Oil Surges Back Above $90 After Second U.S. Strike on Iran... Treasury Yields Also Spike to Worst Levels Since 2006

The KOSPI failed to narrow its intraday losses, trading down about 3% at 6,627 points, while the KOSDAQ fell over 1% to 812 points. The won-dollar exchange rate moved below 1,370 won, around 1,369 won, while the dollar index eased somewhat around the 99 level. Foreign investors net sold 1.1 trillion won in the KOSPI and over 1.6 trillion won in futures, while net buying only 50 billion won in the KOSDAQ, reflecting broadly strained supply-demand conditions. The number of advancing stocks was limited to around 150 on the KOSPI and about 370 on the KOSDAQ, though in contrast, the volatility index fell for a fifth consecutive session.

Power infrastructure-related stocks fell following remarks from Elon Musk. Musk noted that SpaceX could produce key components in-house—such as vane castings—that have been a bottleneck in gas turbine production, causing related stocks to decline in both the U.S. and Korean markets. Doosan Fuel Cell plunged more than 10% intraday despite positive U.S. order news, and LS Electric extended its losing streak to a fourth consecutive session.

Apple has selected John Ternus as its next CEO, succeeding Tim Cook. Tim Cook, known for his strength in supply chain management, led Apple for 15 years, a period during which profitability was significantly strengthened, though he also faced criticism for slowing innovation. John Ternus, by contrast, is a so-called product guy who has been involved in hardware development for the company's key products—iPhone, iPad, AirPods, and Mac—and was one of the leaders behind the Mac's transition from Intel chips to Apple's own silicon. He has served as Senior Vice President of Hardware Engineering since 2021.

John Ternus's first official appearance as CEO is expected to be the new product launch event on September 9. The event is expected to unveil the iPhone 18 Pro along with Apple's first foldable iPhone, dubbed the iPhone Ultra. With a hardware-focused executive taking a different tack from Tim Cook, market attention is focused on what comments Apple will make regarding rising memory prices and its AI and Siri investments.

The hosts noted that since Apple is one of the largest demand sources for semiconductors, the CEO transition could also affect the chip industry outlook. They specifically noted that, when it comes to memory prices, Apple appears to have no room left to negotiate and must simply accept them as given.

According to an Asahi Shimbun interview report, SK Group Chairman Chey Tae-won floated joint production, R&D, and supply chain cooperation with Japan's Kioxia as options for collaboration. The remarks were interpreted as suggesting SK Hynix could pursue cooperation similar to how Kioxia produces products through a joint venture with SanDisk. The report also included a suggestion that investment in Kioxia could be ended if cooperation proves impossible, sparking debate over whether this was merely a media interview or an actual shift in investment strategy.

Reports of a planned local factory in Japan have intensified in coverage over the past few days. Earlier, one outlet exclusively reported on a review of building a plant in Mie Prefecture, a local site inspection, and Chairman Chey's visit to Japan, with the company responding that it was under review, in a stance close to denial. Subsequently, another major outlet reconfirmed more specific details of the review, and today's report on joint production with Kioxia further concretized the sense that cooperation with Japan is advancing substantially.

The hosts raised questions about this. If capacity expansion is urgently needed, they argued, the fastest option would be to accelerate work at domestic sites like Yongin where ground has already been broken, making it hard to understand why expansion is being discussed for a Japanese site where construction has not even begun. They further questioned whether it makes sense, from the standpoint of geopolitical risk and national strategic security in the semiconductor industry, to place a core plant in Japan and chemically bind the supply chain with Kioxia, particularly given the massive capital and manpower already committed to three mega-projects domestically.

Despite challenging market conditions, KOSDAQ-listed semiconductor equipment stocks turned higher intraday. Citing an LS Securities report, the broadcast introduced stocks across the entire semiconductor manufacturing value chain—from wafer fabrication to etching, ion implantation, and inspection. Underlying this trend is the view that as semiconductor companies enter a capacity expansion cycle, earnings growth among equipment and materials suppliers is being confirmed.

LS Securities analyzed that the recent trend of attention shifting to back-end processes amid the chip-stacking trend is now moving back toward front-end processes. The report explained that if memory makers' cash flow is directed toward new capacity expansion, investment is likely to flow first into front-end equipment, and that front-end processes carry a stronger sense of bottleneck given their longer lead times compared to back-end processes.

On investment strategy, CEO Lee Kwang-soo proposed a simple approach he called a two-pronged strategy: buying one stock each from the biggest gainer and the biggest laggard over the same period, or from the stock that rose most before falling most and the one that fell most before recovering most. He added that whether a company announces capacity expansion and its earnings trajectory should be viewed as key indicators, explaining that a company confidently pursuing expansion can be read as a signal of confidence in future sales.

CEO Park Si-dong offered a different approach. He noted that while Samsung Electronics and SK Hynix posting quarterly profits in the hundreds of trillions of won has sharply raised investors' expectations, small and mid-cap equipment and materials companies often show high profit growth rates but small absolute profit scales. He advised selecting companies where the absolute volume of profit exceeds a certain threshold, rather than focusing solely on growth rates. He also added that investing in domestic equipment and materials companies competing with Japanese firms, in a supportive spirit, is also a meaningful approach.

CEO Lee Kwang-soo identified the U.S.'s renewed strike on Iran as the key backdrop for today's market moves. U.S. forces conducted an additional strike on Iranian targets around the Strait of Hormuz, with U.S. Central Command stating the goal was to block the reconstitution of Iran's radar and missile capabilities. At the same time, news emerged that two tankers carrying 4 million barrels of Saudi crude were struck in succession in the Strait of Hormuz, delivering a direct shock to oil prices. WTI surged back above $90.

He noted that what concerns the market is the signal that this attack goes beyond a simple localized response. Earlier, the U.S. had declared that all mine threats in the Strait of Hormuz had been cleared, positioning itself as the new guardian of safety there; shortly after, reports suggested Iranian hardliners may have re-laid mines, and the market's initial expectation was that the U.S. had carried out a surgical strike in response. However, concerns about escalation grew as the U.S. launched a second strike—without much justification, during U.S. trading hours, and against a different target. He assessed this as unusual, noting that past U.S. strikes had typically occurred over weekends, unlike this one carried out in the middle of the trading session.

As a result, U.S. Treasury yields surged, with the 2-year at 4.4%, the 10-year at 4.8%, the 20-year at 5.28%, and the 30-year at 5.27%. Bloomberg assessed that the 30-year yield has stayed above 5% for 55 straight days, the worst stretch since 2006. He pointed out that this rate turmoil is not confined to the U.S.—Japan (highest since 1996), Germany, France (highest in 18-19 years), and Australia (highest since 2010) are all seeing similar spikes simultaneously worldwide.

He noted that Treasury Secretary Bessent is attempting to calm oil prices by mentioning sanctions and blockades against Iran and the development of routes bypassing Hormuz, but without effect. He expressed suspicion that President Trump might be deliberately escalating the situation, noting it is hard to rationally explain why Trump would rattle markets with a single attack button rather than the Treasury's more nuanced tools for controlling long-term rates. Still, he offered a paradoxical interpretation: a Fed rate hike could ultimately serve as the trigger that quiets market noise. Given that U.S. growth, inflation, and rate levels remain within a manageable range, he suggested it may be better to confront the situation head-on now by raising rates and absorbing the controversy.

On Trump's mention of the possibility of unconditional talks with North Korean leader Kim Jong-un, and reports of a possible Trump-Xi-Putin trilateral summit, he interpreted these as attempts to divert attention from pressing issues like Iran and Gaza. However, given that North Korea has already enshrined nuclear-state status in its constitution and rejected talks premised on denuclearization, he read the U.S. stepping back to unconditional talks as an attempt to seize some form of negotiating opportunity.

Today's Noon Salon featured Professor Kim Kyung-il of Ajou University's Department of Psychology, who diagnosed recent stock market volatility and investor psychology. He explained the recent decline in KOSPI volatility using the psychological concept of reliability. Trust is composed of two elements—belief (trust) and predictability (reliability)—and he explained that recent debates about market trust are actually about the latter: the extent to which the range of price swings remains within a predictable band. He noted that Korea tends to have lower reliability, or more dynamism, across industry and culture generally compared to other countries, and that investors becoming accustomed to the KOSPI moving as if supported within the 6,500 to 7,000 range this year is itself contributing to psychological stability among investors.

He pointed out that a significant portion of investors currently stuck in the KOSPI's 7,000-8,600 range are relatively new investors with limited market experience. Having come to love the market during the bull run, believing daily gains were normal, they now find themselves in a psychological state akin to a betrayed lover during the correction phase, having lost trust. He stressed that rebuilding trust does not come from a single large satisfaction but depends on the frequency of repeated small disappointments and small satisfactions accumulating over time. A gently fluctuating market without sharp swings tends to hold investors longer, he explained, whereas a sharp rise followed by a sharp fall triggers mass selling among investors who bought at the top, further pressuring the market.

On resilience, he cited brain science research showing that physical pain and pain from investment losses or relationship troubles are processed in the same brain region (including the anterior cingulate cortex). He introduced research findings that painkillers were also effective for people suffering social or financial pain, and advised that when struggling with investment losses, people should treat themselves as if physically injured—eating well, sleeping well, and taking care of blood circulation, a kind of psychological CPR.

He also addressed autumn stock market folklore. The belief that markets fall every September is a spurious correlation with no real basis, but he explained that autumn itself, as a season when reduced daylight brings a calmer mood, is actually the best time to build new habits. When people feel good, they tend to maintain their existing way of life, making it harder to form new habits, whereas a slightly subdued emotional state makes it easier to set a new starting point; autumn also involves less social interaction, meaning less interference from others, which helps new habits stick. He recommended that now is the optimal time for investors to build a habit of keeping a trading journal.

Asked about President Trump's psychology, he analyzed that Trump, holding both political and economic power, has consistently enjoyed a stable sense of power across all domains. He assessed Trump as someone who knows only how to use others' anxiety as a negotiating tool, and that he has accumulated experience in which market confusion and turmoil work in his favor. For this reason, he offered the view that instability could persist as a defining feature throughout Trump's term.

Using Apple's CEO transition as a springboard, CEO Park Si-dong shared his views on succession practices at Korean conglomerates. He noted that when Tim Cook took office in August 2011, Apple's stock price was $11, and it now trades around $320—roughly a 30-fold increase—arguing that the ultimate yardstick for evaluating an executive should be the stock price. Rhetoric about good management or achieving innovation is meaningless, he said; the sole measure is how much the stock price rose under the management authority entrusted by shareholders.

He stressed that Korean companies should take note of two things in Apple's CEO transition process: that management succession is not determined by genetic combination, i.e., bloodline, and that performance is judged solely by stock price. Contrasting this with the succession structure at Korean conglomerates—where a founder's son joins the company and within a few years becomes an executive, then vice chairman, then chairman—he pointed out that companies should be evaluated coldly by stock price rather than by claims of having managed well.

Recalling his time as an analyst, when governance reports detailing the academic backgrounds and career histories of owners' children were the most popular reports, he added that this child-centric focus should now shift. He also credited Apple for enhancing shareholder value through sustained large-scale share buybacks, retirements, and dividends.