Gasoline Printed 34 Percent And Seoul Halted Trading

At 12:38 p.m. Thursday in Seoul, the Korea Exchange halted trading across the entire Kospi for twenty minutes, a market-wide circuit breaker that followed a sell sidecar at 9:07 that morning. The index closed down 7.57 percent at 5,554.22 after an intraday low of 5,450.81, the Korea Herald reported, with Samsung Electronics down 9.48 percent, SK hynix down 11.06 percent, foreign investors the main sellers and the won weakening past 1,350 per dollar.

Tokyo followed. The Nikkei 225 closed down 4.9 percent at 64,425.95, according to The Standard of Hong Kong, with the chip-equipment maker Advantest down 15 percent and SoftBank Group down 9.3 percent.

Both exchanges had opened into what New York did the day before. On Wednesday the S&P 500 fell 1.11 percent to 7,718.94 and the Nasdaq Composite 1.88 percent to 26,692.87, per BBN Times, while the Dow ended little changed, down 0.09 percent. Saxo reported the Philadelphia Semiconductor Index down 4.5 percent and the AI cloud company CoreWeave down more than 15 percent.

The Bureau of Labor Statistics had printed September consumer prices at 8:30 a.m. ET that Wednesday: up 0.6 percent on the month and 3.7 percent on the year, against a consensus of 3.6 percent and an August reading of 3.4. Gasoline rose 9.1 percent on the month and 34.2 percent on the year. Core prices, which leave out food and energy, rose 0.3 percent on the month and 2.6 percent on the year.

The Korea Herald tied the Seoul sell-off to worry that the Fed could raise rates further after that number. The Standard added reports of distressed debt at CoreWeave and doubts about AI spending. This letter cannot say how much of the fall belongs to which.

The Kospi crossed 9,000 in June, Euronews reported, citing the Associated Press. It closed Thursday at 5,554.22.

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The pressure had been building in a narrower place. Saxo’s London desk reported that the Philadelphia Semiconductor Index fell for a sixth straight session on Wednesday, and that the Nasdaq-100, down about 2 percent, touched its 50-day moving average at 29,862. Saxo also put the Russell 2000 down 1.93 percent, more than 10 percent below its August peak.

The financing sits underneath. The Standard reported that media accounts of distressed debt at CoreWeave hit technology stocks, and that analysts cited growing concern about AI capital spending and the profitability of AI businesses. This letter has not seen a CoreWeave filing on the debt and prints the claim as reported.

Then came the earnings that were supposed to steady it. TSMC reported a sixth straight record quarter on Thursday, with profit up 68.7 percent and revenue up 41 percent from a year earlier, per Saxo, whose London note said its shares fell anyway.

The rate market priced the day in hours. CME FedWatch odds of a hike at the 28 October meeting went above 50 percent at one point on Wednesday and were below 30 percent by the close, per Saxo, and San Francisco Fed President Mary Daly said further hikes are likely needed but there is no urgency to decide this month. Those odds are market probabilities. They are not Fed statements.

Treasuries rallied into Thursday. The 2-year yield rose as much as 16 basis points after the print and was near 4.73 percent in Thursday’s early trade, below where it began Wednesday, and the 10-year was below 5.11 percent, a three-week low, both per Saxo and both intraday.

On one side, a chipmaker reporting profit up 68.7 percent. On the other, the index that holds its industry down 4.5 percent in one session.

A note on yesterday first. Yesterday’s letter used 3.6 percent as the consensus for September CPI and set aside an earlier tracker’s 3.7. The print was 3.7. The consensus was a tenth short, and the tracker turned out to match.

The exposure shows up in several places at once. Regular gasoline averaged about $4.35 a gallon on 13 October, $1.27 above a year earlier, per AAA as reported yesterday, and the CPI puts the September rise at 34.2 percent. The 10-year Treasury closed Wednesday at 5.192 percent, per Saxo. The Nasdaq Composite closed at 26,692.87, down 1.88 percent.

Gold fell as much as 2.1 percent after the print, to near $4,100 an ounce, and was back near $4,140 on Thursday morning, per Saxo’s Asia desk. That is an intraday price and will have moved.

Thursday’s calendar opens at 8:30 a.m. ET with September producer prices, September retail sales and weekly jobless claims, per Saxo. Fed speakers follow: Goolsbee at 10:00 a.m. ET and Hammack at 4:30 p.m. ET, on Saxo’s GMT schedule.

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