His prediction was correct. He predicted in November last year that the winter passed and the bull market centered on growth stocks gradually shifted to value stocks, and US technology stocks could receive a large adjustment. This is because interest rates will skyrocket as economic activity resumes with the Corona 19 vaccine. The timing was about two months earlier than expected, but the market is moving according to his forecast, such as a sharp decline in Apple and Tesla, and a sharp adjustment of domestic leading growth stocks. This is the story of Ik-jae Cho, a high-investment and securities expert, who is the first-generation quant expert in the securities industry and holds the record of the longest research center head.
As the KOSPI index was pushed to the early 2900s during the intraday on the 9th, he visited Cho again. We asked for interest rates and the future direction of the stock market.
2900 lines are hard to break
Commissioner Cho thought that the current KOSPI coordinator could continue until April. The 2900 line is expected to remain unbroken amid high volatility for the time being. The main reason is that investment sentiment for risky assets has not been compromised. Global high-yield bonds and raw materials are showing strength. He said, “In order for the bull market to turn into a bear market, the high yields have to be broken, but the high yields, which have a high proportion of consumer goods and energy, have not been damaged on the basis of the economic recovery.” It will be difficult for the asset value to drop significantly,” he predicted. Crucially, as the normalization of economic activities due to Corona 19 eventually means normalization of corporate performance, the stock market could not fall otherwise.
Growth stocks will rise again from the second quarter, he predicted. After mid-2Q, it was grounded that interest rates could move sideways or downgrade. This is due to the fall of the OECD leading economic index. As for the leading economic index, the rate of currency growth is important, but the indicator is expected to deteriorate this year due to the negative base effect that released money in March-April last year. The logic is that the leading economic index is falling, but interest rates cannot just rise. He explained, “The industry that is showing strength recently, such as chemicals and steel, will slow down due to the influence of the leading economic index,” he said. “From the second quarter, it is difficult to beat the market rate of value stocks,” he explained.
Semiconductor and secondary batteries rebound
After the correctional market, he said, pay attention to the KOSPI earnings per share (EPS), which has increased less so far. This is because it is a sign of a full-fledged earnings market. Based on this, the KOSPI index could exceed 3200 and rise to 3500.
The industry focused on semiconductors. This is because it has growth potential and results support it. Information technology (IT) hardware and software related stocks were also seen as promising. Automakers also pointed out one of the industries that will lead the rebound by adding growth potential, such as electric vehicles, to stable earnings. He emphasized, “From Harbin, Samsung Electronics will inevitably receive attention again,” he said. “It is time to buy at a low price for the rechargeable battery, which has been greatly adjusted now.”
Reporter Go Yoon-sang [email protected]
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