QCP Market: CPI and Oracle earnings reports loom, market faces multiple risks.
Related
South Korean stocks plunge 20%, nearing a bear market; the AI boom faces the awkward situation of "the more disastrous the earnings, the steeper the decline."
According to BlockBeats, on Wednesday afternoon, July 8th, South Korean stocks extended their losses as investors reassessed the outlook for AI demand. The KOSPI index fell by more than 6% at one point, breaking below 7200 points, and has cumulatively fallen by more than 20% from its all-time high last month, poised to enter technical bear market territory. Memory chip maker SK Hynix fell by as much as 5%, and Samsung Electronics fell by 6.9%. The Korea Exchange initiated a temporary trading halt on the KOSPI index, suspending algorithmic trading. South Korean stocks were among the strongest performing markets globally this year, but their performance is highly dependent on SK Hynix and Samsung Electronics, amplifying volatility when sector sentiment weakens. Even with Samsung Electronics announcing a 19-fold surge in quarterly profits earlier this week, chip stocks continued to be under pressure. Jordan Klein, a TMT sector expert at Mizuho Securities, stated that investors overreacted to Samsung's preliminary second-quarter results. He believes this sell-off in semiconductor stocks is more a sign of waning momentum than a deterioration in fundamentals. Klein stated that excluding one-off bonus expenses, Samsung's operating profit actually significantly exceeded expectations, with its storage business implied operating margin potentially exceeding 80%. He indicated that Samsung's single-quarter operating profit has already surpassed the total of the past three years, and reacting to Samsung's stock price based solely on preliminary results is "extremely short-sighted." Meanwhile, an AI trading rotation occurred in Asian markets. Hong Kong-listed Chinese stocks rose, with the Hang Seng China Enterprises Index rising as much as 3.4%, the Hang Seng Tech Index rising over 5% intraday, Alibaba rising over 8%, and Tencent rising over 3%. Market analysts believe that funds are flowing from crowded trades focused on AI infrastructure to markets with lower valuations and more value-oriented characteristics. Reuters' report on DeepSeek's self-developed chip and The Information's report on Zhipu AI considering designing its own AI chip further fueled this rotation. (Jinshi)
US pre-market news at a glance: Samsung's earnings report triggered a collective weakness in semiconductor stocks in pre-market trading; SpaceX officially debuts on the Nasdaq 100 today.
According to BlockBeats, the following are key market news items before the US stock market opened on July 7th: 1. Samsung released its Q2 earnings forecast, showing an operating profit increase of over 1800% year-on-year, with single-quarter profits exceeding the total of the previous three years. Simultaneously, the company's revenue also increased by 129% year-on-year, reaching 171 trillion won. Affected by the semiconductor sell-off triggered by the "sell-off" of Samsung's earnings, chip-related technology stocks generally weakened in pre-market trading. The three major US stock futures indices showed mixed results in pre-market trading: Dow Jones futures rose 0.41%, Nasdaq 100 futures fell 0.9%, and S&P 500 futures fell 0.09%. 2. SpaceX officially debuted on the Nasdaq 100 before the US stock market opened today, with Wall Street institutions collectively bullish. Most institutions believe that SpaceX is no longer just a traditional aerospace company, but a platform company with the potential for rocket launches, Starlink satellite internet, AI infrastructure, and future space computing. 3. DeepSeek is secretly developing its own inference chip. If successful, this would reduce reliance on external suppliers and give it more cost-effective hardware control. However, the project is still in its early stages and faces manufacturing and memory acquisition restrictions due to US export controls. 4. UBS recommends investors buy SK Hynix's upcoming American Depositary Receipts (ADRs) and sell its South Korean shares, as these new shares are expected to trade at higher prices. 5. JPMorgan strategists say the recent weakness in semiconductor stocks should be seen as a buying opportunity, as the chip upcycle is not yet over, and truly meaningful new supply may not appear until 2028. 6. US ADP employment change for the week ending June 20 was 21,000, compared to 30,750 in the previous week. 7. BlackRock will launch an ETF tracking the tech-heavy Nasdaq 100 index, aiming to meet investors' growing demand for participation in the AI-driven stock market rally and challenge Invesco's dominant position. 8. Amazon is returning to the US bond market to raise funds for its artificial intelligence infrastructure. The company will issue eight benchmark bonds with maturities ranging from 3 to 40 years, raising at least $25 billion in the dollar bond offering. 9. Global brokerages have begun coverage research on Elon Musk's SpaceX (SPCX.O), and a preliminary consensus has formed on Wall Street: buy the stock. At least six brokerages, including Morgan Stanley, Goldman Sachs, and UBS, have given it a buy rating, optimistic about its long-term growth prospects, although doubts remain about profitability and valuation.
The protagonist of ByteDance's stock trading success story: CPI, non-farm payroll data, etc., are not just market noise; he previously suffered a significant drawdown in his Nvidia investment due to ignoring the interest rate hike environment.
According to BlockBeats, on July 5th, Leto Bao, the protagonist of the "ByteDance stock trading 30 million yuan" story, reviewed his journey to a 30 million yuan fortune in the US stock market on Binance Square. He stated that CPI, non-farm payrolls, and Federal Reserve policies are all macroeconomic factors, while earnings season reflects the performance of specific companies or industries, and also reflects changes in the macroeconomy. Leto Bao stated that the CPI (Consumer Price Index) is one of the key indicators monitored by the Federal Reserve. A high CPI usually indicates greater inflationary pressure; a low CPI may reflect deflationary pressure. The Federal Reserve's long-term goal is to maintain inflation at around 2%, which represents a moderate inflationary environment, meaning a slow depreciation of the currency, while investment, consumption, and credit activities are relatively healthy. Non-farm payroll data also influences market judgment. There is a certain correlation between overheated employment and inflation, but the relationship between macroeconomic indicators is complex and not a simple linear deduction. The Federal Reserve is responsible for formulating economic policies related to interest rates and serving the US economy through policy adjustments. Leto Bao believes that CPI, non-farm payrolls, Federal Reserve policies, and earnings season should not be simply dismissed as "noise," but all have some reference value. He mentioned that when he previously invested in Nvidia, he ignored the broader interest rate environment, leading to a significant drawdown in his account. Therefore, macroeconomic factors still need to be incorporated into investment decisions. Leto Bao is a former employee of ByteDance, known as the "ByteDance Stock Investor." He reportedly made substantial profits (around 30 million RMB) by investing in the AI storage sector in the US stock market and subsequently resigned. The story began when he noticed an abnormal price increase when buying hard drives on Pinduoduo, which prompted him to research data storage needs and heavily invest in related stocks.
Bloomberg ETF analyst: US stocks are "too big to fail," and the Federal Reserve may purchase stock ETFs to rescue the market.
PANews reported on July 7th that Eric Balchunas, senior ETF analyst at Bloomberg, released research stating that the US stock market is gradually becoming a de facto "retirement fund" for Americans. With approximately 55% of Americans holding stocks and the "Trump Accounts" program expected to add about 28 million new investors, the link between the stock market and household wealth, pensions, and social stability is becoming increasingly close. He believes that in the next major bear market, the Federal Reserve is highly likely to purchase stock ETFs for the first time to stabilize the market, similar to its purchase of corporate bond ETFs in 2020, and the actions of the central banks of Japan and China. Balchunas believes that future political pressure will make a prolonged bear market increasingly intolerable, and the continued inflow of funds into ETFs on dips and investors' widespread expectation of government intervention also reflect this trend.
The market ignored Samsung's impressive earnings forecast, and Samsung Electronics opened down 3%.
According to BlockBeats, on July 7th, based on Bitget market data, the South Korean KOSPI index opened down 96.78 points, or 1.2%, at 7954.55 points on Tuesday, July 7th. Samsung Electronics fell 3%, and SK Hynix fell 1%. Previously, Samsung released its Q2 earnings forecast, showing that its operating profit increased by over 1800% year-on-year, with single-quarter profit exceeding the total of the previous three years. At the same time, the company's revenue also increased by 129% year-on-year, reaching 171 trillion won.
Bitcoin bullish sentiment was supported by a decline in inflation expectations, with the market focusing on the July CPI data.
According to Mars Finance, the cryptocurrency market continued its stabilizing trend, with Bitcoin rising nearly 7% in the week ending July 5th, marking its strongest weekly performance since March. This surge was primarily driven by declining inflation expectations. The break-even inflation rate, a measure of market inflation expectations, has recently declined significantly, with the two-year indicator falling below 2%, approaching the Federal Reserve's inflation target level, and long-term inflation expectations also weakening. Simultaneously, WTI crude oil prices have fallen in tandem with inflation expectations, dropping to levels similar to those before the geopolitical conflict in February, prompting the market to reassess inflationary pressures, interest rate cut expectations, and the dollar's trajectory. Some analysts believe that a weaker dollar index (DXY) will further reduce resistance to Bitcoin's rise, as the two typically have a negative correlation. However, others caution that service sector inflation remains sticky, and declining oil prices do not necessarily indicate a reversal in the overall inflation trend; monetary policy may continue to maintain a "higher and longer" stance. The next key market juncture is the US June CPI data on July 14th, which could be a crucial catalyst for determining the inflation path and the direction of risk assets.