September Stock Market: Semiconductor Resilience Amid Volatility

Investors are maintaining caution regarding a market downturn, and macroeconomic risks such as rising oil prices are also contributing to market uncertainty.

PB Son Su-yeon conveyed the cautious market mood, saying, “I think today might be relatively uneventful, a battle of caution. I believe for now, it will be a market treading on thin ice.”

Despite the US stock market falling for two consecutive days recently, the semiconductor index has maintained a robust trend. This can be interpreted as a sign that the semiconductor sector has developed immunity. Traders' wait-and-see attitude due to share buybacks is also influencing this trend.

PB Son Su-yeon emphasized the strength of semiconductor stocks, stating, “Ultimately, it seems like some immunity has developed. So, despite the semiconductor index not being that good, it remained solid.”

September is historically known as a month of seasonal weakness. This week, the release of CPI and PPI inflation data is scheduled, and the FOMC meeting is also approaching. There is a possibility that the market may overreact ahead of these major events.

PB Son Su-yeon explained the characteristics of the September market, saying, “There’s a general perception that September is bad, isn’t there? It’s been a seasonally weak month, and now with inflation and the FOMC focused this week…”

Political variables such as wars and midterm elections can affect the market, so it is necessary to closely check their impact on corporate fundamentals.

PB Son Su-yeon advised, “Rather than seeing this as a big decline, it is volatility and adjustment. And this should be a month to check if there is a big impact on fundamentals.”

Interest rate volatility has increased since the Jackson Hole meeting, and employment indicators show little sign of easing. In particular, oil prices are directly linked to cost-of-living inflation and significantly impact elections, so careful observation of oil price volatility is needed. Indeed, 48% of voters cite the cost of living as the most important issue in the midterm elections.

PB Son Su-yeon emphasized the importance of oil prices, stating, “I think the most important thing is oil prices. The cost of living affects elections the most. That’s why 48% consider the cost of living the most important issue in this midterm election.”

The surge in diesel prices is having a significant impact on the overall economy. Despite Goldman Sachs raising its oil price forecast, it projects around $80 per WTI barrel, suggesting that political pressure could intensify if oil prices continue to rise. A sharp increase in oil prices could lead to a decline in consumer sentiment and inflationary pressure.

PB Son Su-yeon mentioned, “Goldman Sachs has raised its oil price forecast by $5, even though it's already approaching $100. They're projecting around $80 for WTI.”

This is interpreted as a signal that there is ample room for market liquidity, and corporate buybacks are expected to act as a market buffer. In September, it will be necessary to continuously observe the liquidity flow of the Treasury balance and corporate buybacks.

PB Son Su-yeon stated, “The Treasury's target was $950 billion, but it has risen significantly to about $944.3 billion.”

September in a midterm election year typically shows a tendency for correction, but a rebound could begin from October, after the election. According to BlackRock's statistics, a rebound began 22 trading days before the midterm election, with an average 6-month return of 14.1%. This is because the resolution of uncertainty, rather than the political outcome itself, acts as a driving force for market growth.

PB Son Su-yeon explained, “According to statistics BlackRock surveyed in the past, it rebounds from 22 trading days before, and the average 6-month return is a positive 14.1%.”

In particular, the semiconductor and cosmetics sectors are expected to show continued growth with strong exports. She also advised paying close attention to energy storage system (ESS) related stocks.

PB Son Su-yeon stated, “I believe we should trust the numbers the most, and the August export data came out, right? Based on that, I'm still focusing on semiconductors, cosmetics, and ESS.”, emphasizing the importance of an investment strategy based on objective indicators.

Bank of America revised its conservative outlook for the memory market, estimating that memory inventory will fall below 1.1 months. This suggests that the upward momentum in the semiconductor industry could strengthen. Additionally, Apple's supply chain diversification policy can reduce dependence on specific companies, removing upside constraints for the overall semiconductor sector.

PB Son Su-yeon explained the change in market outlook, saying, “Bank of America—a question arises here. If so, memory prices should go up, right? When they calculated backward, they judged it to be conservative and reissued a report.”

Despite current token prices falling, per capita token usage is actually increasing. This means that AI agents are becoming more intelligent and are being utilized more actively.

As a result, as the increase in usage outpaces the decrease in token prices, the profitability of AI-related companies is expected to improve. This trend, along with the advancement of AI technology, will be a key driver for the continuous growth of related industries.

PB Son Su-yeon explained the paradoxical phenomenon of increased AI usage, saying, “Token prices have gotten cheaper, but people are using them more. The amount of tokens spent per person is increasing, and indeed, the agents are getting smarter.”