Meta's Muse Frenzy Lifts Nasdaq to Record as Tech Rally Reignites

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-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.

1. Magnificent Seven ETF Returns on Meta's Muse Frenzy

Key points: Meta's AI agent Muse logged 730,000 downloads in its first five days, outpacing ChatGPT, Claude and Grok, and on the 18th it took the No. 1 spot among free apps on Apple's U.S. App Store, sending Meta shares up 11.4% for their biggest gain in about a year. Muse offers a free basic tier alongside paid subscriptions at $20 and $100 a month, raising expectations for a new revenue stream beyond advertising, and a Truist analyst called Muse the most important consumer product Meta has released in years. On expectations that large-scale inference computing for AI agents will drive demand for server CPUs, AMD's market capitalization topped $1 trillion for the first time and Intel jumped 12%, while the Magnificent Seven ETF set a record high for the first time since May. The Nasdaq Composite rose 2.3% for a third consecutive record close, and bitcoin also climbed to the $86,000 level for the first time since January, showing funds flowing broadly into risk assets.

2. [Investment Window] Will 1997's 'One and Done' Repeat?

Key points: With the Federal Reserve raising its benchmark rate by 25 basis points for the first time in three years and two months, whether the one-off tightening under the Greenspan-era Fed in 1997 will be repeated has emerged as the market's key focus. In 1997 inflation was stable and the fiscal balance was on the verge of turning to surplus, whereas fourth-quarter PCE inflation this year stands at 3.7% and core PCE at 3.4%, while the Trump administration carries the burden of a cumulative fiscal deficit and high long-term rates. Analysis suggests the Fed had no choice but to tighten further to contain second-round effects as energy supply disruptions stemming from the Middle East drag on, and the market is heavily pricing in the possibility of at least one more hike this year. The prevailing view is that the Fed's base scenario is at least one more hike, followed by a hold for a considerable period while it confirms a slowing inflation trend.

3. Corporate Bond Maturities Shorten on High Rates; Sub-Three-Year Share at Two-Year High

Key points: Among corporate bonds issued from the 1st to the 21st of this month, those with maturities of less than three years accounted for 41.8%, up sharply from around 30% on average between June and August and the highest in about two years, since October 2024. Behind the shift, yields on unsecured five-year corporate bonds rated AA- surged to 4.89% this month from 3.79% at the start of the year, while outstanding commercial paper issuance rose 7.3% to 219 trillion won from 204 trillion won at the end of last year, pointing to broadly rising reliance on short-term borrowing. SK REIT structured its tranches mainly around one- and two-year paper, and Lotte REIT, which faces demand forecasting in October, plans to issue 125 billion won of 18-month paper, showing the shortening trend spreading across the market. NICE Investors Service warned that if the expanded share of short-term paper becomes entrenched, it could lead to difficulty in refinancing during a market shock such as the Legoland episode, triggering liquidity crises at companies holding little cash.

4. Korean Investors Chasing Big Tech and Leverage Shift Into ETFs

Key points: Over the past month, the top net purchase among overseas stocks by domestic investors was SGOV, an ultra-short U.S. Treasury ETF, at $246.59 million, a sharp reshuffling toward diversification and stability from a portfolio centered a month earlier on SOXL, a triple-leveraged semiconductor ETF, and growth stocks. ETFs accounted for six of the top 10 net purchases, including SCHD in second place at $212.51 million, VOO in third at $199.17 million and QQQ in fifth at $142.93 million, while in the domestic ETF market products tracking benchmark U.S. indexes such as TIGER U.S. S&P 500 at 465.7 billion won and KODEX U.S. Nasdaq 100 at 273 billion won dominated retail net buying. Analysts attribute the shift to growing demand for stable investing through asset diversification rather than trading short-term moves in individual stocks. About 2,084 trillion won has flowed into U.S.-listed ETFs so far this year, already exceeding last year's annual record of about 2,056 trillion won, and forecasts call for further expansion once seasonal fourth-quarter inflows are added.

5. KT&G to Buy Back 360 Billion Won in Shares as Stock Rebounds

Key points: KT&G said in a regulatory filing that it will acquire 2,071,346 common shares for 360 billion won from the 23rd through December 22, specifying that the purpose is to enhance shareholder value and to cancel the shares. The move is part of a medium- to long-term shareholder return plan totaling more than 3.7 trillion won from 2024 to 2027, including 2.4 trillion won in dividends and 1.3 trillion won in share buybacks, with targets of a total shareholder return ratio of more than 100% of net profit and a dividend payout ratio of more than 50%. Following the cancellation of 3.3 million shares in February, the company canceled its entire holding of about 10.86 million treasury shares in April, bringing the cumulative cancellation ratio to 22.4%, already above its original target, and the stock, which had fallen to 169,800 won intraday, rebounded to 174,400 won after the buyback filing. A positive outlook was presented that overseas tobacco earnings and capacity for shareholder returns will grow steadily over the medium term as investment to diversify global production bases wraps up.

6. CATL Shares Waver on Fears of Losing Chinese Automaker Clients

Key points: Shares of CATL, the world's largest battery maker, tumbled 24.04% during September and 36.5% from their May peak, driving the stock near its 52-week low of 295.55 yuan. Li Auto invested 2.65 billion yuan to become the second-largest shareholder of Sunwoda and fitted its new vehicles with Sunwoda batteries instead of CATL's, while Xiaomi announced joint battery development with CALB and Xpeng increased its supply share from EVE Energy, in a string of supply chain diversification moves by major clients. Even as profits in China's automaking industry plunged 20% from January to July this year, CATL posted net profit of 43.2 billion yuan in the first half, twice the combined 21 billion yuan of 15 listed automakers, and analysts said this profit gap spurred clients to look elsewhere. While observers expect CATL to retain its market dominance for some time given high technological barriers to entry in batteries, the company is also accelerating portfolio diversification, aiming to raise the share of energy storage system sales to 50% within a few years from 25% now.