In today’s briefing:
- Recent Bloodbath Margin Calls in the Korean Stock Market – 0.36 Million Margin Accounts Liquidated
- EA: Rates Rising Into September
- HONG KONG ALPHA PORTFOLIO: (August 2026)
- Morning Market Notes: Estimated Trading Range Peak of $88.00 Per Barrel Exceeded; Mea Culpa
- Weekly letter: Warsh reassures bond investors and hurts gold prices, Nvidia’s impressive numbers…
Recent Bloodbath Margin Calls in the Korean Stock Market – 0.36 Million Margin Accounts Liquidated
- In this insight, I provide a detailed analysis of the recent major bloodbath margin calls and liquidations in the Korean stock market, especially in the summer of 2026.
- There are about 1.5 million active margin accounts in Korea, of which more than 1.2 million margin accounts received margin call triggers and 0.36 million have been liquidated this summer.
- It may take more time for retail Korean investors to regain confidence and re-enter the domestic market more actively due to recent trauma from their margin calls and liquidations.
EA: Rates Rising Into September
- EA inflation’s 31bp rise in August to 3.3% more than completed the reversal of June’s premature optimism. Benign food and goods price rises aren’t seen in services and core.
- Resurgent inflationary pressures reinforce the ECB’s July signal that it would hike again in September. Core inflation is too high, and upside risks remain.
- Demonstrated vigilance should help preserve the anchor of expectations at 2%, avoiding the BoE’s ongoing failure. Two hikes should be sufficient if a winter squeeze is avoided.
HONG KONG ALPHA PORTFOLIO: (August 2026)
- HK Alpha portfolio gained 3.45% in August, outperforming its benchmark by 2.67%. Since inception, the portfolio has outperformed HK indexes by 60% to 84%. HK ALPHA is up 14.35% YTD.
- The Sharpe ratio stands at 1.21, compared with a benchmark of 0.68 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
- The portfolio gained in the healthcare, industrial, and technology sectors in August, while utilities and telecom exposure dragged on performance.
Morning Market Notes: Estimated Trading Range Peak of $88.00 Per Barrel Exceeded; Mea Culpa
- Our trading range peak for the October NYMEX contract has obviously been breached, but we suggest the jury remains out in terms of any substantial further upside.
- We have been recommending that if October hit roughly $88.00 per barrel, we would sell small volumes of December with tight stops; we hope we have not inflicted much damage.
- We will hold fast for the time being to see if the market will move much higher, or if the peak will end up only modestly above our previous parameter.
Weekly letter: Warsh reassures bond investors and hurts gold prices, Nvidia’s impressive numbers…
- Macro-wise, next week is crucial for labour market data, culminating in August’s US employment report (Fri), along with ISM’s manufacturing and services PMIs, revised Q2 productivity, and the Fed’s Beige Book.
- The Bank of Canada meets Wednesday and is expected to hold. Palo Alto Networks, Broadcom, and Snowflake report earnings this week, following the strong reception given to Nvidia, Salesforce, and CrowdStrike last week.
- The ISM surveys (manufacturing Tuesday, services Thursday) will also be closely watched as real-time indicators of whether the US economy is cooling in line with the softer labour data.
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