Market Trends After the Jackson Hole Meeting?

The market initially showed a downward trend due to a hawkish interpretation of the Jackson Hole meeting results. However, as the perception spread that interest rate hikes were not definite, investors responded calmly, returning to fundamentals. Major big tech stocks rebounded, leading to mixed results in the US market and defending the overall decline.

This confirms support at a technically crucial level, suggesting the possibility of a market rebound. Meanwhile, foreign investor supply and demand showed a concentration in the futures market rather than the spot market.

In particular, there is strong intent to sign long-term supply agreements (LTA) based on DRAM, expected to exceed the original target of 60-70% LTA signing. In addition to HBM (High Bandwidth Memory), demand for enterprise SSD (eSSD) is expected to support NAND sector performance. This is interpreted as a result of expressing overall industry confidence through the Citi Conference. This outlook signals a positive trend for the memory semiconductor market in the future.

This buying by other corporations is largely interpreted as share buybacks by Samsung Electronics and Hynix, which had a psychological and practical effect of supporting the index's lower end.

Backwardation, where futures prices become cheaper than spot prices, occurred at the same time. This is a unique supply and demand pattern resulting from large-scale selling of futures by foreigners at the same time, suggesting increased early market volatility tomorrow. The market closed with spot prices higher than futures, increasing the likelihood of downward pressure. Therefore, the market may experience a slight decline early tomorrow due to backwardation.

Last week, a Trump executive order raised the possibility of virtually expelling Chinese-made power equipment from the US. The market is now looking at a potential outright ban, not just reduced exposure, which could bring a ripple effect of benefits to Korean power equipment companies. The fact that Korean companies have factories in the US is analyzed as a significant advantage.

The revised July non-farm payrolls figure, showing a decrease of 20,000, reinforced the perception of a cooling job market. However, if the August non-farm payrolls are announced at over 50,000, the possibility of an interest rate hike could re-emerge, drawing significant market attention. The 'JOLTS' (Job Openings and Labor Turnover Survey) indicator is a crucial leading indicator that shows companies' hiring intentions before actual employment data is released. Its ability to provide an early glimpse into employment possibilities makes it a highly sensitive market indicator, playing an important role in predicting changes in the job market.

If Japanese government bond yields exceed 3%, the likelihood of yen-carry trade unwinding increases, which could lead to volatility in global financial markets. Conversely, if the BOJ does not raise interest rates, there is concern about increased yen/dollar exchange rate volatility. Therefore, investors should closely monitor the BOJ's decisions to formulate strategies that reduce macro volatility.

The forecast for next year's KOSPI net income in the semiconductor sector is very high at 800 trillion won. This leads to criticism that the semiconductor sector's weight in the total KOSPI is excessively high. Therefore, to secure additional growth momentum, an increase in CAPEX (capital expenditure) guidance from big tech companies is crucial. In the current situation, it is also necessary to consider the possibility that big tech may become more favorable than memory semiconductors in terms of stock prices.

While it is true that the performance of Chinese memory companies like Changxin Memory has surged, their scale is still small compared to the overall market. Furthermore, Chinese companies have consistently stated they have no intention of lowering prices to disrupt the market, so they are unlikely to pose an immediate threat to our market for the time being. Therefore, at present, there is no need to be overly concerned about Chinese memory companies.

Given the operational scale of institutional and foreign investors, it is difficult for them to invest in companies with small market capitalization. Therefore, a portfolio focused on large-cap stocks is recommended. In addition to the semiconductor sector, there is a tendency to prefer the secondary battery and shipbuilding sectors as alternatives.

The market is expected to trade sideways, but this can provide an opportunity for prepared investors. In a sideways market, stocks not held may surge strongly, so the market should be viewed from a sector rotation perspective. Chasing after short-term soaring stocks carries a high risk of loss and should be avoided. A strategy of buying on dips, focusing on quality stocks, is effective.

To maintain semiconductor weight, there are two key checkpoints. First, continuously confirm the stability of the macroeconomic environment. If the macro environment becomes unstable, it may be necessary to adjust semiconductor weight. Second, closely monitor margin loan trends. A sharp increase in margin loans can be a sign of market overheating, so this indicator needs careful attention.

It is also time to positively reassess the power equipment sector, which was previously viewed conservatively. Considering China's dependence and current market conditions, the attractiveness of the ESS (Energy Storage System) sector is increasing, requiring attention. These portfolio strategy changes are measures to adapt to market shifts.

In the secondary battery industry, there is a high probability of a battery supply-demand imbalance, or shortage, occurring in the second half of 2027. If a shortage occurs in the second half of next year, the ESS (Energy Storage System) sector is likely to be a strong candidate. This is because the trend of electric vehicles becoming small data centers and the momentum linked to ESS are expected to strengthen. Therefore, for secondary battery-related stocks, a strategy of buying on dips after a short-term rebound is likely to be effective.

A positive outlook for the Anthropic IPO has emerged. This is because the market situation is different from when SpaceX went public. Anthropic is a core AI theme, and upon its listing, investment funds are likely to flow into related areas such as semiconductors. Therefore, it has been analyzed that the Anthropic IPO will not lead to concerns about semiconductor selling, but rather could be an opportunity for joint growth.

It has been argued that the phenomenon of individuals selling stocks ahead of the Chuseok holiday could actually be a buying opportunity for foreigners. Currently, 1.5 trillion won worth of share buybacks are acting as a buffer against market declines.

While margin loans may be resolved if the index rises, excessive margin loans can be a factor in increased market volatility, requiring careful management.

Advice was given that if trading skills are lacking, it is best not to touch underwater stocks and simply wait. Investing in new, strong stocks might be a more efficient strategy than averaging down. This approach can help recover losses and improve overall portfolio returns.

Top market cap stocks may have limited upside momentum as their value is already fully reflected in the price. Instead, discovering lesser-known 'underdog' companies could potentially bring greater returns. This perspective emphasizes the diversity of investment strategies.

Since individual investors rarely have opportunities to invest in unlisted venture companies, investing in about 15 listed companies with equal weighting can be a method. This opens up the possibility of expecting returns of over 1,000% from some stocks.

In August, the KOSPI 200 market-cap weighted ETF rose 2%, while the KOSPI 200 equal-weighted ETF surged 12%, showing a significant difference. This suggests that market-cap weighted approaches can experience performance stagnation due to concentration in large-cap stocks. Conversely, the equal-weighted approach clearly provides opportunities after market cap concentration intensifies and has the potential for better long-term performance. Therefore, an equal-weighted investment strategy can be considered as an alternative to market cap concentration.

While loss-making companies may see stronger stock prices in good market conditions, investors tend to focus on profitable companies when they become more discerning. This suggests that investment strategies should vary depending on market conditions.