Instead, "Semiconductors Expected to Rebound in US Stock Market... SOXX Recommended"

Daishin Securities identified the 'semiconductor' sector as one that experienced an excessive decline in the US stock market and analyzed that a technical rebound is expected. As an ETF of interest, they suggested the 'iShares Semiconductor ETF (SOXX)', a representative ETF investing in the US semiconductor industry.

On the 25th, Hyunjung Park, a researcher at Daishin Securities, stated in the report titled 'Sectors with Excessive Declines Found in the US Stock Market, Semiconductor. Technical Rebound Expected' that "One of the sectors that experienced a large decline in the US stock market since the beginning of the year is Information Technology (-9.5%)."

The US stock market, which had plunged sharply due to concerns such as the so-called 'Trump session,' has been rebounding since the low point on the 13th. Researcher Park particularly evaluated that the market somewhat eased after Jerome Powell, Chairman of the Federal Reserve (Fed), diagnosed at the March Federal Open Market Committee (FOMC) that the US economy continues to expand at a solid pace according to recent indicators. He said, "The VIX (Volatility Index) futures market has also returned to a contango market (where futures prices with longer maturities are higher than those with nearer maturities), showing improvement in excessively deteriorated investor sentiment," adding, "In a situation that is not a recession, the phase where investor sentiment improves is a period where a technical rebound in the US stock market can be anticipated."

Accordingly, Researcher Park pointed out Information Technology (-9.5%) as one of the sectors with a large decline since the beginning of the year, noting, "The sector declined led by semiconductors after the deep sell-off. The semiconductor sector has fallen 11.5% since the beginning of the year," highlighting the possibility of a rebound. He also mentioned, "Although there was a large outflow of funds from semiconductor ETFs after the deep sell-off, it has recently been subsiding."

He stated, "The 12-month forward earnings revision ratio for the semiconductor sector fell to -41.4% after the deep sell-off but has recently turned positive," and added, "The 3-month average earnings revision ratio for the semiconductor sector has also recently improved slightly. The 12-month forward EPS growth rate is likely to improve." The earnings revision ratio being below zero means that more analysts are revising earnings forecasts downward than upward.

As an ETF of interest, he suggested the iShares Semiconductor ETF (SOXX), a product that diversifies investment in semiconductor design, manufacturing, and supply companies listed on the US stock market. Among US-listed semiconductor ETFs, it ranks second in assets under management (AUM), and compared to the first-ranked SMH (VanEck Semiconductor ETF), it has a lower weighting of Nvidia. Researcher Park said, "Given that investor interest in Nvidia has weakened compared to the past, I prefer SOXX over SMH," explaining that "SOXX's sub-sector composition consists of 77.1% semiconductors and 22.7% semiconductor equipment."