Super Week Ahead of Jackson Hole and Nvidia, Samsung Electronics and SK Hynix Shareholder Return Announcements Secure Downside Support for Stock Market

After Samsung Electronics announced its shareholder return policy, its stock price showed a decline in after-hours trading. The market had expected concrete details and immediate implementation, but the actual announcement indicated a delay until January next year, making immediate effects unlikely. This led to an assessment that the announcement did not sufficiently meet investors' expectations.

As the U.S. 30-year Treasury yield rose again and the 10-year yield surpassed 4.7%, market anxiety about interest rates significantly intensified. This rise in rates raised concerns that it could dampen investor sentiment and negatively impact the stock market.

SK Hynix announced a record-high shareholder return policy of 40 trillion won, and Samsung Electronics announced one between 90 trillion and 110 trillion won, acting as a strong safeguard supporting the downside of the domestic stock market. These expectations for shareholder returns are positively reflected in the market, projected to prevent a sharp decline in the stock market despite interest rate anxieties. With a structure in place that can open the upside, major events such as Nvidia's earnings announcement are anticipated.

The August Services Purchasing Managers' Index (PMI) recorded 56.8, reaching its highest level in approximately two years. Additionally, the August Composite PMI also hit 56, its highest in 56 months, indicating overall strong economic indicators. These figures helped alleviate concerns about stagflation and contributed to the market's potential rebound.

The U.S. Treasury increased the size of long-term bond buybacks from $2 billion to $4 billion per session, resulting in a downward adjustment of the U.S. 10-year Treasury yield to around 4.6%. This demonstrates ongoing policy intervention to curb rising interest rates and acted as a factor in somewhat easing market anxiety about interest rates.

On Friday, the Russell 2000 index showed a phenomenon of rising in tandem (coupling) with increasing interest rates. This is interpreted as psychological evidence that the market will no longer reflect further sharp increases in interest rates. In other words, it can be seen as a strong indicator that an interest rate ceiling is forming, suggesting a positive market reversal.

This week, on the 24th, Secretary Blinken is set to unveil unprecedented economic sanctions against Iran, and the Iranian president has expressed willingness to negotiate with the U.S., raising the possibility of easing geopolitical tensions. Additionally, with Samsung Electronics' shareholder return announcement, the first regular trading session will open, so attention should be paid to market supply and demand movements. This week, AI and interest rate-related factors are concentrated in one week, including the Jackson Hole meeting, Nvidia's earnings announcement, the U.S. PCE index release, and the Bank of Korea's Monetary Policy Committee. As such, during this 'Super Week' with many critical events, there are numerous key variables that will determine the market's direction, so investors should pay close attention to each schedule and announcement.