Korean Stocks Fire Buy-Side Sidecars a Day After Sell-Offs as CPI Relief Sparks Rebound

The KOSPI jumped roughly 6% to reclaim the 7,300 level, while the KOSDAQ rose more than 4% back above 820. The won stabilized around 1,490 per dollar. Foreign investors bought heavily in both the KOSPI and KOSDAQ futures markets, and in cash equities foreign investors purchased about 1.8 trillion won while pension funds added roughly 280 billion won. Both indices triggered buy-side sidecars during the session — the 18th such KOSPI sidecar this year.

Park Si-dong and Lee Kwang-soo noted the market has been correcting for about a month since the KOSPI's record intraday peak near 9,100 on June 17. A full correction typically needs both time and price adjustment, and seasonally, a lull tends to run from the first-half close in July through the August vacation season before recovery accelerates in September. Both hosts, however, flagged this cycle as unusual because the index fell nearly 30% from its peak — a deeper price correction than the typical pattern.

Park argued that such an unusually deep price correction points to two possible outcomes for the recovery: either an extremely sharp snapback or a slower-than-expected grind. He noted that with Samsung Electronics near 250,000 won and SK hynix near 1.7 million won, growing recognition that the declines outran fundamentals could trigger a rapid rebound. Still, he said he personally hopes for a gradual, predictable recovery rather than a volatile spike, since extreme swings in either direction add risk.

Lee Kwang-soo described corrections as a turnover of market participants — pessimists who believe the peak is in sell their holdings while optimists who see current prices as attractive step in. He said a correction ends once only believers in further upside remain, framing markets as a mechanism that transfers wealth from short-term-patience holders to long-term-patience holders. Both hosts agreed on one common point regardless of scenario: investors need to stay in the market.

SK hynix's U.S.-listed ADR jumped 27% on its third trading day. Barclays set a $330 price target with an eight-times multiple, implying further upside from the day's $193 close, citing a memory supply shortfall that is expected to worsen through 2027 with only limited capacity additions in 2028. The launch of leveraged ETF and options trading on the ADR that same day was also cited as fueling additional buying.

Lee Kwang-soo said the 27% surge cannot be explained by fundamentals alone, attributing it to a classic short-squeeze pattern where thin post-listing float met a wave of derivatives-driven demand. On the roughly 50% premium between the Korean shares and the ADR, he pushed back on reports urging investors to sell local shares for the U.S. ADR, noting the premium isn't attractive once taxes are factored in. He added that the premium should narrow once a 2.5%-lockup tranche of newly issued ADR shares becomes available after late July.

Meanwhile, speculation resurfaced that Samsung Electronics is exploring its own ADR listing. Bloomberg reported, citing sources, that Samsung was evaluating the feasibility of an ADR issuance, which the company denied within hours, saying its situation differs. Another outlet later reported that internal groundwork was quietly continuing. Both hosts said it would be natural corporate diligence for Samsung to study the idea after watching SK hynix's ADR success, and cautioned against reading too much into the denial.

Hanmi Semiconductor stood out as a notable mover: despite beating consensus estimates by roughly 18-20% the prior day, its shares initially fell, then rebounded 5% in U.S. after-hours trading and surged about 27% in the regular Korean session as the stock caught up to the earnings beat.

U.S. June CPI rose about 3.5% year-over-year and posted its largest month-over-month deceleration in six years, driven by an energy component that fell more than 5% from the prior month as lower oil prices fed directly into the index. Following the release, Fed-funds futures implied rate-hike odds tracked by FedWatch tumbled from around 40% the prior day to 13%. Lee Kwang-soo flagged that while headline inflation cooled, slowing price gains in categories like auto repair and food could point to softening employment, making the next jobs report a key variable to watch.

At a House Financial Services Committee hearing the same day, Fed Chair Kevin Warsh said persistently elevated inflation would not be tolerated, while also describing the U.S. economy as resilient, growing rapidly, and broadly stable in the labor market. He noted a need for new inflation measures such as trimmed-mean and median-type gauges. Both hosts said his remarks stayed largely conventional and reflected the market-savvy political balance expected of a Wall Street veteran.

IBM plunged more than 25% after earnings, its steepest single-day drop since 1968. CEO Arvind Krishna said the company failed to adapt quickly enough to shifting market demand, missing several large deals as clients redirected capital spending from software toward hardware like servers, memory, and storage. The fallout lifted memory and hardware names including Nvidia and SK hynix's ADR, while software firms like Accenture and Microsoft fell; cybersecurity names CrowdStrike and Palo Alto Networks hit record highs.

Lee Kwang-soo framed IBM as a textbook case of a company punished by the market for reacting to AI rather than proactively investing in it, arguing that falling behind in the AI race now invites retaliatory selling, not just underperformance. He said the episode strengthens the case for continued AI capex among major tech firms. Ahead of ASML's earnings that evening and TSMC's upcoming quarterly report, the hosts said capital-spending guidance — more than the results themselves — would be the key signal for memory-sector sentiment.

President Lee Jae-myung, during a Financial Services Commission briefing, said losses tied to leveraged ETFs on Samsung Electronics and SK hynix were mounting for investors, and instructed regulators to act swiftly even in the face of resistance while handling contested issues carefully. Financial Supervisory Service Governor Lee Chan-jin responded that the agency bears responsibility as market overseer, and the Korea Exchange was reportedly told to review flaws in the relevant system and prepare remedial measures quickly. At a closed-door briefing the previous day, an FSC official said the commission was weighing measures with market impact in mind and would announce them at an appropriate time.

Park Si-dong and Lee Kwang-soo, who have long called for suspending trading in single-stock leveraged and inverse ETFs, welcomed the president's remarks. Lee Kwang-soo argued the sequencing needs to change, though: rather than picking the fastest option among feasible measures, regulators should first identify which fast-acting measures would restore trust, then implement those immediately. He noted single-stock leveraged and inverse names still ranked among the day's most-traded stocks, underscoring the need for faster action.

Lee Kwang-soo traced the origin of stocks to 1602, when the Dutch East India Company issued the first shares to fund ships for its Asia trade routes. Rather than shoulder the enormous cost of building a ship alone, the company spread the risk across many investors who would share in the profits if the voyage succeeded. He said investors were willing to convert their assets into a piece of paper only because of the trust built on the company's long track record and data. He noted that virtually every major financial crisis in history — the Mississippi Bubble, the Great Depression, Korea's foreign exchange crisis, the dot-com bubble, and the global financial crisis — traced back to a collapse of trust.

He said the same dynamic drove Korea's stock market from the 3,000 level through 4,000, 5,000, 6,000, and up to its recent record highs — a rise built on accumulated public trust in the economy, politics, and companies, evidenced by rising balances in investor deposit accounts. But he warned that trust appears to have eroded somewhat over the past month or two, and if left unaddressed, could escalate into a full-blown crisis. He argued the first step toward restoring trust must come from government, policy, and the political sphere.

Comparing markets to sports, where fair play depends on trust in referees and rules, Lee said stock markets similarly require participants to trust the rules and regulators to function normally. While he broadly welcomed President Lee's call for swift action, he reiterated that the definition of 'swift' needs to change — regulators should prioritize measures that restore trust, not simply the fastest feasible options, and implement those first.

He closed by reading viewer messages describing losses from money earned through cleaning work, delivery driving, and part-time jobs, expressing genuine sorrow for their situations. He urged viewers not to give up on the market yet, to avoid exiting entirely, and to soberly reassess their own investment plans within a loss tolerance they can actually bear.