Capital Market's "Law of Gravity"? Big Tech's Funding Dries Up At This Time | Hong Seonae, Lee Euntaek KB Securities Asset Allocation Strategy Directors

Summary

Lee Euntaek, Director of Asset Allocation Strategy at KB Securities, discusses the current market correction, offering a simple igeokdo indicator for buying KOSPI dips in an uptrend. He then addresses Big Tech capex fears by drawing a parallel with Cisco in 1999, arguing that strong earnings from Korean semiconductor leaders like Samsung and SK hynix will dispel those concerns. Finally, he warns that the real danger is not Big Tech cutting investment, but capital providers withdrawing if US long-term yields rise sharply alongside inflation, and provides specific levels to watch.

• KOSPI’s pullback to its 50-day moving average (igeokdo 100) is a buying opportunity in the ongoing uptrend.
• Use the igeokdo indicator to avoid buying when above 130% and to avoid panic-selling near support.
• Despite Meta-driven capex fears, history shows strong earnings can override such concerns, as Cisco did in 1999.
• Upcoming Q2 earnings from Samsung Electronics and SK hynix (around July 23) could be a positive catalyst for Korean semiconductors.
• Lee suggests targeting the post-early July period for entry ahead of the earnings season.
• The pivotal risk is not Big Tech voluntarily stopping AI investment, but capital providers halting funding if inflation forces rates higher.
• Historical bubbles all featured sustained rate rises accompanied by inflation; currently US 10-year yield is below 5%, but a break above 5.0–5.3% with rising inflation would be a danger signal.