三星证券美股美股达到巅峰还为时过早20170906USstockmarketatapeakTooea

2017.9.6USstockmarketatapeak?TooearlyforconcernStoryoftheweekUSstockmarketatapeak?TheS&P500cyclicallyadjustedpriceearningsratio(CAPE)isatapost-1999high.Citingthis,NobellaureateandYaleeconomicsprofessorRobertShillermentionedthepossibilityofamajorcorrectionintheUSstockmarket.Sometechnicalanalystsalsosidewithhim—eg,JasonGoepfert,presidentofSundialCapitalResearch,arguesthat74HindenburgOmensignals—atechnicalpatternportendingastockmarketcrash—haveappearedytd.Thatsaid,webelievethatitisprematuretosaythattheUSmarketispeaking.Lookattheforest,notthetree:Wepointoutthreefactors:1)theUSmarket’sCAPEisinbettershapeintermsofqualitythanitwasin1999(thebubbleperiod);2)valuationsarenotathistoricallydemandinglevelswhencomparedtoexpectedreturnsofotherassets;and3)inflectionpointsinthepasthaveonlymaterializedwheninflationexpectationsarerelativelyhighandmonetarypolicytightensatanacceleratingpace,neitherofwhichseemimminent.Instead,wefocusonaCitigroup’sreboundingEconomicSurpriseIndexsinceend-June,expectingittodissipateearningsandvaluationconcerns.Market§orviewsMarket:DespitetheNorthKoreannuclearthreat,thetwomodelscomprisingtheKospiCompassstillhintatbullishness.Wethusrecommendexpandingexposuretoequitiesonincreasedmarketvolatility.Setthemodelaside,webelievethattherisksontheKoreanpeninsulaarenearingastrategiccriticalmassandheadingfordialogue.Sector:Oursectorviewsarelargelyunchangedfromlastweek,withthesteel,non-ferrousmetal,banking,IThardware,andsemiconductorssectorsstillpreferredbasedontheirsolid2Hearningsoutlooks.Theutilitiesanddisplaysectors,however,haveslidintovaluetraps.KospiCompassSectorVEMmodelTechnical10Overbought9Overbought8Bull7Bull6Bull5Neutral4Neutral3Bear2Bear1Bear0Oversold-1OversoldFundamental0Valuetrap1Bull2Bull3Bull4Expensive-1Bear-2Bear-3BearNote:1-monthinvestmenthorizon;outcomesmaydifferfromtheopinionsofourequityanalystsSource:SamsungSecurit[e-mail]@[e-mail]82220207792Tradingfirms/capitalgoods,cosmetics/apparel/toys,energy,securitieshealthcaretelecomservices,chemicalsSteel,insurance,shipbuildingBanks,IThardware,ITappliances,semiconductor,non-ferrousmetalsAutos&autoparts,transportation,machineryhotel/leisureservicesmedia/education,software,retailconsumerstaplesconstructiondisplayutilitiesINDEXPERFORMANCE(%)1W1M3MYTDKospi(0.9)(2.7)0.616.4Kosdaq1.81.41.34.8MARKETVALUATION(12mFwd)(x)P/EP/BROEKospi9.21.010.7Kosdaq14.62.114.3EPSFORECASTCHANGE(12mFwd)(%)1M3M6MKospi1.36.318.0Kosdaq2.66.815.2StrategyWeekly2017.9.62NorthKorea’snucleartest—NorthKoreatopursuedialogueafternearingaredlineNorthKoreaonSep3at12:30pmconducteditssixthnucleartestatitsPunggye-rinucleartestsiteinNorthHamgyongbukProvince.SouthKorea’smilitaryestimatedthenuclearyieldatatleast50ktTNT,whiletheUSGeologicalSurveyputthefigureat100ktTNT.NorthKorea’sNuclearWeaponsInstituteclaimsthegoalofthetestwastodevelopahydrogenbombthatcanbeloadedontoanintercontinentalballisticmissile(ICBM).Meanwhile,NorthKorea’sstatenewsagencysaidthatthedevelopmentwasdirectedbyitsleaderKimJong-un,goingastepfurtherfrompastremarksstatingthenationisstrivingtomakevariouskindsoflighterandsmallernuclearwarheads.Thetestwaswidelyexpected.SouthKorea’sinformationagencieshadsaidthattheydetectedPyongyang’sintentiontoconductanucleartestandexpectedadetonationtooccuronSep9,NorthKorea’sFoundationDayholiday.Nevertheless,thesixthtest—alongsiderecentsuccessfullaunchesofanintermediate-rangeballisticmissileandICBM—showsthatthenationdoesindeedpossessmissile-readynuclearwarheads.TheNorthislikelytoshowoffitsabilitytohitthemainlandUSby:1)firingtheHwasong-14ICBMonanordinaryangle;and2)carryingoutmorenucleartests.Paradoxically,theheightenedrisksontheKoreanpeninsulamayactuallyleadNorthKoreaandtheUStothenegotiationtable,asdemandfordialoguefrominterestedparties(eg,SouthKorea,China,andJapan)shouldrise.Indeed,NorthKorealikelydevelopsnuclearweaponstoseeklong-termsecurityguaranteesforitsregime,whiletheUSseekstoeliminateanynuclearthreats.We,contrarytosomeconcerns,believechancesofmilitaryconflictsontheKoreanpeninsulaareextremelylow,asneithertheNorthnortheUScanachievetheirrespectivegoalinasafemannerviamilitaryoptions.Theonsetofandactualnegotiationsbetweenthetwonationsshouldbebumpy.NorthKoreainApr2012reviseditsSocialistConstitutionanddeclareditasanuclearstate.Suchastatus,however,cannotbeacceptedbytheinternationalcommunityundertheTreatyontheNon-ProliferationofNuclearWeapons.TheUSdemandsthattheNorthmustgiveupitsentirenuclearprogramasaconditionfordialogue.OnevariableshouldbetheUSmidtermelectioninNov2018.DissolvingthenuclearthreatfromPyongyangwouldleavealastinglegacyforTrump,whosepoliticalstandinghasplummetedlately.TheNorth—whilewellawareofthis—isapproachingtheredline.Theimpactonthefinancialmarketsshoulddifferaccordingtotimeframe.Inthenearterm,impactsshouldbelimited,asconcernsoverwarontheKoreanpeninsulalikelypeakedinAugust,andNorthKorea’ssixthnucleartestwaslargelyexpected.Impactso