Today, let's talk about our stock market a little later. So many people are struggling right now that I can't just lie here in my room and play games. Therefore, I have brought you the U.S. July employment report, which will serve as another hint for the Federal Reserve's September interest rate decision. First of all, the non-farm payroll and the unemployment rate are crucial headline numbers. The unemployment rate came out at 4.3%, which is higher than the expected 4.1%. Both figures have completely shattered expectations. The Federal Reserve's confidence in achieving full employment is now being shaken to its core. 

Next, the non-farm payroll increase was expected to be 176,000, but the actual result was a disappointing 114,000, which is not just a minor shortfall; it indicates that we are truly on the brink of a recession.

A forecast has come out. The initial reaction to this is that the current U.S. futures index, Nasdaq, has completely plummeted. Meanwhile, the dollar index, which indicates the value of the dollar, is falling as expectations for Federal Reserve interest rates rise, but it hasn't dropped significantly. We are currently in a state of confusion between a genuine U.S. recession and the Federal Reserve's interest rates, trying to find a balance. Just the other day, right before the FMC meeting, we were hoping that economic indicators would fail so that we could extract higher interest rates from the Federal Reserve. We even prayed for poor employment figures, and now, suddenly, our stance has changed. The employment indicators have indeed failed as we wanted, but this is not being treated as good news for interest rates. Instead, the U.S. political futures are panicking.

If this continues, the best-case scenario right now is that the U.S. market rebounds significantly today, and then we can also see some recovery next Monday, at least partially, to stabilize the sharp decline we’ve experienced. Now, coming back to our stock market, it was, in a word, a black Friday. In English, it’s called Black Friday, which in the U.S. is a good day right after Thanksgiving. However, in Korea, this black Friday has turned into a day of despair, with almost all major sectors experiencing a sharp decline like today. It’s truly astonishing that, even though there’s no new outbreak of COVID-19, Samsung Electronics fell by 4%, and SK Hynix dropped more than 10% in just one day. Other semiconductor equipment stocks, small and medium-sized companies, and even other representative stocks from related sectors are all in a dire situation.

It was a difficult situation. In fact, it's only been two days since the Federal Reserve's FOMC meeting. On the first day, there was a surge due to relief, but today, it has dropped by 2.5 times that amount. However, amidst this, there is some consolation in the fact that the Nikkei 225 index in Japan fell by a staggering 5.8% in just one day, marking the largest drop since the COVID-19 pandemic. So, is the real reason for this the return of the yen carry trade, or is it because the PMI index in the U.S. came out with shocking levels last night, causing concerns about the economy to suddenly loom like dark clouds? Specifically, how much Japanese capital is actually in Samsung Electronics, and how much selling pressure was there today that caused Samsung Electronics to drop below 80,000 won? We cannot help but consider a kind of domino effect in this situation.

Currently, regarding the unwinding or rewinding of the Fed's policies, it seems that over the past two weeks, Wall Street's liquidity addicts have been engaging in self-harm in the stock market, almost like an autoimmune disease. As a result, they finally received hints from the Fed about a potential interest rate cut in September. This learning effect seems to be influencing the Bank of Japan's decision to delay interest rate hikes as much as possible. To prevent this, they might be orchestrating attacks on the Japanese stock market, as well as our KOSPI and the Taiwanese stock market. However, in the case of the Japanese stock market, it has recorded a 50% increase compared to the lows during the COVID-19 pandemic, and the Taiwanese stock market has seen an 80% increase from its pandemic lows. In contrast, our KOSPI has only increased by about 20%.

I barely managed to get through it. However, there are places in the Asian stock market that are even worse than ours, specifically the Shanghai index in China. That said, we shouldn't feel superior or think that our K-index is doing well compared to others. When looking at the overall market capitalization of indices like KOSPI and KOSDAQ, we can see that the various stock splits and numerous IPOs of all kinds of companies have negatively impacted the index. In the midst of this, I feel a bit guilty about two things. First, a subscriber commented just yesterday, asking if it’s time to sell Samsung Electronics since it has been stagnant for several years. I usually hold onto such stocks for years, but I just couldn't take it anymore and decided to let it go.

I don't know, but if I just sell one day, the very next day it starts to rise. Then it breaks through the previous high. I commented on this, but today, how did 80,000 suddenly collapse? It's not that we should be buying in fear like in the stock market; it's not exactly fear right now, but the supply and demand situation is temporarily a bit messed up, making it hard to see the effects of dollar-cost averaging. 

Secondly, I feel sorry that earlier this week, in a foreign report, I mentioned that the HBM theme and the new stock called Tech Wing were recommended for purchase. However, today it dropped 15% in just one day, which would have been considered a bottom-out in the past. Although all K semiconductor stocks are not doing well today, on top of that, it’s even worse.

Techwing reported a loss of 10.8 billion in its derivative trading, and since the official announcement, there has been a strong reaction. People have been saying that the KOSDAQ is not worth it, or that no matter how hot HBM is, if it’s not a leading stock, it shouldn’t even be looked at. This criticism has been quite severe. As a result, Techwing's stock price has plummeted. There’s an old saying that if you make a bad match, you’ll get slapped, but I haven’t even benefited from Techwing’s situation. However, for those who were upset today after reading foreign reports about Techwing, I understand your frustration. If you want to vent your anger at me today, I’ll gladly accept it. I hope that by expressing your frustration towards me, you can find some relief. Nonetheless, I...

I still believe that the stocks introduced in the foreign report will be a good investment, so I will make sure to confirm this with you over time. Now, let's discuss the reasons for the sharp decline in the KOSPI and KOSDAQ, particularly focusing on semiconductor stocks. This can be summarized in three points. First, we need to understand the reasons behind this decline, as resolving each issue will help us gauge when a rebound might occur.

Looking at the situation, Intel, which announced its earnings report early this morning, revealed a shocking second-quarter performance. In just one quarter, it reported a net loss of $1.6 billion, which is approximately 2.2 trillion won. Additionally, its semiconductor contract manufacturing division incurred an operating loss of $2.8 billion, or about 3.84 trillion won. As a result, Intel has announced a 15% workforce reduction and stated that it will cut dividends starting from the fourth quarter.

This time, there was a bombshell statement along with the performance results. As a result, Intel's stock plummeted by 24% shortly after the earnings announcement. However, I find it hard to understand because if Intel is struggling, our Samsung Electronics actually had a complete surprise with its performance in the second quarter, and we are, of course, providing dividends. So, shouldn't this be seen as good news for us, leading to a surge instead? There was a time when people talked about the Intel effect, but as Intel's status has declined, that expression has quietly disappeared. Nevertheless, today, the Intel effect has turned into a significant negative impact for us. Now, regarding Intel's situation, how will our Samsung Electronics and SK Hynix respond in this shared crisis?

I looked into the reasons behind the recent developments, and it seems to be largely due to the Biden administration's chip subsidies. Naturally, Intel is one of the companies eligible for these funds, and they made significant investments based on that expectation. However, there are warnings that if things go wrong, they could lose not only the subsidies but also their own capital investment costs. 

If we look at the K-battery sector, just considering LG Energy Solution, they reported a 200 billion won loss in the second quarter without the benefit of the U.S. IRA subsidies. This raises similar concerns, which may have shifted focus to semiconductors. 

Currently, Intel's stock price is at $21, which is reminiscent of the summer of 1998, marking a return to levels not seen in 36 years. This situation makes one question the viability of long-term investments in U.S. stocks, even in the Nasdaq.

It's not that you have to eat everything; stocks are indeed risky assets. For instance, if we consider Samsung Electronics, if you had been investing the same amount every month since January this year, as of today, you would just be breaking even. This means that the returns are lower than the interest from a parking account. So, no matter how consistently you invest through a regular savings plan, when the principal accumulates and the total value increases, the fluctuations we see today are ultimately the same. Now, regarding today, after Black Friday, the second reason is that the Bank of Japan has officially announced an interest rate hike, which is causing a return of the yen carry trade that had been flowing out globally. Many people are now questioning this scenario. This is the second reason I pointed out, and as I mentioned yesterday...

This seems to contain some fiction. The yuan is strong against the dollar, while our won is weak. However, if we look at today's won-dollar exchange rate, both the dollar and the won have fallen equally. This means that the won was strong just like the yuan, and at least we cannot say that carry funds have left Korea. This is because if you were to sell won to buy yuan, the won would not show strength. Moreover, while it is true that some carry funds may have flowed into our K-stock market, particularly in semiconductors and secondary batteries, most of the carry funds actually went into the U.S. Treasury market. This is where the menu aligns; the nature of the carry itself is that it is ultimately a safe asset, and that is due to demand. The problem is that since Japan's interest rates are at zero, these funds are parking in U.S. Treasuries, which are in the same safe asset class. If you look around, we can easily understand where...

Now, those who have received land compensation and have a lump sum of money, most of them invest again in land or real estate. Anyway, if the carry trade exits the U.S. market, it should have been expected that U.S. Treasury yields would have surged overnight. However, the prices of U.S. Treasuries actually rose, and the yields fell, didn't they? So, while there may be some large-scale selling by foreigners due to the carry trade, I don't think that is the main reason for today's Black Friday. Of course, the Bank of Japan has been selling off its U.S. Treasury holdings to defend the exchange rate, pouring that dollar into the Tokyo foreign exchange market to intervene. But if Japan raises interest rates, the yen will strengthen, so there will be no need to manage the exchange rate like that anymore.

Since there is no longer a need for the Bank of Japan to sell U.S. Treasury bonds, it is interpreted that the prices of U.S. Treasuries have risen and interest rates have fallen due to this outlook. However, this is merely speculation and just a trade; one must wonder how long this will last. Another concerning aspect is that whenever the carry trade begins, one must consider the scale of it. To even attempt to understand this, we need to know the amount involved, but currently, it is difficult to even calculate that amount. The Bank of Japan likely does not know how much of the total amount they have issued is circulating outside the country. Additionally, they may not have a clear idea of how much carry trade money will flow back into Japan when interest rates rise, both for the first and second increases. This uncertainty has been present since the time of the Watanabe woman in the 1990s.

At that time, the Watana women primarily invested in overseas real estate and U.S. stocks. Then, with the start of Abenomics, there was an enormous amount of institutional funds involved in carry trades. Abenomics began 12 years ago, and this also coincided with the maturity of U.S. Treasury bonds and a significant demand for bonds in Europe and various other markets. It’s likely that calculating all of this is quite difficult. This kind of uncertainty is precisely what is considered a negative factor in the financial markets. I noticed that a domestic securities firm showed the decline in the KOSPI due to the outflow from yen carry trades in stages. However, until now, the yen carry trades have been influenced by external factors, particularly from the U.S.

During financial crises or situations like the Eurozone crisis, when countries like the PIIGS face defaults, there is often a surge in demand for ultimate safe assets like the yen. This was the case with the yen carry trade. However, this time, the Japanese government is voluntarily raising interest rates as part of its inflation measures. Therefore, the decline in the KOSPI should correspond to the rise in the dollar, but that is not happening. In fact, today, the Japanese stock market is plummeting twice as much as our K market, which I see as part of the uncertainty. 

Additionally, the third reason suspected to be behind today's K market decline, often referred to as Black Friday, is the manufacturing PMI from the U.S. for July, which came in at a disappointing 46.8%. This figure is below the benchmark of 50, indicating contraction rather than expansion, and it is also down from last month's 48.5%.

The expected figure of 48.8 has significantly fallen short, indicating poor performance. So, if a recession occurs in the United States, no matter how much the Federal Reserve lowers interest rates in September to ease liquidity, and regardless of how hard Wall Street liquidity addicts crunch the numbers, it seems that the money coming into their pockets will drastically decrease or might even be almost nonexistent. This is the third reason. However, I believe we need to think carefully about this. Every time the possibility of a U.S. recession becomes a reality, the asset that reacts most sensitively worldwide is the South Korean won. In the foreign exchange market, it's referred to as KRW. As I mentioned earlier, the exchange rate has dropped today, indicating a strengthening of the won against the dollar. And with the assumption that if the U.S. faces a recession, AI, semiconductors, and everything else will not sell,

Last night, following the disastrous results of the US PMI, the Morgan Stanley analysis report was released. As you know, after the FMC meeting, the Indian market rose by 12% but then fell by 6.7% yesterday. However, Morgan Stanley, which had previously predicted that the memory semiconductor winter was coming, not only pinpointed the timing but also accurately forecasted that it wasn't just a winter but an ice age that was approaching. They have now classified the current decline in Nvidia as a good buying opportunity. In fact, Morgan Stanley removed Western Digital, which had been a topic in the AI theme, and replaced it with Nvidia just yesterday, setting an overweight investment rating with a target price of $144. In this volatile situation, they are suggesting a potential upside of 40%. The basis for this is that customers are increasingly adopting generative AI.

A clear intention to continue investing resources in AI development has been confirmed from my side. How are you today? I will refrain from discussing market information today, but tomorrow we will have a break, so there will be no foreign reports or news. However, what I can say at this point is that a downturn typically arrives not with screams, but with sighs. What this means is that sudden drops, like today, are not usually precursors to a bear market. A true bear market, as I mentioned earlier, would come with screams, which is what we would expect on a day like today. Instead, it arrives with sighs. If we look back at the last Nasdaq crash, there were countless instances of false hope. For a few days, it would drop about 5%, then rebound by around 3%. People would think the correction was over and jump back in, only for it to drop another 10%. So now...

After being fully submerged, there is a rebound of about 7%. Then, you think, Wow, this is really the time to buy at a low price, and you jump in. After that, you pull out with a 15% profit. It really flowed like a gear for a year and a half. That is exactly what a bear market is. So, instead of screams, it was said that we would hear sighs. However, back in the 1920s during the Great Depression in the United States, during Black Monday, there was no internet or smartphones, so everyone was looking at the same information and had to follow the same positions. This created an environment where proper buying at low prices or supply and demand could not be established, which is different from now. According to statistics related to the K stock market, since 2010, there have been a total of 34 instances where the KOSPI fell more than 3% in a single day, like today. In such cases,

A week later, the KOSPI rose by 0.5%, a month later by 3.1%, and three months later by 12.7%. This indicates that there has never been a case where the KOSPI continued to decline after a sharp drop of 3%. So, even if we look at the fundamentals, if the U.S. truly falls into a recession and the Fed then decides to lower interest rates under the pretext of economic stimulus, the current benchmark interest rate is 5.5%. However, if they lower the rates three consecutive times from September to December this year, the rate will still be 4.75% at the beginning of next year, which is still high. For major Wall Street players to finance at that existing rate of 4.75%, they will definitely incur financing costs of 6% to 7%. To cover that, the stock market is the only place to generate profits. Additionally, tonight, there will be immediate reports on...

On Saturday morning, I need to check the U.S. market close and watch the earnings reports until the very end. However, the S&P 500 index is currently just about 4% below its peak. Anyway, you all worked hard today, so please take some time to relax over the weekend. I will come back tomorrow evening with a preview of the news to help you cure your Monday blues ahead of Monday. For now, let's look at today's employment figures, and then briefly check the U.S. market close on Saturday morning. Since it's vacation season and the kids are on break, there's no point in showing the family the market performance, as it only leads to collective psychological anxiety. Moreover, spending the first weekend of August 2024 alone in worry won't change anything, and suffering through it won't make a difference.

I will return with a preview of tomorrow's news on Sunday evening. Thank you.

[긴급진단] 美증시 급락, 韓 증시 나락, 日증시 지옥간 이유 '3가지'

진정 무엇을 알아야 하고 몰라도 되는지에 대한 기준

[긴급진단] 美증시 급락, 韓 증시 나락, 日증시 지옥간 이유 '3가지'

Scripts