[Good Morning Stock Market] US Stocks Mixed Amid Stimulus Expansion vs. Profit-Taking... "Domestic Market Shows Stock-Specific Trends"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] On the 23rd (local time), the US stock market closed mixed as expectations for an expansion of the COVID-19 relief package and profit-taking selling clashed. The domestic stock market is expected to experience significant volatility among individual stocks due to profit-taking desires in some untact (contactless) sectors.

◆ Choi Jaewon, Kiwoom Securities Researcher= The US stock market closed mixed with a differentiated trend as energy and financial sectors rose while real estate and IT sectors declined. Early in the session, news that Brexit negotiations were nearing a deal caused the pound and euro to strengthen and the dollar to weaken, leading the index to start up 0.39%. Optimism related to the relief package, vaccine, and Brexit continued, expanding the gain to 0.64%.

However, profit-taking selling centered on Apple emerged near the close, resulting in a slight gain. President Trump's request on the 23rd to revise the additional relief package increased volatility in Asian markets but had limited impact on the US market. The market seems to believe that even if Trump vetoes the bill, it will not be a major issue because the bill has sufficient votes in both the House and Senate.

On this day, the Korean stock market is expected to start with a rise of about 0.5% to 1%, led by value stocks due to a weaker dollar, rising government bond yields, and higher international oil prices. Profit-taking demand for untact stocks is high, so significant volatility among individual stocks is expected.

◆ Kim Daejun, Korea Investment & Securities Researcher= Although there will be no break from the medium-term uptrend, seasonal factors related to the year-end, the upcoming ex-dividend date on the 29th, and the burden of the 12-month forward PER approaching 13 times will act as factors clouding the index’s direction.

At this point, it is important to consider which leading sectors will drive the market going forward. Clues can be found in the trends of new COVID-19 cases and copper prices. Pfizer’s vaccine was first used in the UK on the 2nd. However, due to the spread of a variant coronavirus in the UK, the number of patients has not decreased.

The market sentiment can also be gauged through the relative strength of copper prices compared to gold. Recently, copper has been relatively stronger than gold, a safe-haven asset. This implies expectations that the economy will improve from its current state. It is important to remember that when copper prices rise, not only non-ferrous metals but also the entire cyclical sector tends to strengthen in the stock market.

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