AI Investment Slowdown and Middle East Risks... Growing Possibility of 'Inflation Resurgence' | Myung Min-jun, Seo Su-jin, Song Jae-kyung

Summary

Song Jae-kyung, CEO, discusses the likelihood of additional Fed rate hikes and the importance of long-term US Treasury yields. He examines how AI data center capex and US-China AI competition are shaping markets, including benefits for Korean semiconductor exports. He also highlights oil and shipping opportunities from Middle East route disruptions, and recommends value and dividend stocks as defensive holdings amid high uncertainty.

• Fed is expected to hike, with the bond market pricing at least three more hikes.
• Long-term US Treasury yields are key; fiscal deficits and Japanese repatriation could keep them elevated.
• AI data center buildout faces local opposition and midterm election risk, causing near-term caution.
• US-China AI competition may allow Korea to sell semiconductors to both sides.
• Middle East route disruptions are keeping oil and shipping freight rates high; shipping equities are worth watching.
• Value and dividend stocks are seen as defensive if long-term rates rise and markets become unstable.
• The overall market outlook is uncertain, and the speaker advises a diversified portfolio rather than selling everything.