August PCE Inflation Below Expectation, Micron Earnings Mixed

In contrast, Q2 saw the company announce earnings that fell short of the market's elevated expectations, resulting in a stock price correction.

Investors, while acknowledging Micron's overall good performance, displayed cynicism and caution regarding the possibility of further stock price declines.

Park Jong-yeon described this as feeling like "a combination of Q1 and Q2."

The 'hold strategy,' which involves lowering expectations and holding silently, is now suggested as an alternative.

Even though Nvidia was expected to achieve a high margin of 85.9%, the market negatively impacted its stock price, citing it as falling short of expectations.

This phenomenon acts as a trigger for large-cap stocks to experience downward pressure when future guidance is presented low, and the 'hold strategy,' where one leaves market reactions to the market and holds silently, has been proposed as an alternative.

Micron's HBM (High Bandwidth Memory) volume is in short supply, with all units sold out until next year, indicating robust demand.

However, market participants are more sensitive to the possibility of 'margin compression' than to sales performance itself.

Even with strong corporate earnings, if signs of margin reduction are detected, stock prices tend to fall. Park Jong-yeon pointed out the market's cold attitude, worrying about margin compression despite the HBM supply shortage.

A fierce battle between supply and demand is occurring in the market to the point where interest rate analysis is meaningless.

The continuous rise in Treasury yields is acting as a major factor hindering the overall supply and demand in the market.

Micron recorded an excellent gross margin of 87% this quarter.

In future guidance, there is a possibility that the margin could decrease to around 86.25%.

Structural adjustments were implemented to address financial difficulties, compounded by rising memory chip prices and declining service revenue.

Memory semiconductor suppliers tend to enter long-term contracts to overcome the limitations of the cyclical industry.

Conversely, demand-side companies aim to set a price ceiling through long-term contracts to prevent price surges.

Such long-term contracts result in a limited increase in earnings, even if prices rise, due to the contracted price.

August PCE (Personal Consumption Expenditures) inflation data recorded 3.4% year-over-year, significantly below the estimated 3.7%.

Core PCE, excluding volatile energy and food, matched expectations at 3.3%, and consumer spending increased by 0.6% in August.

Despite PCE inflation being lower, market interest rates initially fell briefly before rebounding to around 5.3%.

According to CME FedWatch, the probability of an interest rate freeze in October stood at 63%. With inflation data slowing, expectations for interest rate hikes significantly decreased.

Goldman Sachs postponed its forecast for interest rate cuts to December. Even though interest rates have risen again, the focus remains on an October rate freeze.

Gemini 4 was shown to outperform the existing Astra model in benchmark performance.

However, specific release dates have not yet been announced.

Industry leaders including Zuckerberg, OpenAI, Musk, and Huang have agreed on a pact focused on the responsibility of technology development companies and strengthening independent external evaluations.

The agreement includes responsible deployment and accountability for technology development companies.

It also outlines efforts to ensure the safety of AI technology through enhanced internal controls and independent external evaluations.

The 10-year yield recorded its largest increase since 2016, and the 2-year yield since 2023, pressuring the market.

The 10-year yield recorded its largest increase since 2016, and the 2-year yield since 2023, while the S&P 500 equal-weighted index fell for seven consecutive weeks, showing similarities to the 2002 and 2022 bear markets.

Market downside pressure intensified, with the percentage of stocks above their 50-day moving average plummeting from 70% in August to 25%.

The Consumer Price Index (CPI) announcement is scheduled for October 14, and after this indicator is confirmed, the earnings season is expected to accelerate further.

With GTC Berlin held on October 21, AI-related expectations remain valid, and Anthropic's IPO is scheduled around the November 3 midterm elections.

Elon Musk outlined an energy business blueprint, targeting 200GW of solar power annually and emphasizing orbital computing. The $30 billion raised will be primarily invested in AI and robotics.

Elon Musk presented an annual solar power generation target of 200GW and highlighted the importance of orbital computing.

This is positive news that could impact the solar and space-related sectors.

Consequently, Apple will implement workforce restructuring.

This restructuring is an unavoidable decision due to worsening financial conditions. Apple aims to achieve cost savings and normalize management through this.

Moderna's stock price surged over 200%, raising concerns about valuation overestimation.

As a result, the investment opinion was downgraded from 'Neutral' to 'Sell'.

This investment is a result of efforts to strengthen US energy security and reduce carbon emissions.

A project to build 8 reactors, including two AP1400 designs, has been formalized. The US government announced plans to invest $120 billion in this project.

Two of the reactors to be built will use the AP1400 design, but specific project details are still undecided.

This investment is seen as part of the US's efforts to enhance energy security and reduce carbon emissions.