(U.S. stock market on Thursday, August 8)

(U.S. stock market on Thursday, August 8)

1. Semiconductor industries lead index fall
   The U.S. stock market started a gap-up on the back of Japan’s central bank’s statement that it would readjust its rate hike plan. Analysts say that if the yen’s strength eases, the yen’s trade could decrease.

The U.S. stock market, which started higher, slowed its gains little by little over time, then turned downward as bond rates began to rise as demand in the 10-year Treasury bond bid slowed. The Nasdaq Composite Index turned negative the fastest, with the semiconductor industry at the center. Small cap had the highest drop rate due to rising bond rates.

SMCI’s earnings report showed a sharp drop of -20.14% as its sales increased but EPS decreased from the same period last year. During the conference call, the delay in the release of NVDA Blackwell would not be a big problem for the company’s performance, officially acknowledging the delay in Blackwell. As a result, NVDA -5.12%, DELL -7.16%, Broadcom (AVGO) -5.32%, and MU -2.47%. The semiconductor index also fell -2.75% based on SMH.

The decline in the margin ratio in the SMC’s earnings report raised the question of whether AI, which has become a hot topic in Google’s earnings report, can make money. SMC saw its sales increase significantly, but its margin ratio was only 11.3 percent, a sharp slowdown from 17.1 percent in the same period last year. The previous day, the Palantir overturned the positive theory that AI can make money.

Novo Nordisk (NVO) raised its revenue forecast in its earnings report but announced that it would lower its EPS by -8.37%. This is analyzed to mean competition in the obesity treatment market, with Eli LLY falling -2.65% and Amgen falling -5.05%.

Tesla down -4.4 percent due to negative perceptions of Elon Musk. Elon Musk made a positive comment through X on the recent spread of far-right protests in the U.K. There was a recent killing of three children in the U.K. The culprit was a white British man, but far-right demonstrations were recently spreading due to false videos that far-right YouTubers were Muslim exiles.

Disney (DIS) and Airbnb (ABNB) fell -4.46 percent on the back of sluggish theme-marking business and -13.39 percent on the back of analysis that there are signs of a decline in demand in the future despite good performance. Travel-related airline and cruise businesses also closed lower, with a drop of -3.26 percent and Expedia -3.65 percent. Considering travel demand, the mood should be considered for a possible economic downturn

Oil prices have rebounded by +3 percent on news that U.S. crude oil inventories have declined despite weak demand and news of tensions in the Middle East. The rise in international oil prices has been attributed to the Palestinian militant group Hamas’ choice of hard-line leader Yahya Shinwar as its new supreme leader.

Dow closed -234.21 points (-0.60%), SP500 -40.53 points (-0.77%), Nasdaq -171.05 points (-1.05%), and Russell 2000 -29.19 points (-1.41%) lower.

2. Today’s Strategy
   There are two main reasons for the recent increase in volatility in the stock market. One was the controversy over whether AI can make money. The second was the concern over the U.S. economic recession. The withdrawal of the carry trade due to the strong yen was an auxiliary cause, not a key factor.

For this reason, the index strengthened on news of the possibility of the Bank of Japan suspending interest rate hikes, but I didn’t make any comment on it. In the global economy, the total amount of money is over 60 percent for the dollar and only 5 percent for the yen. No matter how much the yen is applied, it is no longer a seasoning but a spice for the global stock market.

Concerns over a recession and whether AI will become money in the U.S. stock market at dawn have occurred at the same time. In the SMC report, there were no economic indicators of a recession but copper prices fell by an additional -2 percent. This is due to the strong performance of consumer goods and utility industries in the wake of the index’s decline.

This is likely a sense of alert for the CPI scheduled for tonight. Wall Street is expecting a +0.2 percent rise on a monthly basis, as the market is likely to respond downward that a big step is needed to cut interest rates if there is a 0.0 percent or less deflation.

Korea has an option expiration date today. Yesterday, foreigners extended their buying of futures to 12,000 contracts by 2 p.m., driving the index higher. However, at the end of the market, they turned to net selling of 2,600 contracts. Put options, which have become relatively cheaper due to the rise in the index, also closed with net buying of more than 27,000 contracts.

The KOSPI nightly futures closed down -1.53% at night. Given this, today’s index is likely to start with a gap of about -0.5% based on the KOSPI. Since the option expiration date is after that, natural volatility may increase.