US Stock Net Buying Surges 4x: Key Points for July FOMC & Big Tech Earnings
As domestic investors' net buying of US stocks surges over 4x, the upcoming July FOMC and big tech earnings reports, including Microsoft and Apple, are expected to be key market turning points.
US Market Migration: Why Retail Net Buying Surged 4x
Recently, domestic investor deposits have fallen to the low 100 trillion won range, marking a 5-month low and signaling a clear trend of capital exiting the local market. In contrast, net buying of US equities by domestic investors has surged by more than four times the usual average. This massive capital migration heavily contrasts with the domestic KOSPI, which recently closed down 1.91% due to semiconductor sell-offs and geopolitical uncertainties in the Middle East.
Markets on Edge Ahead of July FOMC Rate Decision
Next week's July Federal Open Market Committee (FOMC) meeting is considered the most critical event that will determine the stock market's trajectory for the second half of the year. Amid lingering inflation concerns, market participants are laser-focused on whether the Fed will hold rates steady or provide a clear signal for a rate cut later this year. If rate cut expectations diminish, further valuation adjustments for highly valued Nasdaq tech stocks appear inevitable.
Big Tech Earnings on Deck: Microsoft and Apple
With major semiconductor stocks, including Nvidia, suffering sharp declines due to 'peak-out' concerns, attention is shifting to the upcoming earnings reports from tech giants like Microsoft and Apple. As doubts grow regarding the sustainability of AI investments, tangible metrics on AI monetization and forward-looking guidance will be the key variables dictating the future flow of technology stocks.
FAQ: Top Questions from Investors
- Q. How long will this heavy concentration in US stocks last?
A. Given the range-bound nature of the domestic market and disappointment over corporate value-up programs, the preference for US equities is likely to continue in the short term. However, diversified investing is required considering exchange rate volatility and US election uncertainties. - Q. Is there a chance of a rate cut at the July FOMC?
A. The current market consensus strongly leans toward a rate freeze in July. The key focus will be on whether Chairman Powell's press conference provides hints regarding a potential rate cut in September or later this year. - Q. What is the best strategy amid the tech stock downturn?
A. Rather than hastily buying the dip during short-term plunges, it is safer to wait for the actual earnings data and guidance from big tech companies next week, focusing selectively on stocks with solid fundamentals.