How to Endure Stock Market Fluctuations Caused by War

This serves as an important indicator when analyzing market trends before and after the escalation of war issues. Technical declines in the US market tend to be reflected in advance in the domestic market.

Considering that the 10-year Treasury yield has reached 4.9% and WTI crude oil prices are at $104, the potential for further increases in oil prices and Treasury yields is limited. It is better to refrain from hasty selling until the market breaks an unusual inflection point, as high interest rates and oil prices are already reflected in the market, so additional downward pressure may not be significant.

However, industrial indicators such as Oracle's backlog still maintain a positive trend, suggesting that the overall industry fundamentals are solid despite temporary deterioration in macro indicators. Therefore, short-term indicator deterioration is not expected to determine the long-term market direction.

Recent 10-year and 30-year Treasury auction results showed stronger-than-expected demand. The primary dealers' share of Treasury purchases decreased, which means that external bidders or institutional investors actively purchased these bonds, deeming their prices attractive. Primary dealers are responsible for taking up unsold bonds if external demand is weak, so their reduced participation indicates strong external demand.

It is rare for the stock market to crash solely due to widely recognized negative factors. Instead, unexpected adverse events cause significant market shocks. Therefore, if current macroeconomic uncertainties are already largely reflected in the market, selling off all holdings during a short-term correction may lead to missing opportunities for market rebound. With potential positive news for specific sectors like semiconductors, a strategy of enduring volatility from a long-term perspective is necessary.

Former President Donald Trump's remarks on intervention in the Middle East war have frequently changed. His flip-flopping is not new; he has often said things would improve, only for conflicts to escalate, and conversely, situations have often improved after he spoke negatively and negotiations began. Such political speech uncertainty can cause market volatility, such as gap-ups or gap-downs, over the weekend. To respond to these unpredictable market movements, a 'trap-setting' trading strategy should be considered.

Despite the recent PPI (Producer Price Index) meeting expectations, interest rate hike probabilities have risen. This appears to be because commodity prices, such as diesel, were significantly affected by the war when analyzing detailed data. It is necessary to interpret indicators by allowing for the possibility of data distortion due to external variables like war. Rather than being overly swayed by changes in FedWatch, it is wise to prepare countermeasures by focusing on the highest possibility of an interest rate hike scenario.

There is also concern that rather than intraday volatility settling, abnormal trading behaviors, or 'games,' using simultaneous orders, etc., may occur in specific segments. This could undermine market efficiency and potentially disadvantage individual investors.

Foreigners' selling of trillions of won yesterday also affected the simultaneous order at market open, causing changes in supply and demand for major stocks like Samsung Electronics and SK Hynix. If foreigners maintain their selling stance, stock prices may gradually decline. Therefore, whether foreign supply and demand recover during intraday trading is an important point to watch, and the scale of foreigners' selling (above a trillion won) should be closely monitored. Such trends in foreign supply and demand can dictate the overall market sentiment.

Immediately after market opening, KOSPI and KOSDAQ indices generally showed weakness, affected by geopolitical risks. While maintaining a similar trend to the simultaneous order, some stocks that showed strength the previous day, such as KEPCO E&C and HD Hyundai Marine Solution, continued to rise. This suggests the possibility of limited gains for relatively defensive stocks when geopolitical instability increases.

Quantum cryptography-related stocks (such as KCS), led by Exagate, showed a rotation pattern. AI security stocks (Sands Lab, Monitor Lab) linked with Hancom also garnered market attention. In such theme stock rotations, the key condition is the robust maintenance of the leading stock. If the leading stock falters, other related stocks may also decline due to profit-taking. Therefore, continuous observation of the leading stock's trend is crucial.

Despite the shock from war-related issues, the market is currently maintaining a more robust trend than expected. Close observation of the rotation between large-cap stocks and war-related stocks is necessary, and changes in foreign supply and demand could be a crucial variable to reverse market sentiment. Additionally, the possibility of short-term profit-taking linked to WTI crude oil trends should be kept in mind, and the market should be watched carefully.

Market volatility is likely to increase due to current fluctuating indicators. Rather than purchasing all funds at once, a staggered buying strategy that considers additional purchases is needed. Maintaining a cash position allows for psychological comfort by providing opportunities to buy at lower prices during market downturns. If there is no cash, other efforts to generate income should be pursued in parallel.

MLCC (Multi-Layer Ceramic Capacitor) related stocks such as Samhwa Capacitor continue to surge. Demand for high-capacity MLCCs remains robust, and the price increase trend is also maintained. It is important to confirm the correlation between the semiconductor cycle and the MLCC industry conditions, and to pay attention to the possibility of rotation among related stocks such as Kochip and Abatech. As the short-term upward trend is currently maintained, it is crucial that the 123,000 won line is not broken.

Recently, at AI tech conferences and other events, there have been numerous mentions of shortages and price increases. This is evidence that companies' performances are excellent and industrial growth will not be short-lived. If external variables are resolved, even higher upside is expected. The industry's fundamentals are robust, and there is a view that stock prices have significant room to rise if the external environment improves.

Since the future is unpredictable, concerns about uncertainty can lead investors to negative thoughts, making a holding strategy difficult. It is crucial to consider how to resolve this uncertainty. Rather than being swept away by mere fear, it is necessary to adhere to one's investment principles and approach things from a long-term perspective.

The target prices for KOSDAQ semiconductor material, parts, and equipment (Sobu Jang) related companies such as J&TC (glass substrates) and PSK Holdings are trending upwards. If the semiconductor industry continues to grow, front-end and back-end process related stocks are also likely to rise in tandem. These smaller stocks have the characteristic of achieving additional performance based on the continuous growth of the semiconductor industry. In contrast, entertainment stocks have a defensive nature but currently have low interest, so caution is needed in investment.

Ahead of the Chuseok holiday, individual investors generally tend to hesitate to buy. Statistically, there is no significant difference in market returns before and after Chuseok, roughly 5.5 to 4.5. Considering potential external risks during the holiday period, a cautious approach is needed rather than hasty purchases. Holiday risks are always latent, so these factors should be fully considered in investment decisions.