[Good Morning Stock Market] US-China Trade Agreement Signed... What Is the Impact on the Domestic Stock Market?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The US stock market closed higher on news of the signing of the US-China Phase One trade agreement. However, the gains were limited due to concerns that tariffs on China could still be imposed. Expectations that the US will not reduce existing tariffs until after the year-end presidential election emerged as a factor darkening future outlooks. While the signing is clearly positive for the domestic stock market, warnings have also been raised that volatility may increase going forward due to uncertainties such as the US-China Phase Two trade negotiations and the US presidential election.

◆ Yoonbo Kim, Researcher at Cape Investment & Securities: The US and China have officially signed the Phase One trade agreement. The main points include China's expansion of imports of US products and the opening of China's financial services market. However, President Trump has stated his intention to maintain the current level of tariffs on China until the conclusion of Phase Two trade negotiations. While the short-term momentum in domestic stock prices following the signing of this trade agreement is clearly valid, attention should be paid to the potential increase in short-term volatility due to expanded valuation pressures.

◆ Kwanghyuk Choi, Researcher at eBest Investment & Securities: The successful trade agreement between the US and China is positive in that it partially alleviates the trade conflict that began in 2018. At least, there is a psychological sense of stability as we may not see Trump's tweets about additional tariff hikes for the time being. However, there are still many considerations regarding whether this is positive for the Korean economy or global trade volume. Simply answering how global trade will proceed can be positive. According to leading economic indicators, the economy is highly likely to rebound, and the Chinese economy, which was problematic, is expected to see an increase in exports due to the agreement with the US. The fact that tariffs were frozen in this agreement means there is no factor for recovery of global demand lost due to tariff increases.

◆ Byunghyun Jo, Researcher at Yuanta Securities: The domestic stock market faces factors that could stimulate short-term profit-taking desires, such as the exhaustion of the material of the US-China Phase One trade agreement signing, technical fatigue from recent rises, and concerns about the macro cycle being priced in ahead of time. Considering only an average level of recovery in leading indicators, the potential for an increase up to 2450 points is calculated.

This content was produced with the assistance of AI translation services.