Recently, credit rating agency Moody's downgraded the U.S. national credit rating, prompting American stock investors, known as Seohak Gaemi, to start selling U.S. stocks en masse. The net buying trend that had persisted for seven months since October of last year has reversed to net selling this month. This is interpreted as an increase in investors seeking to realize profits and manage risks.
According to the Korea Securities Depository on the 22nd, domestic investors have net sold U.S. stocks worth $1.412 billion (approximately 1.95 trillion won) as of the 21st of this month. This is in stark contrast to the net buying that showed a preference since October of last year until April this year.
The stocks that Seohak Gaemi sold the most are related to semiconductors and artificial intelligence (AI). The 'SOXL,' which tracks the daily returns of the U.S. semiconductor sector threefold, recorded the highest net sell at $550 million, followed by Nvidia ($480 million), 'TQQQ,' which tracks the Nasdaq-100 Index's daily returns threefold ($350 million), and 'TSLL,' the Tesla twofold leveraged product ($260 million), among the top net sells.
During the same period, the stock that Seohak Gaemi bought the most was the defensive stock UnitedHealth Group ($270 million). This company is a leading private health insurance provider in the U.S. and is considered a dividend stock that offers stable dividends. Recently, as stock prices dropped over 40% compared to the beginning of the year due to allegations related to its Medicare business, it appears that low-priced buying interest has flowed in.
In addition, funds have flowed into the inverse ETF 'SOXS,' which tracks the U.S. semiconductor sector's revenue negatively threefold ($130 million), and the 20-year maturity U.S. long-term bond threefold leveraged ETF 'TMF' ($120 million). Furthermore, stocks such as Apple ($96 million), which have recently seen significant declines, and 'SQQQ,' which tracks the Nasdaq-100 Index's drop threefold ($89 million), have also been among the top net buys. In the midst of market instability, there is a notable preference for quality stocks and long-term bonds as defensive assets.
The currency exchange rate fluctuation played a major role in the shift of Seohak Gaemi to selling. Although the U.S. stock market rebounded from the effects of tariffs, recovering most of its losses, the won to dollar exchange rate fell from the mid-1400s last month to the 1300s this month, which increased the burden of exchange rate losses.
The market expects that the Trump administration will promote the depreciation of the dollar policy, thereby encouraging the appreciation of Asian currencies. In the securities industry, there is speculation that the won to dollar exchange rate may further decline to the low 1300s in the second half of the year.
Furthermore, concerns regarding the U.S. credit rating downgrade (Moody's) and stagflation (inflation amid economic recession) continue to persist in the macroeconomic environment. It seems that investors are withdrawing funds from the U.S. stock market due to the overlap of worries about widening fiscal deficits, interest rate hikes, and economic slowdown.
Choi Ye-chan, a researcher at Sangsangin Investment & Securities, diagnosed that "even with the rebound of the U.S. stock market, the real revenue worsened due to the strengthening of the won, prompting domestic investors to realize profits early." In fact, despite the S&P 500 and Nasdaq rising more than 6% and 8%, respectively, in May, Seohak Gaemi continued to net sell. This contrasts with their previous action of going on a buying spree when U.S. stock prices sharply dropped due to tariff shocks in April.