As the KOSDAQ index flirts with the 720 threshold, market participants are increasingly demanding regulatory overhauls, including a ban on short-selling, the abolition of investor-caution designations, and the relaxation of earnings-loss rules tailored to R&D-heavy growth companies.
After hitting the 1,200-point mark in April, the KOSDAQ index has plunged by more than 40% in six months, widening its performance gap with the KOSPI to 57.7 percentage points. Structural issues, including the migration of blue-chip companies, earnings polarization, and capital flight toward large-cap stocks, continue to weigh on the index 30 years after its inception.
Nasdaq plunges 2.86%, chip index slides 7.2%; Intel records worst day in 52 years. Investors shift focus from top-line revenue growth to cash flow sustainability as AI capital expenditure pressures mount.
US consumer price growth picked up in September, driven by rising core inflation, while real consumer spending remained virtually unchanged when adjusted for inflation. A decline in real disposable income underscored a weakening of household purchasing power.
Global investment banks and asset managers lean toward a further rate hike in December following the Federal Reserve’s decision to hold rates steady, though divergence remains over next year's monetary policy path.
Federal Reserve Chair Kevin Warsh reaffirmed the central bank's resolve to stabilize prices while withholding specific guidance on the policy path for December. The Fed held the benchmark interest rate steady following a September hike, as policymakers weigh the tightening effects of recent monetary adjustments.
While demand for AI semiconductors remains unabated, the soaring cost of capital has emerged as a significant headwind for massive infrastructure projects, with Elon Musk’s SpaceX facing complex price negotiations for a $40 billion financing deal.
Recent spikes in corporate bond yields—such as CoreWeave’s topping 16%—highlight growing credit risks in the artificial intelligence sector. With capital expenditures vastly outpacing operating cash flow, AI infrastructure firms continue to face mounting funding pressures despite falling benchmark interest rates.
The Bank of Korea held its benchmark interest rate steady at 3.00% following back-to-back hikes in July and August, pointing to a stronger-than-expected economic recovery driven by robust semiconductor exports and facility investments.
Meta Platforms reported third-quarter revenue that beat market expectations, driven by rising ad impressions and pricing. However, aggressive artificial intelligence investments pushed free cash flow into negative territory. To fund its expanding AI infrastructure, the social media giant is diversifying its financing channels, following massive corporate bond issuances with the introduction of non-voting Class C shares.
