▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.
[Key Issue Briefing]
■ Weekly Market Risks: Domestic and global financial markets face three simultaneous variables this week — Nvidia's earnings, the U.S. personal consumption expenditures (PCE) price index, and the Bank of Korea's monetary policy committee meeting. The U.S. Federal Reserve is holding its Jackson Hole policy symposium in Wyoming, where Fed Chair Kevin Warsh will deliver the keynote address, drawing attention to whether it will offer clues about the future path of U.S. interest rates.
■ Shift in Buying Base: SK hynix's (000660.KS) large-scale share buyback has pushed "other corporations," a category with little presence until now, into a core buying force in the domestic market. As a result, an unusual phenomenon has emerged in which the index rises even when the three traditional players — retail investors, foreign investors and institutions — sell a combined more than 1 trillion won. Analysts expect share buybacks by the country's two major chipmakers to further strengthen the KOSPI's resistance to downside moves.
■ Rate-Hike Pressure: The prevailing view is that the Bank of Korea will raise its base rate for a second consecutive month, citing strong growth and unstable prices. But with U.S. Treasury yields surging on fiscal concerns in the United States and pushing up yields on Korean government bonds, some caution that the central bank will maintain its tightening stance while moderating the pace.
[News of Interest to Financial Product Investors]
1. Nvidia Earnings and U.S. PCE in Focus, With Jackson Hole Meeting Also Watched
- Key summary: The main variables for financial markets this week are Nvidia's earnings and the U.S. personal consumption expenditures (PCE) price index. Nvidia will release its fiscal second-quarter results for fiscal year 2027 on the 26th local time. Wall Street expects revenue of $95 billion in the second quarter, following $81.62 billion in the first quarter. The July core PCE rate, which excludes volatile items, is forecast at 3.3% from a year earlier, and if it matches expectations, the likelihood of a U.S. rate hike next month falls further. In Korea, the finalized 2025 birth statistics will be released on the 26th, followed on the 27th by the second-quarter household trends survey, the Bank of Korea's base-rate decision and its revised economic outlook.
- Key summary: SK hynix's 40 trillion won share buyback is reshaping the supply-and-demand structure of the domestic market. According to the Korea Exchange, SK hynix bought 650,000 of its own shares on both the 20th and the 21st — for 1.0908 trillion won and 1.1335 trillion won respectively — purchasing a combined 2.2243 trillion won over the two days. As a result, the net-buying share of "other corporations," which had accounted for 0.34% of daily KOSPI turnover through the 19th this year, surged elevenfold to 3.77% in just two days. SK hynix's buyback alone is enough to offset foreign investors' average daily net selling of 1.0266 trillion won this year. On the 21st, the KOSPI closed up 0.88% even as the three main players sold a combined net 1.0882 trillion won, with other corporations buying 1.0931 trillion won.
3. Will Rates Rise Again This Month? Surging Bond Yields Prompt Caution
- Key summary: The prevailing view is that the Bank of Korea's monetary policy committee will carry out a second straight hike on the 27th, following last month. In a survey by Seoul Economic Daily of 20 domestic economics and business professors and bond market experts, 13 (65%) expected a 0.25 percentage point hike, while 7 (35%) predicted a hold. Inflationary pressure was cited most often as grounds for a hike (8, or 40%), while November this year was the most common choice for the timing of a further increase (9, or 45%). Still, with U.S. Treasury yields surging on fiscal-deficit concerns and pushing up yields on Korean government bonds, some observers expect the central bank to moderate its pace of hikes. On the U.S. benchmark rate, 80% of respondents (16) expected a hold at the current level (3.5–3.75%).
[News for Reference by Financial Product Investors]
4. Nvidia AI Server Prices to Rise 17%
- Key summary: Nvidia will raise the rack prices of its high-performance AI servers, the Grace Blackwell 300 and the Vera Rubin 200, by up to 17% early next year. Surging memory chip prices are behind the move, which was reportedly notified to major customers including Microsoft, Google and Amazon Web Services (AWS). The Grace Blackwell 300 had cost about $3.7 million to $4 million per rack, and the Vera Rubin 200 around $7.8 million. The Vera Rubin is expected to rise above $8 million, and if the increase is confirmed, the cost of building a 1-gigawatt (GW)-class data center could rise by at least $5 billion (about 6.94 trillion won). Meanwhile, the memory supply shortage is shaking prices of general-purpose electronics as well, with the Amazon Echo Dot jumping 60% from $49.99 to $79.99.
5. Gold Rebounds on Weaker Dollar; Gold Mining ETFs Up 40% in a Month
- Key summary: With international gold prices recovering to $4,600 an ounce for the first time in three months, returns on gold-related exchange-traded funds (ETFs) are rising again. According to Koscom's ETF CHECK, as of the 21st, the one-month return of the WisdomTree Efficient Gold Plus Gold Miners Strategy (GDMN) was 47.60%, and that of the iShares MSCI Global Gold Miners (RING) was 42.85%. On the New York Mercantile Exchange, gold futures closed at $4,680.60 an ounce on the 21st local time, up 17.25% in a month, while the dollar index fell to 98.80, its lowest since May 14. Gold miners also have a high proportion of fixed costs, so gains in gold prices quickly translate into improved profitability — in the first quarter of this year, all-in sustaining costs (AISC) rose 16.2% while the gold price climbed 49.4%.
- Key summary: Analysts forecast a re-rating of LG Uplus, citing improved profitability in its core telecom business and profit contributions from its Paju AI data center (AIDC). According to FnGuide, analysts' average target price is 20,139 won, about 35% above the closing price of 14,870 won on the 21st. Annual operating profit forecasts stand at 1.13 trillion won from BNK Investment & Securities and 1.165 trillion won from KB Securities, while presales have been completed for the first building of the Paju AIDC — due to open in June 2027 — at around 20% of construction. The company has also set a target of a mid- to long-term payout ratio of at least 40% and a total shareholder return ratio of 40–60%, and the industry expects the dividend yield to rise from 4.7% this year to 5.9% in 2028.
▶ Read the article: In First Month of EU Steel Rules, Korean Exports Plunge 41%
▶ Read the article: Hyundai Motor Union Delays Strike; A Breakthrough Ahead?
▶ Read the article: PEFs Stuck Amid High Rates Find an Exit in Continuation Funds
