Tech Rally Amidst Global Economic Crossroads

Micron finished the day up about 3%.

The host remarked that interest rates need to stabilize and geopolitical issues in the Middle East need to improve to support the market.

Micron's earnings performance helped sustain the memory sector. The host suggested a target price of 180,000 won for SK Innovation, noting that the investment sentiment feels like it is shifting from a 'yellow light' to a 'green light'.

Korean market holidays on October 5 and October 9 will limit trading days to Tuesday through Thursday next week. The host suggested that for those with cash or realized profits, it might be an appropriate time to prepare for new entries, specifically in KOSPI, Samsung Electronics, and SK Hynix.

The host dismissed concerns regarding the completion of Samsung Electronics' share buyback as market noise, emphasizing that the positive sentiment following Micron's earnings is more significant.

Buying on dips is suggested as a strategy. Additionally, the host mentioned that if the Dow Jones and Nasdaq indices continue to strengthen, it could positively influence market sentiment.

The host experienced multiple power outages and noted that data centers consume a significant amount of electricity. The host remarked that these supply issues provide a logical context for the recent rally in power company stocks.

For SK Hynix, the host suggested that purchasing around the 1.75 million KRW support level could be reasonable. For Samsung Electronics, the host mentioned the potential to move toward 320,000 KRW, though noted that interest in the stock varies among viewers. The host maintains a generally positive stance on semiconductors based on the buying pressure seen in Micron's results.

The host suggested that while one should still approach the market conservatively, it is now acceptable to follow the current rally and enter certain positions. Sectors like materials, parts, and equipment (Sobu-jang) continue to show momentum, and the current market environment makes it viable to follow the trend.

A viewer questioned if the significant gap between SK Hynix stock and its American Depositary Receipt (ADR) performance justifies a shift from Korean to US stocks.

The host acknowledged the disparity, mentioning that Korean companies frequently engage in 'split-off' listings.

This is contrasted with companies like Google, which maintains a single entity despite having numerous subsidiary businesses, providing a more consolidated investment.

While a breakthrough above 928 could potentially lead to the index reaching 1,000, Eddie, the host, suggests that this upward movement is unlikely to occur rapidly, possibly extending over several months or even into 2025.

Entertainment stocks, including JYP and HYBE, are experiencing poor performance, which the host attributes to significant noise and controversies surrounding them.

The host suggests that he would prefer buying AI stocks over these entertainment stocks under the current circumstances.

The Ministry of Economy and Finance issued a statement following an F4 meeting, acknowledging a general increase in yields across the Korean bond market.

To manage this upward pressure, the government indicated that it might reduce the additional issuance of government bonds and plans to closely monitor both bond yields and issuance conditions.

Korean shipbuilding stocks, such as Samsung Heavy Industries, are exhibiting notable weakness in the current market, with Samsung Heavy Industries' support level identified at 23,800 won.

The host attributes this weakness in the Korean shipbuilding sector to the current high-interest rate environment.

Oyi Solution is currently at a critical support level of 27,000 KRW, with a potential target resistance at 35,000 KRW.

Seojin System has established a holding point at the 50,000 KRW level, indicating a steady position.

Futurechem is characterized as a speculative stock with a price of 8,000 KRW, necessitating caution for investors.

This geopolitical unrest is also contributing to pronounced upward pressure on bond yields, particularly in the UK and France, with UK gilt yields reaching approximately 6%.

The French fiscal budget debate is further exacerbating the bond market's sensitivity in Europe.

The global bond market is experiencing significant stress, evident in the immediate sell-off of the Paramount bond deal upon trading and the widening of spreads on triple-C rated US bonds to distress levels.

In response to these pressures, governments in Asia are taking proactive steps; South Korea, for example, is reducing bond issuance to manage yield pressure.

Economies such as Indonesia, the Philippines, and India are particularly vulnerable, grappling with the dual challenges of high energy costs and elevated borrowing expenses.

The Chinese authorities are also considering additional stimulus measures, including bond sales, to boost consumption, although the market has shown limited enthusiasm thus far.

Former President Trump is reportedly pressuring European countries to release their diesel reserves, contemplating a US diesel export ban to enforce cooperation.

While a US export ban could offer temporary relief in domestic markets, it poses long-term production challenges, especially given that refining systems are already operating at capacity and facing bottlenecks.

This strategic move aims to accelerate Tencent's AI initiatives, including the development of models and its agents, particularly for the WeChat Super app.

The deal addresses China's limited access to advanced chips due to US export controls, compelling Chinese tech giants to rent these components from data centers, with Southeast Asian data centers being major beneficiaries.

Tencent's infrastructure spending is up by 30%, which, according to reports, may help explain to some extent why there was negative free cash flow for Tencent in the most recent earnings.

This comes as Hong Kong futures are down just slightly and the Hungsing Index is down about 2%, with the news described as not very good for Hong Kong.