KOSPI and KOSDAQ Rebound Sharply…U.S.-Iran Deal Hopes, AI Listings and Earnings Put to the Test

Buy Sidecars Triggered in Both Markets…Sharp Rebound on Foreign Buying Buy sidecars were triggered on KOSPI and KOSDAQ early in trading on November 10. KOSPI traded around 5,240 and KOSDAQ around 663, up in the 4% and 3% ranges, respectively. KOSPI gave back part of its intraday gains, forming a candle with a long upper wick, while KOSDAQ maintained its upward trend. Foreign investors supported the rebound with net purchases in the 200 billion won range in the exchange’s cash market and in the 340 billion won range in the futures market. The won-dollar exchange rate stood at 1,346 won, up 6 won and 90 jeon from the previous day. After recent sharp declines had heightened volatility, the pause in the sell-off and subsequent rebound provided some relief to the market. The host said buy sidecars appeared to have been triggered more than 20 times on KOSDAQ and that circuit breakers had also been triggered more often this year than in any previous year. The explanation was that greater volatility widens the range of possible future outcomes investors must anticipate, making investment decisions more difficult. Despite the rebound, intraday trading remained unsettled, with gains narrowing in response to changes in Nasdaq futures and market flows. Anthropic Moves Ahead with Listing at Lower Valuation…Offering to Gauge AI Sentiment Anthropic is reported to be launching its roadshow on November 10 U.S. time and pursuing an initial public offering with a Nasdaq listing targeted for November 19–20. The company aims to raise $69.3 billion through the offering, with an indicative price range of $70–$80 per share. The fundraising target is lower than earlier expectations that it would exceed $80 billion or reach $100 billion. Reports also said seven global Big Tech companies plan to invest about $26 billion through a private placement. Their participation was cited as a factor that could ease some concerns over whether the listing would proceed as scheduled, whether the company would receive an appropriate valuation, and whether the offering would draw substantial funds away from other investment opportunities in the market. The actual investment amount and offering terms, however, will need to be confirmed. Anthropic’s expected valuation was once discussed as high as $2 trillion, but the lower end has recently fallen to around $1 trillion–$1.1 trillion, while the company’s target is reportedly around $1.5 trillion. The company is said to be revising an additional filing that includes revenue forecasts and valuation details. The market is expected to assess the offering’s prospects based on whether the revisions signal confidence in growth or scale back previous forecasts. The new models unveiled by Anthropic were referred to in the subtitles as “Fable 5.2” and “Mythos 5.2.” Fable 5.2 was described as scoring 65 on a maximum-reasoning-intensity evaluation, placing it among the top performers, and as delivering strong results in solving difficult problems. The schedule allowing some users to test the model through November 16 was interpreted as an effort to build interest ahead of the listing. Nvidia Falls Alone as CoreWeave Earnings Draw Attention While 400 S&P 500 constituents rose in the U.S. market, Nvidia fell more than 4%, making it a lone laggard. This contrasted with a gain of more than 6% in the Philadelphia Semiconductor Index. The stock plunged after allegations concerning Jensen Huang’s personal life surfaced, and reports said a shareholder class-action lawsuit was filed in federal court in San Jose, California, alleging that relevant information had not been properly disclosed. The plaintiffs reportedly argued that the stock fell because information related to the allegations had not been disclosed. Reuters reported that it is common for shareholders to sue a company after its stock plunges. Kwangsoo Lee noted that the key issues were not the personal-life controversy itself, but its potential impact on Nvidia’s leadership and the AI ecosystem, as well as how investors respond to corporate disclosure. One view was that Nvidia’s ecosystem, built around its CUDA platform, is strong enough that competitors would find it difficult to replace in the short term. At the same time, concerns were raised that a leadership issue could weigh on market sentiment, given the lack of a clear succession plan for Jensen Huang and his personal stake of only about 3.4%. Melius Research said AMD and Broadcom could benefit if business disruptions actually materialize, but added that it is too early to predict market-share changes while demand for Nvidia remains strong. CoreWeave is scheduled to report earnings at 6:10 a.m. on the 11th and hold an earnings call at 7 a.m. Given its business model of borrowing from banks to secure GPUs, building data centers and then leasing them, key points to watch include actual leasing revenue and whether the company can generate stable cash flows over the long term. The company’s earnings and credit-risk indicators are also drawing attention as measures of investment in AI data centers and financing conditions. AI Chip Competition Expands…Google Unveils Eighth-Generation TPU Lineup Separate from the controversy surrounding Nvidia, Big Tech companies’ development of their own AI semiconductors was described as an ongoing strategic effort. Google said it had expanded its eighth-generation TPU lineup from two types to four, adding a secure inference accelerator aimed at government agencies, financial institutions and others handling sensitive data. Google also unveiled a new inference TPU. The product was described as combining two existing inference chips in a single package, doubling SRAM capacity, computing performance and HBM bandwidth. Analysts said the expansion of in-house chips could underscore the business rationale of Alphabet’s and Amazon’s AI semiconductor strategies. In the AI model race, some observers said that even when new products are unveiled, they often lack the kind of “shocking” results that could immediately capture the market’s attention. Meta released its ultra-low-cost agent model, “Muse Ember,” but the market response was limited. Performance evaluations of Anthropic’s new model and the reception of its listing are being watched as indicators of investment sentiment across AI software and hardware. Fed Officials Send Mixed Signals Ahead of U.S. October CPI The U.S. Consumer Price Index (CPI) for October is scheduled to be released tonight. Because some survey results used as a comparison base are unavailable due to last year’s government shutdown, the month-over-month figure will take precedence over the year-over-year figure. The median market forecast was for headline CPI of 0.25% and core CPI of around 0.2%. UBS saw a possibility that inflation would come in somewhat above market expectations, reflecting the impact of oil prices, but forecast core CPI at about 0.23%. It said that declines in medical-service prices and increases in used-car prices were both being observed, making it necessary to examine the details. The key question was how services inflation would move, even if falling oil prices put downward pressure on inflation. Comments from Federal Reserve officials added to uncertainty over the path of interest rates. Chicago Fed President Austan Goolsbee said the Fed should acknowledge its failures in fulfilling its dual mandate of price stability and employment, and pointed to rising service prices unrelated to energy and tariffs as well as overheating risks from data-center investment. Richmond Fed President Tom Barkin said interest rates may be at or slightly below the neutral level, but that the December Federal Open Market Committee decision had not been made and he would focus on inflation risks. The probability of a rate hike in December was described as fluctuating between 70% and 80% in the market. The host noted that Fed officials were scheduled to speak repeatedly over the coming week, and that conflicting messages could confuse investors. Falling oil prices could ease rate-hike concerns, but both the CPI figures and Fed comments would need to be considered. U.S. October CPI Forecasts — At the median market forecast, headline CPI is 0.25%, above core CPI at 0.2%. UBS’s core CPI forecast of 0.23% is higher than the market forecast. Oil Prices Fall on Hopes for U.S.-Iran Talks News that negotiations between the United States and Iran had resumed was cited as a backdrop to the market rebound. President Donald Trump said on social media that he had spoken with Qatar’s prime minister, that progress had been made on several issues, and that an agreement had been reached on the nuclear issue. He added that the United States remained ready to respond immediately, while the likelihood of an actual clash was low. According to Al Arabiya, discussions included a proposal allowing Iran to retain uranium enriched to 3.67% domestically, the reopening of the Strait of Hormuz and the lifting of the naval blockade. A proposal to release $6 billion–$9 billion in frozen Iranian assets was also raised. Iran said the restrictions put on the negotiating table were reasonable among the options presented, and reports also emerged of a visit by International Atomic Energy Agency inspectors. As hopes for progress in the talks grew, WTI crude fell to around $86 a barrel and later declined to the $85 range intraday. The host said Trump’s recent remarks used more restrained language than in the past and could be read as a conciliatory signal. However, whether agreement can be reached on nuclear inspections, the Strait of Hormuz and frozen assets remains unresolved, and it is necessary to see whether the talks lead to an actual end to the conflict. Reports said Vice President JD Vance had recently been involved in the negotiations, and the political interests of Vance, who is mentioned as a potential future Republican presidential candidate, and Secretary of State Marco Rubio were also discussed. One view is that the United States could focus on the issue of highly enriched uranium related to nuclear weapons and secure results, while Iran could gain sanctions relief and the reopening of the strait as part of a compromise. Given the situation in Israel and developments in U.S. negotiations, the market is hoping for a de-escalation of the crisis. Taiwan Deploys Stabilization Fund Worth More Than 20 Trillion Won…Focus on South Korea’s Response Taiwan held a meeting after Asian stocks plunged and decided to deploy its National Financial Stabilization Fund; it was reported to have begun buying stocks on Monday. The amount was 500 billion Taiwan dollars, equivalent to more than 20 trillion won. A figure was also cited showing that stocks had risen one month after the fund was deployed in 77.7% of previous cases. In South Korea, the possibility of deploying a stock-market stabilization fund and banning short selling has been discussed. The host explained that the stabilization fund is not money already set aside in cash; rather, participating institutions provide funds when needed, meaning that the actual amount raised and the timing and scale of its use have not been determined. The counterargument that a short-selling ban could hinder inclusion in the MSCI developed-market index and other goals was also mentioned. If volatility continues, measures discussed included using futures-related mechanisms to curb intraday swings, monitoring market disruption involving Samsung Electronics and SK hynix shares and inverse ETFs, and checking for violations related to short selling. The point was that if a blanket short-selling ban is too burdensome, investigations and enforcement against illegal practices such as naked short selling could be strengthened. No decision has been made on when or in what form any actual measures will be introduced. [Kwangsoo's Take] Market Stability Must Begin with Urgent Action Kwangsoo Lee argued that inclusion in the MSCI developed-market index is an important goal, but not an urgent one. Policymakers and the government should distinguish between importance and urgency when setting priorities, and should not delay responses to sharp market swings while focusing on long-term tasks related to index inclusion. He criticized a meeting of relevant parties to discuss forced liquidations for amounting to no more than something that could have been handled by phone. He said that during periods of high market volatility, unexpected and swift policy action can affect investor sentiment. Taiwan convened a meeting quickly after its market plunged and deployed the fund from the next trading day, while South Korea had scheduled an emergency economic meeting several days later, he noted. His criticism was that authorities and market makers were responding slowly as the market fell sharply. Lee emphasized that the market cannot be viewed as a space made up solely of investors and securities firms; the government and its policies are also market participants. He argued that it is wrong to assume government intervention inherently runs counter to market principles, and said governments in various countries play a role in stabilizing markets. Citing the possibility that foreign investors might interpret a fund deployment in Taiwan as a sign of undervaluation rather than all leaving at once, he said the government’s failure to send any message could instead heighten investor anxiety. He stressed that the request was not for the government to artificially push up share prices, but to recognize the losses and anxiety of the public and take necessary action. He also compared the market capitalization erased by falling share prices to roughly the total value of apartments across Seoul, about 2,000 trillion won. He added that while Nasdaq futures have a major impact on Asian trading, investors should guard against mechanical trading that follows futures movements and amplifies volatility. [Kwangsoo's Take] Shareholder Rights and Class-Action Lawsuits Need Reform Kwangsoo Lee compared shareholder-protection frameworks in the United States and South Korea in light of the Nvidia shareholder lawsuit. In the United States, a single individual can bring a case against the management of a large company and have it proceed, but in South Korea, he said, securities-related class actions are difficult from the outset, beginning with gathering plaintiffs and obtaining permission to sue. In South Korea, multiple stages of hearings can be required just to contest whether permission should be granted, meaning it can take a long time to reach a hearing on the merits, he argued. He said gathering plaintiffs takes time for a class action to proceed in South Korea, the applicable grounds for lawsuits are limited, and there are also constraints on retaining specialist lawyers. He added that the permission process could take around six years and that the entire process could exceed 10 years if it reaches a hearing on the merits. He qualified the figure of only 12 or 13 cases reaching the merits and a Supreme Court ruling over several decades as being based on his recollection. Lee also said it was problematic to require shareholders, who have difficulty obtaining internal company documents, to find the evidence themselves. He argued that, as under the U.S. discovery system, both sides should be required to disclose relevant evidence during litigation, and that meaningful compensation and sanctions should follow when corporate liability is established. His argument was that companies in South Korea face little real cost even when they harm shareholders, making it difficult to deter management. He criticized the Lee Jae-myung administration and the Democratic Party of Korea for having pledged to address the Korea discount and pursued amendments to the Commercial Act and measures related to shareholder rights, while making insufficient progress on class-action reform. He said that discussing the introduction of a discovery system alone was not enough and that further reform was needed, including changes to the requirements and procedures for lawsuits. He emphasized that legal mechanisms enabling shareholders to hold management and controlling shareholders accountable are important for strengthening market confidence.