Prolonged Iran risk and a Treasury buyback that fell short of expectations fueled market instability.
Brent crude surpassing $100 has heightened concerns about further price increases. Prolonged Iran risk and the absence of a negotiation table are cited as major causes. Geopolitical risks, including tanker attacks, also persist, pushing Brent crude prices to a four-month high.
Concerns about prolonged Iran risk are the biggest variable driving oil price increases. After the collapse of the 60-day ceasefire agreement, even a negotiation table has not been set. Repeated tanker attacks put upward pressure on oil prices, with Brent crude reaching $100-$101.
It is analyzed that without the attack situation, oil prices would likely have remained in the mid-$80 range.
Goldman Sachs' forecast of $120 oil prices is predicated on additional attacks on refinery facilities, an escalation of conflict, and a prolonged blockade of maritime traffic in the Strait of Hormuz. If such a situation persists for 3-6 months, breaking $100 is considered only a matter of time. However, given the US November midterm elections and political burdens, a cautious approach is needed to reach $120.
The market had expected over $7 billion to have some effect on interest rate reduction, but the lower-than-expected amount led to rising interest rates. The buyback is a policy that temporarily defers sharp interest rate hikes, and the key is a fundamental policy to expand demand for US Treasuries.
The unveiling of this iPhone 18 model is notable for its premium foldable phone being revealed for the first time, instead of a standard model. The crucial factor is how much replacement and new demand it can secure to show initial strong sales. Currently, foldable phones account for about 3% of total smartphone shipments, so the direct stock price impact may be limited, and there are concerns about supply delays due to memory shortages.
Meta's announcement of its new AI agent 'Muse' provides clues to AI monetization and shows that AI agent technology is approaching. However, concerns about Broadcom's data center construction delays and AI regulatory issues persist ahead of the midterm elections. Debt financing based on interest rates and Nvidia's investment platform ($500 million) operations are also variables.
This is interpreted as a movement of standby funds due to macroeconomic instability. Ultra-short-term bonds have the characteristics of an extreme safe haven asset and reflect the flow of funds awaiting future market direction.
This Friday's CPI announcement and next week's FOMC are key variables that will determine market direction. Once these macroeconomic events are digested and market uncertainty is resolved, funds that had sought refuge in ultra-short-term ETFs are expected to gradually flow back into the market.
Investments in enhancing computing power for advanced AI model services are expected to become more active. The release of Astra confirmed a surge in demand for computing power, and the data development requirement is projected to expand from the current 100,000 units invested to 400,000 units.
The power equipment sector recorded its highest-ever cumulative order backlog until the first half of the year. This serves as a major justification for reflecting performance, driven by the AI data center demand trend. Increased power demand from AI data centers is also boosting demand for distributed power and control device companies (such as SFC). Stable performance growth for the power equipment and distributed power generation sectors is expected over the next 2-3 years.
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