03/18 Weekly Issue Check: FOMC, BOJ Meetings, And Micron And Chinese Companies Earnings

Central Bank: There are monetary policy meetings between Japan and Australia on the 19th (Tuesday), the U.S. on the 20th (Wednesday), and the U.K. central bank on the 21st (Thursday). Market participants predict that the dot plot, or interest rate outlook, will change at the FOMC, but concerns that it could be lowered from three cuts to two are reflected in recent financial markets. However, some investment companies predict that they will maintain the number of rate cuts three times, considering the slowdown in real indicators and the fact that it has not been long since the March meeting. Therefore, increased volatility due to the FOMC is inevitable.
At the same time, attention is being paid to the BOJ meeting in Japan, because there is a possibility of resolving negative interest rates (interest rate hikes) and government bond interest rates. Market participants predict that interest rates will be raised with a 57% probability, in which case the yen will strengthen and the interest rate on Japanese government bonds will rise. This is because market participants’ attention is focused on the fact that it could lead to a rise in interest rates on US government bonds (decrease in bond prices) and a weakening dollar.

Earnings: Micron (MU) announced its earnings results after the market closes on the 20th (Wednesday). Recently, many investment companies raised their investment opinions and target stock prices, saying that recovery of gross margins will be strengthened due to the optimized portfolio of products such as DRAM and HBM. As the earnings are announced in the meantime, market participants are predicting that the results will exceed expectations (EPS-$0.26). In addition, it is necessary to pay attention to semiconductor-related stocks after the related announcement, as it will include information suggesting prospects for the semiconductor industry.
In addition, performances of Chinese companies such as Chinese electric car maker Xiaopeng on Tuesday (Tuesday) and Chinese online retailer Pinduoduo (PDD) on Wednesday (Wednesday) and Nike (NKE) on Thursday (Thursday) show their consumption patterns in China. On top of that, the global economy can be predicted through the performance of logistics company FedEx on Thursday (Thursday).

03/18 (Monday)
China: Retail Sales, Industrial Production, Fixed Assets Investment
US: Housing Market Index
Events: Nvidia GTC (~21st), World Petrochemical Conference (~22nd)
Remarks: NVIDIA CEO Jensen Huang speaks at GTC (5:00 a.m. on the 19th in Korean time)

03/19 (Tue)
Germany: ZEW Economic Expectations Index
United States: Housing Construction, Number of Permits
Bonds: U.S. 1-year, 20-year Treasury tenders
Meeting: Japan (BOJ), Australia (RBA) Monetary Policy Meeting
Events: Nvidia GTC: Accelerated Computing, Generative AI, Robots Announce
Earnings: XPEV, Tencent Music (TME)

03/20 (Wednesday)
China: LPR Rate Decision
Germany: Producer Price Index
Meeting: FOMC
Speech: Fed Chair Powell
Companies: Broadcom (AVGO): Holding an AI-activated investing day, pricing Reddit (RDDT) IPO
Earnings: Micron (MU), Pinduoduo (PDD), Jinkosola (JKS), KB Home (KBH), Chewy (CHWY)

03/21 (Thursday)
Eurozone: Manufacturing, Services PMI
US: Manufacturing, service PMI
US: Number of existing home sales, leading economic index, Philadelphia Fed index
Meeting: UK (BOE) Monetary Policy Meeting
Earnings: Exenture, Nike (NKE), FedEx (FDX), Lululemon (LULU)

03/22 (Fri)
Germany: Ifo Business Environment Index
Meeting: EU Summit (~22nd)
Remarks: Bostic Atlanta Fed President As the dot-com bubble burst and Internet-related stocks wriggled, Korea was groaning inside the IMF financial crisis. The KOSPI was trading between 300 points and 600 points. Then, as the current account surplus ballooned and the Korean Peninsula began to recover from the trauma to some extent, the dot-com bubble made its way to the Korean Peninsula.

The early 1990s version of the dot-com bubble NVIDIA was Cisco. Every time I released an earnings report for several years, I laughed at the market forecast and became a winner. Nowadays, it was a company that used to make extremely primitive communication equipment such as modems and routers. Of course, it was cutting-edge at the time. What was the ranking of the market capitalization? In early 2000, the market capitalization ranking was third, and the PER was almost 200 times higher.

Microsoft was a regular on the Top 10 along with Cisco, but few other bubble leaders at the time survived and were in the spotlight. Amazon is the stock market leader, while Magnificent 6 is the new face. In Korea, the market has changed its name and turned into a small company, and Daum was merged into Kakao.

Currently, the PERs of NVIDIA, TSMC, and microcomputers, which are AI leaders, have not yet exceeded 100 times, and their earnings growth is continuing. It seems that the state of revolutionary technology that will incorporate AI technology into reality has not yet begun. It will go through ups and downs, but it seems premature for the AI bubble to burst. Of course, there is no 100% accurate prediction in the stock market. The end of the bubble is unknown until it bursts. With the AI phenomenon of all kinds of money gathering, AI bubbles will float and soar into the sky for the time being.

For the time being, it can be days, months, or years. The key is whether earnings growth will continue. It seems clear that this year will not be March 2000, when the dot-com bubble ended. We need to pay a lot of attention to both AI stock prices and performance.