Kospi Has Bottomed On Insane Week: 3-Minutes MLIV

Mark Cudmore analyzes the extreme volatility in the Kospi, declaring a long-term bottom and expecting global stocks to reach record highs on still-rising AI capex. He also sees near-term dollar strength and flags the possibility of further BOJ yen intervention. - Kospi suffered a wild 21% weekly loss then rallied 26% from Wednesday lows; Mark Cudmore calls a long-term bottom. - He cites good valuation, retail capitulation, clean positioning, and AI capex support as reasons for the Kospi call. - AI capex is still increasing, leading him to expect global equities to reach a fresh all-time high in the coming earnings seasons. - Volatility seen in July is expected to become a lasting feature of the AI capex end game. - The Fed took a credibility blow, but US rates still have upside potential, supporting the dollar in the near term. - BOJ intervention is likely to continue; BOJ policy changes are marginal, and lack of follow-through would put the yen at risk.