In today’s briefing:
- Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (20 June to 4 July 2025)
- Fed Policy Conduct: Limitations of Data-Dependent Approach Being Exposed
- Buy the Cannons: Exploring the Bull Case
- Iron Ore Tracker (23-June-2025): Iron Ore Due for A Small Bounce?
- Copper Tracker 23rd June 2025: Bullish On Low Inventory, But Need To Monitor China
- Forecasting Fed Policy: Hints From the Hard Data
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (20 June to 4 July 2025)
- In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (20 June to 4 July 2025).
- Kakaopay was the best performing stock in KOSPI in the past two weeks. It could be a key potential beneficiary of the increased use of stablecoin based system in Korea.
- The top 10 picks in this bi-weekly include S&T Holdings, Samsung Life Insurance, Samsung SDS, Samsung Securities, Hyundai Elevator, SK Hynix, Paradise, Hanwha System, Hanwha Aerospace, and Korea Kolmar.
Fed Policy Conduct: Limitations of Data-Dependent Approach Being Exposed
- The Fed left its policy rate unchanged last week but embraced a stagflationary outlook for the US economy by lowering growth and raising inflation and unemployment rate forecasts.
- The policy goals within the Fed’s dual mandate have not been equally pursued. Data-dependent conduct by the Fed runs the risk of policy becoming too reactionary and less forward-looking.
- Recent inflation trends should not prevent the Fed from reducing its policy rate. Some survey-based measures of consumers’ inflationary expectations appear to have rolled over, following tariff-induced spikes in April.
Buy the Cannons: Exploring the Bull Case
- Is this a time to embrace the contrarian adage of “buy on the cannons, sell on the trumpets”?
- While our base case still calls for a S&P 500 trading range, we are open to the possibility that stock prices could break out to all-time highs.
- We have outlined the bullish factors that should put a floor on stock prices should they weaken. Investors should monitor our bullish triggers that the bulls have taken control.
Iron Ore Tracker (23-June-2025): Iron Ore Due for A Small Bounce?
- Iron ore continued to slip into negative territory and has now breached the lower end of the range of 95-130 USD/ton, which it has maintained over the last four years.
- Data from CISA (China Iron and Steel Association) showed a decline in daily steel production YoY for May and June (tracking -4% YoY), after a lacklustre April (flat steel production).
- The bright spot is that China continues to maintain strong net exports with May numbers at 10.1 million tons (121 million tons annualized), and mill margins are improving.
Copper Tracker 23rd June 2025: Bullish On Low Inventory, But Need To Monitor China
- Copper prices on the spot market are set to breach 10,000 USD/ton again as inventory levels tighten on the LME, driven by a rush to ship metal to the US.
- Current KPIs in China, such as weak steel production (-2-3% YoY est.) and thermal power production (-19% YoY) for May temper our bullishness.
- We are bullish on copper in the short term, expecting it to break above $10,000 USD easily. However, we will closely monitor China data for potential impacts on the outlook.
Forecasting Fed Policy: Hints From the Hard Data
- The Fed is on hold and waiting the data to guide its monetary policy. Preliminary data shows that the economy is slowing, but not in an alarming recessionary fashion.
- Early indications from apparel CPI point to modest tariff pass-through effects on inflation, which is positive news.
- The key risk is that a prolonged Middle East conflict could boost commodity prices and raise the odds of a stagflation scenario of weak growth and rising inflation.
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