Strong yen and semiconductor demand forecast a stair-step rise in the second half
It is commonly known that the futures market is led by foreign investors, and the options market by institutional investors. Foreign investors bet on a positive future direction in the futures market, while institutions employ a strategy in the options market to generate profit by letting premiums expire at maturity. Intraday volatility appears as an intentional flow to adjust options premiums.
ETFs are structured products designed to buy futures when stocks are sold. Because of this, actual stock spot selling volume does not simply flood the market. The fear of increased volatility just before closing should be seen as excessive concern, and there is no need to worry about a large volume of selling pressure.
This indicates that institutional investors perceived current bond prices as a peak and participated in buying. A high bid-to-cover ratio demonstrates that market participants have an optimistic view of U.S. Treasury bonds. Therefore, the recent rise in U.S. Treasury yields is a temporary phenomenon, and the market is in the process of absorbing it.
Foreign investors' attitude towards Asian markets has recently changed. Previously, a negative view of Asian markets was dominant, but it has now shifted to a positive trend. This change can be decisively found in Japan. The Japanese yen's strengthening from 164 yen to 154 yen has had a positive impact across Asian markets. In fact, over 10 trillion won in net foreign buying flowed into the Taiwanese market in just ten days.
Refining margins, which were only 5-6 dollars last year, have surged to over 30 dollars this year. In addition, the prices of crude oil by-products, naphtha and PE (polyethylene), are also rising. These positive trends are expected to give these sectors a leading position in the market during the second half. It is important to maintain interest in these sectors.
While CPI may temporarily increase due to rent and used car prices, if the inflation-linked figure moves within 3-4% and the unemployment rate is around 4-4.5%, it is within a stable range. The market needs to approach inflation with an upward bias, rather than fluctuating with temporary shocks.
It is necessary to move away from the past notion of KOSPI and KOSDAQ moving like a seesaw. Going forward, a stair-step upward trend, steadily raising the low points rather than surging all at once, is expected. The market will show a gradual ascent within a stable flow. In such a market, a strategy of selecting market-leading stocks is crucial.
The recent selling by individual investors is an unfortunate situation. The global market is generally showing an upward trend. Therefore, it is a period where a 'Buy and Hold' strategy, holding firmly onto investments, is needed to respond to the market, even now.
With the current scale of customer deposits, it is difficult to perfectly break through the entire market's selling pressure all at once. Therefore, stock price movements will proceed in a phase of absorbing selling pressure, with lows continuously rising as the market repeats a process of rising and falling. This stable trend is expected to continue from September to November.
Demand for AI GPUs is exploding, with Nvidia planning to train ChatGPT with 400,000 GPUs. This demonstrates an enormous increase in demand factors and material value aspects for the semiconductor industry. Korea, based on its third-largest GPU holdings globally, can actively participate in this trend. The previously stagnant semiconductor trend is interpreted as turning positive.
Answers come from the transcript, with the exact spot cited.
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