Go lever pedal! Philadelphia Semiconductor Index falls into bear market, Japanese stock king loses half of its value in one month
【Go to the lever and step on it! The Philadelphia Semiconductor Index fell into a bear market, and the Japanese stock market halved in one month] Although the Korean stock market was closed on Friday, the global chip sector still performed sluggishly. During the Asia-Pacific trading session, the semiconductor sector of the Japanese stock market plummeted, and the U.S. Philadelphia Semiconductor Index failed to counterattack and fell into a technical bear market, with SanDisk falling nearly 30% in a single week.
Although the South Korean stock market was closed on Friday, the global chip sector still performed sluggishly. During the Asia-Pacific trading session, the semiconductor sector of the Japanese stock market plummeted, and the U.S. Philadelphia Semiconductor Index failed to counterattack and fell into a technical bear market, with SanDisk falling nearly 30% in a single week. Asian markets under heavy selling pressure It’s been a tough week for retail investors, known colloquially as South Korea’s “ant army.” A total of 1.2 million retail investors have received margin call notices. This number accounts for more than 3% of South Korea's total adult population, which is enough to reflect the feverish speculation in the local stock market and the huge risks hidden in leveraged trading. Goldman Sachs trader Giannis Blekos disclosed the data in a trading briefing for clients on Thursday, adding: This week alone, about 350,000 retail accounts were forced to liquidate during the collapse of the Korean Kospi. South Korea's markets were closed on Friday for Constitution Day, giving fund managers a rare respite. However, the wave of decline triggered by the sell-off in South Korean stocks still spread to other markets around the world. In the Japanese market, Kioxia Holdings, the local core semiconductor leader and a popular market target in the past, led the decline, falling 16% in a single day. Kioxia just became Japan's most valuable company this year, but its share price has halved in the past month. Other chip industry chain companies such as Ifiden, Tokyo Electronics, and Sumitomo Metal Mining fell between 8% and 10%. Prior to this, TSMC released its second-quarter financial report on Thursday. Its performance significantly exceeded expectations and it raised its performance guidance. However, even if the good news materialized, the stock price still could not escape downward pressure, closing down 7%. China Business News reporters summarized and found that many institutions believe that the collective collapse of sector sentiment is more due to the crowded position structure of funds rather than the deterioration of industry fundamentals. In addition to TSMC, ASML has also recently delivered super strong financial reports; chip manufacturers have stated that industry supply continues to fail to keep up with demand in the medium and long term. Independent analyst Stephen Innes commented on TSMC in his subscription column: "When good news can no longer push up the stock price, the market is no longer trading fundamental news, but the selling pressure of huge profit-taking orders on the market. The Korean market fully demonstrates that once leverage, margin calls, and market volatility form a negative cycle, ordinary corrections will quickly evolve into mechanical stampede declines." However, the market is starting to show some positive signals. Citigroup's "Weekly Insights on Capital Flows" released on Friday showed that semiconductor-related ETFs in South Korea and Taiwan received net inflows of US$6.4 billion and US$2.8 billion respectively this week. In the past few months, foreign capital has continued to withdraw from the Korean stock market in large numbers. This week, however, foreign capital inflows of US$500 million were recorded, indicating a positive reversal in capital flow. Philadelphia Semiconductor Index enters bearish trend After experiencing a surge this spring, the U.S. chip sector fell into a technical bear market. Dow Jones market data shows that the Philadelphia Semiconductor Index (SOX), a benchmark index composed of 30 leading U.S. chip companies, fell 21% on Friday from its all-time high on June 22. The market recognized the bear market standard as the index retracing at least 20% from its stage high. A number of recent signals indicate that the internal funding style of U.S. stocks has switched again. Eye-catching financial reports from the banking industry pushed the S&P 500 financial sector to a record closing high for the second consecutive trading day on Thursday; the Dow Jones Transportation Average rose more than 30% during the year, approaching a record high, and the closing price of the State Street S&P Retail ETF hit its second high since the beginning of 2022. David Royal, chief financial and investment officer of Thrivent Fund, said: "The spread of market conditions to multiple sectors is a very healthy signal. Recent employment and retail sales data also send positive signals." He added: "Only when people have confidence in the job market will they choose large purchases such as cars." Looking back at history, chip stocks tend to be more volatile than the broader market. According to Dow Jones market data, in the past ten years, the Philadelphia Semiconductor Index has experienced 6 deep corrections with a decline of more than 20% and 31 adjustments with a decline of more than 10%; compared to the S&P 500 Index, there were only 2 declines of more than 20% and 8 declines of more than 10% during the same period. It is worth noting that some 10% level adjustments occur during bear market cycles.
Kevin Gordon, director of macro research and strategy at the Charles Schwab Financial Research Center, described the recent chip market this way: "The enthusiasm in the sector is just a short-lived carnival. Sometimes the market ebbs quickly, but it will come back soon." He believes that behind this correction, on the one hand, it is investors taking profits, and on the other hand, it also represents the withdrawal of funds from the chip track. "As you can see from previous sharp sell-offs, the market memory is very short. I don't think this drop is a warning sign of extreme danger." Earnings expectations will be the key variable. Wall Street expects the annualized net profit of S&P 500 constituent stocks to increase by 23.6% year-on-year in the second quarter, while the profit growth rate of the semiconductor and related equipment industry is as high as an astonishing 131%. David Russell, head of global market strategy at the trading platform TradeStation, asked: "The current profit performance of the technology sector is outstanding, but can the high growth be sustained after one to three quarters?" He said: "The rising momentum of technology stocks has exhausted, and the market has begun to doubt the sustainability of the long-term high prosperity of the chip industry. Whether chip stocks have already overdrawn their growth expectations in the next few years in advance, so funds have begun to be reallocated and flowed to other sectors with positive logic in a good economic environment." According to the exchange's schedule, it will take some time for the first batch of very large chip manufacturers to disclose their financial reports. Google's parent company Alphabet will be closely watched when it announces its results next Tuesday. (
Kevin Gordon, director of macro research and strategy at the Charles Schwab Financial Research Center, described the recent chip market this way: "The enthusiasm in the sector is just a short-lived carnival. Sometimes the market ebbs quickly, but it will come back soon." He believes that behind this correction, on the one hand, it is investors taking profits, and on the other hand, it also represents the withdrawal of funds from the chip track. "As you can see from previous sharp sell-offs, the market memory is very short. I don't think this drop is a warning sign of extreme danger." Earnings expectations will be the key variable. Wall Street expects the annualized net profit of S&P 500 constituent stocks to increase by 23.6% year-on-year in the second quarter, while the profit growth rate of the semiconductor and related equipment industry is as high as an astonishing 131%. David Russell, head of global market strategy at the trading platform TradeStation, asked: "The current profit performance of the technology sector is outstanding, but can the high growth be sustained after one to three quarters?" He said: "The rising momentum of technology stocks has exhausted, and the market has begun to doubt the sustainability of the long-term high prosperity of the chip industry. Whether chip stocks have already overdrawn their growth expectations in the next few years in advance, so funds have begun to be reallocated and flowed to other sectors with positive logic in a good economic environment." According to the exchange's schedule, it will take some time for the first batch of very large chip manufacturers to disclose their financial reports. Google's parent company Alphabet will be closely watched when it announces its results next Tuesday. (