[Morning Briefing] New York stocks fall amid AI bubble talk…Amazon also issues bonds

◆New York stocks fall across the board as caution grows over AI bubble talk

The three major U.S. stock indexes all fell. On the 17th local time, the Dow Jones Industrial Average closed at 46,590.24, down 1.18% from the previous session, the S&P 500 fell 0.92% to 6,672.41, and the Nasdaq dropped 0.84% to 22,708.07. As concerns about an artificial intelligence (AI) bubble spread, market caution heightened ahead of NVIDIA's third-quarter earnings announcement on the 19th. Billionaire investor Peter Thiel's hedge fund sold all of its NVIDIA shares, and Michael Burry, famous for 'The Big Short,' also bet on positions that would profit if NVIDIA and Palantir Technologies shares fell. If NVIDIA reports third-quarter results below expectations, investor sentiment is likely to deteriorate further.

◆Amazon to issue company bonds worth around KRW 17.6 trillion…Big tech turns to bond issuance

Amazon has decided to issue corporate bonds worth $12 billion (about KRW 17.6 trillion). Much of the funds raised are expected to be used for investments in AI infrastructure for its cloud services. Amazon CEO Andy Jassy has said that Amazon's data center capacity will double by 2027. Giant tech companies are issuing large amounts of bonds to fund AI infrastructure investments. Meta issued $30 billion in corporate bonds last month, and Oracle also raised $18 billion in the bond market last September. The judgment is that even at astronomical cost, building new data centers and securing computing power is necessary to gain a competitive edge.

◆New international student enrollment at U.S. universities down 17%…impact of Trump immigration policies

The number of new international students enrolled at U.S. universities for this fall semester decreased by 17% year-on-year. The Institute of International Education, a U.S. nonprofit, surveyed 825 U.S. colleges and universities and found that 57% of institutions reported a decline in new international student enrollment, citing concerns over obtaining visas (96%) and travel restrictions (68%) as reasons. Earlier, the Trump administration tightened visa screenings for international students after a series of anti-Jewish and pro-Palestinian protests at U.S. universities. In May, it attempted to block foreign student enrollment at Harvard University and even suspended visa interviews to strengthen SNS screening of student visa applicants.

◆North Korea: "South Korea's approval of possessing nuclear submarines is a grave situation…we will take countermeasures"

North Korea said the U.S.-South Korea summit fact sheet and the joint statement of the U.S.-Korea Security Consultative Meeting (SCM) "once again formalized and politicized the U.S.-ROK hostile attempt to remain adversarial toward our state." It reacted strongly to the U.S. and South Korea using the expression 'the complete denuclearization of North Korea,' calling it "a denial of our state's reality and existence," and condemned South Korea's approval to build nuclear submarines as "a prelude to pursuing its own nuclear armament" and "a serious development that would lead to an uncontrollable nuclear situation." Regarding the acquisition of uranium enrichment and spent fuel reprocessing authority, it criticized that it "paves the way to nurture [South Korea] into a 'quasi-nuclear power'" and said it "exposes the United States' extremely dangerous confrontation attempt."

◆Second round of pension reform begins…debate over KRW 1,700 trillion 'debt bomb' for future generations

As the first reform plan, which raises National Pension contribution rates and the income replacement rate, will be implemented from next year, the parliamentary Special Committee on Pension Reform has begun discussions on structural reform, kicking off the second phase of reform. The KRW 1,700 trillion scale of 'unfunded liabilities' has emerged as a hot issue. Unfunded liabilities are the difference between the total pension amount the National Pension will pay future beneficiaries and the current reserve funds plus future expected revenue. One side argues that this 'debt bomb' being passed to future generations should be clearly disclosed to face fiscal reality, while the other side rebuts that it is not a confirmed debt and that such disclosure unnecessarily stokes fear. Depending on views of the unfunded liabilities, the direction of pension reform is likely to differ.

◆Most regions nationwide plunge below freezing with severe cold…Seoul -3°C

On Tuesday the 18th, cold air flowing in from the north brought morning temperatures below freezing in most regions nationwide. Strong winds, mainly along the west coast, will make the wind chill lower and people should be mindful of the cold through the afternoon. Morning low temperatures are -8 to 5°C, and daytime highs are 4 to 12°C. △Seoul -3°C △Incheon -1°C △Chuncheon -5°C △Gangneung -1°C △Daejeon -2°C will fall below freezing. Most of the country will be mostly clear, while the Chungcheong and Jeolla regions and Jeju Island will be mostly cloudy. Occasional rain or snow is expected along the Chungnam west coast, western Jeolla, and Jeju Island. Fine dust concentrations are expected to be 'good' across all regions.

O Se-sung, Hankyung.com reporter sesung@hankyung.com