of Nvidia, explaining that market concerns would be dispelled if semiconductor operating margins consistently stay at 70-80%. She provided an investment rationale that good results can be achieved by holding out over time.

Concerns exist that the rise in memory prices may be limited due to long-term contracts with Nvidia. However, No Young-rye, an expert, analyzed that if price (P) is maintained, an increase in quantity (Q) will be the key driver of stock price appreciation. In other words, for quantity to increase, facility investment and subsequent production volume increases are ultimately necessary, and results can be expected from the point when Q is confirmed after this year's hiatus.

With only about 280 out of 9,000 domestic dental clinics having adopted Graphic's system, there is significant upside. Currently, overseas sales account for a high proportion, but operating losses are occurring due to marketing expenses for raising brand awareness. The speaker predicted a similar growth trajectory to 'Align Technology,' a strong player in the existing clear aligner market.

The possibility of support from the unlisted company Megagen Implant was also mentioned, indicating an intention to integrate fragmented overseas distribution networks for greater efficiency. The speaker explained that the acquisition of RAY was an unavoidable choice for a collaboration model and vertical integration.

This year's overseas sales target is KRW 19 billion, and next year's target is KRW 45 billion to KRW 50 billion, with plans for rapid growth. In particular, it plans to fully enter the Chinese market by signing an exclusive distribution agreement with 'Bieinler,' the number one golf wear company in China, and is also pursuing market penetration in Southeast Asia.

Reporter Ham Jae-young explained that new regulations, such as a KRW 4 billion equity requirement for issuers and the mandatory employment of four specialized personnel, will be established. This is expected to accelerate the institutionalization of the tokenized securities market and lay the groundwork for more assets to be traded digitally.

On-chain transaction volume has recovered by 58% compared to the peak of the last cycle, indicating increased activity among market participants. This suggests a diversification of investor personas, making it difficult to assess the market solely by Bitcoin ETF inflows. Kim Nam-woong, CEO, explained that the increase in on-chain transaction volume can be seen as an indicator that web-native users are becoming more active on the chain. Active participation is particularly observed around Solana, BNB, and Robinhood Chain.

Kim Nam-woong, CEO, cited an example where AMC's publicly listed stock, issued on Robinhood, is used as quote currency, and a memecoin is tied to it to issue an AMC token. This creates 'flywheel volatility' due to the correlation between stock prices and memecoin prices, leading to concerns about market manipulation and actual companies expressing discomfort.