10/03 Rising on the back of individual stock issues despite economic instability as shutdown continues

Despite concerns about the economy due to shutdowns and employment indicators, semiconductor companies have been strong based on various materials such as OpenAI values, driving the market. Of course, Tesla (-5.11%) rose after the announcement of good vehicle deliveries, but the rise was limited due to lingering issues in individual stocks, such as falling due to profit-taking. As such, the market does not have many upward momentum, but it rises due to the inflow of buying in the second half of the market amid the changing stock market by individual stocks and industries. In particular, small and medium-sized stocks are also strong, with individual theme stocks soaring (Dow +0.17%; Nasdaq +0.39%; S&P 500 +0.06%; Russell 2000 +0.66%; Philadelphia Semiconductor Index)

• Variants: Job Insecurity and Fed, Semiconductor, Tesla

According to the previous day’s ADP private employment report, the number of mass layoffs, which counted more than 10 layoffs, fell by 320,000, continuing the decline for the second consecutive month. Among them, the number of mass layoffs, which counted only 10 layoffs, fell 37% from the previous month to 54,064 in September, but this year’s cumulative number of job cuts reached 946,426, the highest since 2020, showing structural difficulties in the labor market. This is a 55% jump from the previous year and is highly likely to exceed 1 million by the end of the year. The main factors for job cuts were the worsening economic situation and the introduction of AI. On the other hand, this year’s cumulative recruitment plan fell 58% from the previous year to 204,939, the lowest since 2009, indicating that companies are generally very cautious about hiring

Despite this job insecurity, Federal Reserve Bank of Dallas Governor Logan Dallas said today that monetary easing should not be rushed based on solid demand and still high inflation. Most Fed members, including Collins and Williams, acknowledged job insecurity but paid more attention to price stability. Nevertheless, government bond rates tend to be more restrictive or falling rather than rising. This is interpreted as a stronger reflection of economic anxiety concerns than the Fed’s hawkish remarks. Trump’s recent claim of permanent job cuts for government officials in the shutdown has accelerated the fall in interest rates, and in the stock market, financial stocks and others have been digesting sales due to economic instability

The biggest topic in the market today was the strength of the semiconductor industry. This is believed to have driven the market by resolving value concerns for the AI industry. The news that OpenAI has been valued at $500 billion through the sale of old shares has silenced market doubts about the AI industry’s commercial success. In addition, OpenAI’s announcement of a partnership with Samsung Electronics and SK Hynix to supply chips and build a data center related to the ‘Stargate’ project also suggests an expansion of the AI ecosystem and has a positive impact. In the end, the market has put more value to these AI-related materials and quelled the AI bubble controversy. These have already been released, but the market has used the word ‘If’ to recognize all materials as ‘goods’, and the psychological part is estimated to have been the biggest contributor, with strong buying. These psychological factors have driven the strength of semiconductor companies today following the previous day

The fall of Tesla (-5.11 percent) is also one of the characteristics of the market. Tesla reported deliveries of 497,099 units in the third quarter, exceeding market expectations as well as previous quarter and year-on-year results. It hit an all-time high in early trading, but immediately turned downward. This is due to the anxiety factor that the third-quarter delivery was due to the demand shelf life due to the end of the tax credit. As a result, U.S. demand may plunge in the fourth quarter and remain sluggish for the time being. It is also burdensome that there is a lack of additional upward momentum amid the assessment that optimism about self-driving (FSD) technology, which led to the recent stock price increase, has already been largely reflected in the stock price. Furthermore, margin concerns are also burdensome on the prospect of price cuts to offset weak demand amid intensifying competition. After all, the Tesla case shows that the market is currently focusing on “shelf reflection” and “additional upward momentum.” As the U.S. stock market is currently overvalued, it is worth noting that a lack of such additional upward momentum could increase the likelihood of an index decline.

• Featured Stocks: Bitcoin, Semiconductors, Alibaba rise Vs. Tesla, pharmaceuticals fall

Automobiles: Tesla Turns Lower On Profit-Making After Rising On Q3 Deliveries Report
Tesla (-5.11%) saw vehicle deliveries rise 2.5% to 497,099 units in the third quarter, above 440,000 expected by the market, but turned downward. It is assumed that the profit-taking sale was made because it had already been rising near its record high, saying that deliveries would increase significantly ahead of the tax credit. In addition, it fell under the spotlight that deliveries will fall significantly in the fourth quarter. Rivian (-7.39%) delivered 13,201 units, slightly exceeding expectations and consistent with the company’s outlook. Meanwhile, it fell sharply when its forecast for overall delivery for 2025 was slightly lowered. In addition, anxiety in the fourth quarter also declined.

Automobile: Secondary Battery Amid Profit-Realization Attendance, Lithium-Related Shares
GM (-3.23%) and Ford (-0.41%) also went up for sale due to concerns over a sharp drop in electric vehicle sales in the fourth quarter, while Stellantis (+7.88%) rose on the news of a surge in U.S. sales in the third quarter. Ferrari (+2.83%) is also strong. Quantumscape (-1.99%) jumped the previous day amid positive outlook for cooperation with Corning, but fell down for sale today. Lithium America (-2.56%) fell as Kenaccord Genuity downgraded its investment opinion to sell from speculative buy, citing excessive stock price gains. Standard lithium (-0.52%) also shifted downward. On the other hand, lithium-related stocks are mixed, with Albemarle (+3.72%) rising.

Semiconductor: Buy continues to flow, citing OpenAI value
Nvidia (+0.91%) reflects expectations for AI investment as news spreads that OpenAI enterprise is valued at $500 billion