The Fed raised its policy rate by 25bp to 3.75~4.00% in September and is in its blackout period ahead of the 10/27~28 FOMC, so officials are not speaking. After CPI at 3.7%, PPI at 6.3% YoY and import prices at 8.1% all beat expectations in succession, the probability of an October hike rose to 18%. The market's base case is a hold in October and a hike in December. Kim Byung-yeon, a director at NH Investment & Securities, expects one hike in December followed by a pause, while Hankyung Global Market, citing UBS, raised the possibility of another hike in March next year.

This collection did not confirm the policy rate or the next meeting date [not collected]. The French 10-year yield rose 12bp to 4.90%, but EUR/USD did not move at 1.1215 (+0.01%). That means the market sees this as a risk specific to France rather than to the euro area as a whole.

The policy rate stands at 3.00%. A hold at the 10/22 MPC meeting is overwhelmingly expected, and most forecasts call for a November hike and a terminal rate of 3.5% in the first half of next year. The government cut October treasury bond issuance by KRW 5 trillion thanks to excess tax revenue, and further cuts are expected in November and December, easing supply pressure on Korean government bonds. With the won at its strongest against the dollar in two years, the exchange rate relieves some of the pressure to hike.

At the Newsquawk close, the S&P 500 was up 0.63% (7,708), the Nasdaq 100 up 1.17% (29,529) and the Russell 2000 up 0.37% (2,731). Consumer discretionary (+2.73%) and tech (+1.19%) rose, but 7 of 11 sectors fell, including utilities (-1.98%) and real estate (-1.18%). Reuters reported that the Philadelphia Semiconductor Index rose about 2%, ending an eight-day losing streak that had erased 15.7%.

Amazon rose 4.8% after Morgan Stanley named it a top pick, Tesla gained 3.7% and Intel rose about 3% on a JPMorgan upgrade to neutral. Cleveland-Cliffs surged about 16% after third-quarter earnings beat expectations. CoreWeave fell more than 1.5% on concerns over its $50 billion debt despite a Goldman Sachs upgrade to buy, setting a fresh 52-week low below $60, and Meta also slipped about 1%.

On the weight of Treasury auction supply, the 2-year closed at 4.763% (+4.8bp), the 10-year at 5.140% (+5.9bp) and the 30-year at 5.480% (+5.4bp) (Newsquawk). The probability of an October FOMC hike rose to 18% from last week's low of 12%, with CME pricing implying about 4.3bp of hikes in October and 25.8bp through December.

The October NAHB housing market index fell from 32 to 29. 43% of builders cut prices, and the NAHB cited rising mortgage rates as the main cause. The real estate sector fell 1.18% on the day.

President Trump signed an executive order waiving Graham Act-based Russia energy sanctions and tariffs, and the US and Russia agreed on supplies of about 2.3 million barrels of diesel this month and 7.6 million barrels from November onward. According to Kpler, the 7-day average of Hormuz transits is 8.5 million barrels a day. November WTI settled at $98.54 (+$0.48) and December Brent at $109.55 (-$0.31).

Protests over the cost of living and education conditions escalated into riots, with about 2,400 people arrested and more than 3,000 shops damaged. Curfews from 8 p.m. to 6 a.m. were imposed in four cities, including Lille. The French 10-year yield rose 12bp to 4.90%, the spread over Germany reached 145bp and the CAC 40 fell 1.65%.

Third-quarter GDP grew 4.5% YoY, faster than 4.3% in the second quarter, bringing January-September growth to 4.6%. September industrial output rose 5.5%, but retail sales grew just 1.1% and fixed-asset investment fell 7.2% in January-September.

A plan for a data center in Loughton, Essex, with 23,040 Nvidia chips and 50MW of capacity slated to come online in early 2027, has fallen through. The grid operator said power capacity may not be available until the early-to-mid 2030s.

Bitcoin slid to $80,700 overnight, then topped $83,000 before trading around $82,000. Resistance is at $84,000, with support at the 50-day moving average of $81,000. Strategy's holdings reached 848,517 coins, and its share buyback authorization was raised to $3 billion.

The KOSPI opened at 5,488.41 (-3.17%) and closed at 5,768.01 (+99.96p), while the KOSDAQ also rose 1.78% to 808.89, reclaiming the 800 level. The won closed at 1,330.3 per dollar, its strongest close in about two years. Institutions bought KRW 577 billion and retail investors sold KRW 1.088 trillion.

Battery stocks surged on expectations for North American ESS demand, with Samsung SDI +11.70%, LG Chem +8.46%, LG Energy Solution +7.20% and EcoPro +11.19%. Samsung Biologics rose 9.94%. Foreign net selling in the regular session was KRW 36 billion, sharply lower than the previous day's dumping.

Foreign investors were net sellers of KRW 17.716 trillion on the KOSPI from 10/1 to 10/16, with SK hynix at KRW 9.4391 trillion and Samsung Electronics at KRW 4.7286 trillion accounting for 80%. Market cap fell by about KRW 875.8 trillion over the same period.

In the week of 10/12~16, Samsung Electronics fell 17.8% and SK hynix 24.3%. Foreign ownership dropped to 45.98% for Samsung Electronics (lowest since July 2009) and 48.85% for SK hynix.

Forced liquidations exceeded KRW 50 billion for four straight sessions from 10/13 to 10/16, totaling KRW 286.2 billion. Investor deposits fell by more than KRW 6 trillion, from KRW 100.4 trillion to KRW 94.4 trillion, and the margin loan balance declined to KRW 32.25 trillion.

Asked about deploying the stock market stabilization fund and temporarily suspending short selling, Deputy Prime Minister Lee Hyung-il said, "We are preparing so that we can take market stabilization measures if needed." President Lee Jae-myung called the plunge an unavoidable correction and said he would receive a comprehensive report and review further steps, but ruled out direct intervention. The deputy prime minister also mentioned the possibility of 3.4~3.6% growth this year.

Ahead of the 10/22 MPC meeting, 19 of 20 experts expect the policy rate to be held at 3.00%, and 18 expect a hike in November. Most forecast a terminal rate of 3.5% in the first half of next year. The government cut October treasury bond issuance by KRW 5 trillion thanks to excess tax revenue.

The actual numbers point the same way. The S&P 500 rose 0.41% and the VIX at 18.40 (-7.95%) reversed Friday's spike, following the statistic that 25 of 32 Friday VIX jumps of 20%+ were followed by a decline the next Monday. Still, as the cautious camp put it, "acting like a 25-minute bounce recovered the whole 5% drop," the Nasdaq remains down 2.99% over five days.

The $268,000 loss came from short-dated options across META, TQQQ, GLD and TLT. It shows how leveraged options strategies break down on volatility-spike days like Friday's, when the Nasdaq fell 2.15% and the VXN hit 27.13 (+18.52%). It is the same kind of deleveraging as Korea's KRW 286.2 billion in forced liquidations.

Walmart rose 10.8% during the chip stocks' 8-day slide, pushing its P/E above Nvidia's (25.2x trailing, the lowest since 2019). On 10/19, consumer staples XLP fell 0.47% while SMH rose 1.61%, as the defensive premium began to unwind in a single day. A counterargument that "P/E is the wrong metric for valuing Nvidia" also surfaced.

Rebuttals outweighed the bearish thesis that "Meta is a $1 trillion relic." Meta fell about 1% on 10/19, missing out on the rebound, and censorship controversies kept recurring on r/technology. AI capex ROI in this week's earnings will settle the debate.

The same day, S&P Global's Daniel Yergin also warned that fertilizer, diesel and sulfur supply disruptions combined with El Niño could prolong a food crisis through 2027. Along with an 80% rise in diesel costs (Iowa farms), it supports a sticky inflation path that underpins expectations of Fed hikes.

A meme post mocking the bears after the weekend's Black Monday predictions missed.

A thread on trading strategies for the next day.

A bullish argument that calls CoreWeave "Coughweave" and acknowledges its debt risk, but says the market is pricing excessive default risk into neoclouds.

A bearish Meta thesis arguing that AI clashes with its engagement-time-based ad model.

Points out the P/E inversion after Walmart rose 10.8% during the chip selloff.

A confession of losses after 0DTE options were liquidated in Friday's plunge. The win rate was above 80%, but the average loss wiped out months of gains.

Summarizes a strong quarter, with crypto market cap up 39.6% ($3 trillion), BTC up 42.7% and ETH up 71.0% in Q3.

The bull side argued that Micron has no debt, about $100 billion in cash and $130 billion in free cash flow, is buying back shares at 6 times earnings, and has 40% of 2027 revenue under take-or-pay contracts, making this unlike past cycles. The bear side countered that it had sold all its Micron and kept only long-term compounders like META, TSM and GOOGL, arguing that chip stocks peak a year before spending does. Lam Research is down 37% from its June high, and the Mag 7 have outperformed chips for 10 straight sessions. The conclusion: the ROI of AI spending must be confirmed through the election and Big Tech earnings.

At the time of the broadcast, WTI was in the $103 range (+1.8%) and UAE Murban crude in the $109 range. Yergin said Gulf airports were closed, forcing him to travel five hours overland from Saudi Arabia to Bahrain, and called the postponement of Riyadh's FII reasonable. He said Iran is behind the Houthi attacks and warned that fertilizer, diesel and sulfur supply disruptions combined with El Niño could extend a food crisis into 2027.

Nvidia-backed Nscale is targeting a valuation of about $30 billion, but some investors have proposed $16~19 billion. CoreWeave and Nebius have fallen more than 20% since Nscale's IPO filing, with Microsoft's UK data center pullout cited as grounds. Amazon rose 5% after Morgan Stanley named it a top pick (AWS growth in the 40% range, next year's capex projected at about $350 billion), and Anthropic is on track to list before Thanksgiving.

Center head Kim Jang-yeol said negatives on both the supply side (CXMT) and demand side (CoreWeave) have now surfaced. By his math, CXMT's forward PER of 8.6x is pricier than Samsung Electronics and SK hynix (around 3x), and even assuming the worst case of operating profit halving, PBR-based fair values of KRW 200,000~250,000 for Samsung Electronics and KRW 1.1~1.45 million for SK hynix put current prices near a bottom. CEO Lee Kwon-hee called it an overreaction since neoclouds make up only 4~5% of the cloud market, but he did not see a trend reversal, describing it as a technical rebound recovering from a break below the lower Bollinger Band.

He diagnosed the plunge as fallout from high rates. Only CoreWeave's bonds collapsed, while those of peer Applied Digital and of META, GOOGL and MSFT held firm, so he sees it as a company-specific problem; a systemic crisis would require something of Oracle's size to wobble. He attributed foreign selling to the unwinding of US leveraged funds and fundraising for the Anthropic IPO, and said a 10-year yield of just 4.8% could bring relief. His conclusion is that a relief rally will come only after the early-November midterms.

CEO Yoo Chang-hee said the KOSPI's 12-month forward PER is 3.7x including SK hynix and 6.6x excluding it, the lowest in 10 years, and that the National Pension Service has room to buy aggressively with the KOSPI at 5,200~5,300. He noted, however, that the key this week is earnings from Blackstone, the biggest lender to data centers. CEO Song Jae-kyung cited Goldman data showing that the only times Korean stocks fell more than 20% over eight sessions were the IMF crisis, 2008 and 2020, and that excluding the IMF crisis, they rose 33~60% six months later.

He said the railway bubble, the Great Depression and the dot-com bubble all collapsed not because of companies, but because capital providers tightened funding as rates rose. Wall Street believes base effects will bring CPI to 2% in the second quarter of next year, but he warned that the same belief in 1999~2000 was followed by inflation rising to 3.8% and a collapse. As a sell signal, he pointed to a phase where short-term rates rise while the 10-year falls for more than a week.

Cocolink CEO Lee Dong-hak said GPU technology has a lifespan of 2~3 years, making debt-funded neoclouds very risky, and called AI profits a "lottery" that goes to only a few. Team leader Min Jae-ki views US high-yield spreads as the canary in the coal mine and said it is not too late to put in the last 10~20% after confirming they have turned; he sees the election as a sentiment factor rather than an earnings one.

A guest who had been cautious since June turned around, saying it is time to swap cash for stocks. He explained that neoclouds account for only about 6% of AI data centers, so even if CoreWeave collapses the whole ecosystem will not, and that the market now weighs ROIC over earnings. He put the KOSPI at a forward PBR of 1x at about 5,150 and saw the fourth quarter of this year through the first quarter of next year as a buying window.

According to a report by Taiwan's DigiTimes, major Chinese ESS companies are exiting the US business due to US regulations and stacked tariffs. North American ESS installations hit a quarterly record of 18.9GWh in the second quarter, and last year China held a 63.5% share of US non-EV battery imports versus Korea's 11.4%. In the Editor's PICK segment, CEO Park Chang-yoon advised staying on the sidelines until the KOSPI reclaims 6,000, while another guest recommended buying in installments before the election, seeing further upside if the stock breaks KRW 600,000.

With inflation high, the Fed could hike in December and again in March next year (UBS), and the rising terminal rate is weighing on gold. The view is that won strength is closely tied to currency conversion for Samsung Electronics' and SK hynix's share buybacks. It offered the paradox that although the Iran war has no exit, if WTI simply holds around $97 and Brent around $105, year-over-year oil inflation will disappear next year, giving the Fed room to cut.

He said that over the past 100 years, the S&P 500 rose in the fourth quarter of midterm election years 84% of the time and in the following one to two quarters 88% of the time, citing the resolution of political uncertainty. He warned that AI will change lives over 3~10 years while investors are looking only 3~30 months ahead. His conclusion: pick high-margin companies, hold the S&P 500 index and take a long view on AI stocks.

Last week Strategy bought 267 bitcoin while repurchasing $193 million of STRC preferred stock, spending about 8.7 times its bitcoin outlay. The average cost is $75,446. This is read as an attempt to restore STRC to its $100 par value and restart bitcoin purchases funded by preferred stock issuance.