[Good Morning Stock Market] US Stimulus Optimism Boosts Market... "Domestic Market Expected to Show Stock-by-Stock Trends"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] The US New York stock market all recorded record highs amid expectations for a $900 billion (about 1,000 trillion won) economic stimulus package. On the 17th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 30,303.37, up 148.83 points (0.49%) from the previous day. The Standard & Poor's (S&P) 500 index rose 21.31 points (0.58%) to 3,722.48, and the tech-heavy Nasdaq index closed at 12,764.75, up 106.56 points (0.84%). The market focused on the stimulus agreement situation and the novel coronavirus disease (COVID-19) situation.

Domestic experts agree that while the US economic stimulus agreement will clearly have a positive impact on the market, considering the increased likelihood of raising social distancing to level 3, a differentiated market by sector due to the spread of COVID-19 is expected.

◆ Kim Seong-geun, Researcher at Korea Investment & Securities = The stimulus agreement process has become more important. Until last week, disagreements remained unresolved, but ahead of the shutdown deadline on the 18th, negotiations have progressed by excluding state government support and legal protections for companies. The $900 billion stimulus package, which includes cash payments, weekly unemployment benefits of $300, and additional funding for small business loan funds, is likely to pass. Domestic fiscal policy momentum can also be expected. However, the domestic market needs to pay attention to the spread of COVID-19 in the short term. As daily confirmed cases have begun to exceed 1,000, discussions on raising social distancing to level 3 are underway. Since level 3 is a measure equivalent to a lockdown, the domestic economy is inevitably expected to be adversely affected.

◆ Kim Jung-won, Researcher at Hyundai Motor Securities = Although the domestic COVID-19 situation has recently worsened, the profit momentum of the Korean stock market is still considered favorable compared to the global stock market. Due to the weak dollar and preference for risk assets, funds continue to flow into global equity and emerging market equity funds. Even in the worst-case scenario of raising to level 3, the duration is expected to be limited to 1-2 months, so attention is needed on sectors with poor stock returns due to the recent COVID-19 spread impact.

◆ Shim Subin, Researcher at Kiwoom Securities = The US stock market closed higher on continued optimism about the stimulus package and COVID-19 vaccines. The risk-on mood continued due to optimism about the stimulus package and COVID-19 vaccines. News that Speaker Pelosi and Treasury Secretary Mnuchin met last night to discuss the final details of the stimulus package has raised expectations that an agreement will be reached within this week. Also, news that the FDA may officially grant emergency use authorization for Moderna's COVID-19 vaccine positively affected the market. However, the domestic stock market is expected to start in a narrow range. The Korean stock market is expected to show fluctuations with a stock-by-stock market depending on individual issues.

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