10/24 U.S. stocks rise on bullish theme stocks, inflow of expectations for earnings season

U.S. stocks rose amid positive sentiment on liquidity, with JP Morgan saying at the FOMC in October that the Fed would end quantitative tightening. In particular, as quantum computer companies rose sharply due to media reports, leaving behind fears of bubble collapse the previous day, other themed stocks rose, which also had a favorable impact on investor sentiment. Furthermore, backlash buying after individual companies’ earnings reports and the strong performance of semiconductor companies following Oracle’s announcement of Stargate are also favorable to the stock market. In general, the U.S. stock market continued its solid performance after recovering from the fear of bubble collapse the previous day (Dow +0.31%; Nasdaq +0.89%; S&P 500 +0.58%; Russell 2000 +1.27%, Philadelphia Semiconductor Index +2.54%)

• Variants: Key Theme Stocks’ Bullish Factors

Major theme stocks, which rose sharply despite no sales on the previous day, fell sharply, affecting the U.S. stock market on fear of bubble burst. Meanwhile, related stocks rose sharply today. This is in line with the WSJ’s report on quantum computers. As the WSJ reported that the Trump administration has defined the quantum computing industry as a next-generation national strategic technology and is considering financial support in the form of equity investments to related companies through the Department of Commerce, companies related to quantum computers surged. Although Reuters reported that the Department of Commerce is not currently negotiating with any companies, the WSJ reported that additional companies related to quantum computers are discussing funding with the U.S. government, indicating that the negotiations are true. Rather than being interpreted as a short-term misinformation issue, the happening has continued the momentum of theme stocks, and quantum computer-related companies, as well as nuclear-related companies, space development and AI-related theme stocks, are also on the rise.

In recent years, individual investors tend to drive the market’s momentum in major global markets, including the U.S. stock market. The share of trading has increased significantly due to large new inflows during the pandemic, and the trend has expanded further as the company continues to hit record highs. In some reports, individual investors show a risk-seeking trading pattern that follows momentum rather than corporate value, and while 75% of some leveraged products are individual investors, most of the “zero-day options (ODETs) are traded mainly by individual investors. As a result, intra-day volatility tends to increase, and furthermore, strong growth themes such as AI and quantum computers, as well as “meme stocks” centered on online communities, are leading short-term changes through intensive investment

As a result, despite the controversy over the short-term bubble, the U.S. stock market remains sensitive to upward momentum, with related concerns not escalating to fear. This is because positive expectations for a liquidity environment drive investor sentiment. In particular, when JPMorgan mentioned the possibility of a short-term tightness in the money market (such as a sharp rise in repo rates), the market is likely to see an early end to the quantitative tightening (QT), which Powell mentioned in September at the FOMC in October. As the strength of theme stocks is ultimately driven by the power of liquidity, the favorable outlook for liquidity policies, coupled with the strength of theme stocks by individual investors, has a positive impact on the overall U.S. stock market

• Featured Stocks: Tesla Turn Up, Nvidia, Oracle, Palantir, IonQ Bullish

Cars: Tesla Turns Higher With More Focus On The Positive
Tesla (+2.28 percent) declined in earnings announcement amid controversy over profitability. On top of that, the company is also burdened with news on the Cybertruck recall. However, while the momentum of individual investors is still strong, the upward shift is paying more attention to future values such as mentioning mass production of driverless self-driving cars. In particular, Cantor raises its target price to $510 from $355, showing its strength to eventually succeed in shifting upward. Manufacturers such as GM (-0.68%) and Ford (-0.97%) fell due to poor performance by automotive parts retailers. O’Riley Automotive (-2.90%) said consumers’ spending was becoming more cautious, followed by a slump by news of bankruptcy of its supplier Post Brands. Uber (+2.60%) rose after Nvidia announced it was working with Uber to develop self-driving cars.

Secondary Battery, Lithium-Related Stocks: QuantumScape Rises Significantly On Good Earnings Release
QuantumScape (+7.95 percent) rose sharply as Deutsche Bank raised its target price to $10 from $8 following a reduction in losses and third-quarter deliveries of key samples in its earnings report. Albemarle (6.67 percent) rose sharply due to strong carbon lithium prices, while lithium America (-3.14 percent) fell in the market, a mixture of lithium-related companies. Rare earth stocks such as Critical Metal (-9.37 percent) and MP Materials (-1.93 percent) are still being digested. Alcore (+12.59 percent) surged on the analysis that rising prices paid by buyers of aluminum in Canada are covering tariff costs despite the increased anxiety over its future prospects

SEMICONDUCTOR: Intel is up around 7% on strong after-hours EPS results.
Nvidia (+1.04%) rose as major companies announced earnings to expand sales in the cloud sector. On top of that, expectations for large-scale capital expenditures ahead of next week’s earnings announcement of large tech stocks are also positive. Ram Research (+4.45%) rose, reflecting its solid performance, although the high proportion of China is an unsettling factor. Major semiconductor companies such as TSMC (+0.64%) and Micron (+4.15%) are gaining as buying flows in on Oracle’s data center construction and data center expansion expectations. The Philadelphia Semiconductor Index rose 2.54%. Meanwhile, Intel (+3.36%) rose 7% after-hours as it reported solid earnings results, with its gross profit margin reaching 40% after the market closed

AI Servers: IBM Slips On Slack In Core Software Segment
IBM (-0.87%) fell due to sluggish growth in its core software sector, which is emerging as the next-generation food despite better-than-expected performance. However, the decline was reduced due to the influx of buying amid expectations for the AI industry. Super microcomputer (-8.72%) has forecasted sales of 6-7 billion won