Direct hit from the 'three major headwinds' of rates, oil, and yen-carry unwinding... Buy, sell, or hold stocks now? 'Solution for an extremely cautious stock market' | Lee Ji-hwan, CEO

Summary

Lee Ji-hwan, CEO of Aurora Investment Advisory, discusses three macro headwinds: high US Treasury yields, rising oil and commodity prices, and potential yen-carry unwinding. He argues high 10-year yields may delay rather than force a Fed hike, while commodity cost pressure is more dangerous for KOSDAQ semiconductor suppliers. He recommends holding Korean equities rather than adding or cutting aggressively, and warns that rapid won strength and continued foreign selling in Samsung Electronics and SK hynix need monitoring. He also sees crypto as the most exposed market if yen-carry unwinds resume.

• US 10-year Treasury yield near 5% is seen as partly overshot due to futures expiration and disappointing buyback execution.
• High long-term yields may make the Fed more cautious, not force an immediate hike.
• Commodity cost inflation is less damaging to large caps but threatens KOSDAQ semiconductor equipment and materials earnings.
• Yen-carry unwinding is mostly done in short-term funds, but crypto remains vulnerable to ETF outflows and a sharp correction.
• Rapid won appreciation could pressure Korean tech exporters, especially Samsung Electronics and SK hynix.
• Recent foreign selling in Samsung and SK hynix is viewed as mechanical futures/ETF-related, not a medium-term exit.
• Lee advises Korean equity holders to hold and cash holders to wait, with no aggressive selling before the Korean Thanksgiving holiday.
• US midterm-year seasonality and Bank of Korea policy rate risk keep the market in a cautious, range-bound stance.