Goldman Sachs: Leveraged ETFs amplify market volatility; the semiconductor cycle has not yet topped out

Deep Tide TechFlow message: On July 14, according to JIN10 Data, Goldman Sachs said that the recent violent swings in global tech stocks were not caused by a reversal in fundamentals, but by a liquidity “deleveraging” storm triggered by highly leveraged trading. Tracking the 2x leveraged ETFs of Samsung Electronics and SK hynix, their intraday declines at one point exceeded 30%. Forced selling/liquidation set off a vicious cycle, and about 62% of the net selling amount by Korean industry institutional investors stemmed from the liquidation of ETFs of this kind. In the U.S. stock market, as of the 12 months through this year’s May, the growth rate of margin debt reached as high as 54%, landing in the 10th decile of the historical range, highlighting the fragility of the market structure.

Even so, Goldman Sachs remains optimistic about the semiconductor outlook. It believes profit forecasts for Samsung Electronics and SK hynix have not been cut, and that the shortage of memory chip supply may continue into the second half of 2028. This round of pullback is more of a “position clean-up” than an industry downturn. On the technical side, Goldman Sachs suggested focusing on the KOSPI Index’s key support level at 6800. In extreme cases, the 6000–6100 range will form very strong support.