[Good Morning Stock Market] US S&P and Nasdaq Both Close at Record Highs... Will the Domestic Market Continue Its Uptrend?

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The Standard & Poor's (S&P) 500 index and the Nasdaq index on the New York Stock Exchange both hit record highs on the 14th (local time). On that day, the S&P 500 rose 7.71 points (0.18%) from the previous close to 4,255.15. Fueled by strength in technology stocks, it set a new record high for the third consecutive trading day. The Nasdaq also climbed 104.82 points (0.74%) to 14,174.14, breaking its all-time high record.

The reason these indices continue to hit record highs is interpreted as the 10-year U.S. Treasury yield stabilizing, which supports the rise of growth stocks sensitive to interest rates. The 10-year Treasury yield dropped to 1.43% on the 11th, the lowest point in the past three months. Although it rose to around 1.50% on the day, it remains at a low level.

Attention is focused on whether the domestic stock market will continue its upward trend due to the strength of U.S. technology stocks. The KOSPI closed higher for the third consecutive trading day the previous day. The KOSPI closed at 3,252.13, up 2.81 points (0.09%) from the previous trading day, surpassing the previous closing record high of 3,252.12 set on the 7th. Experts expect the domestic stock market to generally show an upward trend influenced by the strength of U.S. technology stocks. They especially advise selecting and investing in stocks with strong potential for earnings recovery among technology stocks.

◆ Sang-young Seo, Researcher at Mirae Asset Securities = The Korean stock market fell during the day as some profit-taking emerged following Friday's rise. However, with major countries such as China on holiday and the Japanese stock market showing strength due to expectations for the Olympics, positive movements in surrounding markets limited the decline. Additionally, positive news about some biotech companies improved investor sentiment. In particular, as foreign investors reduced their selling pressure during the day, the market ultimately closed at a record high based on the closing price.

On that day, the U.S. stock market showed mixed results as some technology stocks were strong, but contact and financial stocks were weak. Due to this, the KOSPI is expected to start flat. Notably, financial stocks, which have been affected by concerns over earnings slowdown, showed weakness in the U.S. market.

It is important to note that some technology stocks with high expectations for earnings improvement showed strength. This suggests that after passing the important event of the Federal Open Market Committee (FOMC), the market will prepare for the full earnings season, and changes in earnings estimates will determine market direction. Sectors with clear earnings improvement but low stock price gains such as energy, chemicals, steel, trading companies & capital goods, cosmetics/apparel, securities, insurance, semiconductors, and displays are noteworthy.

◆ Ji-young Han, Researcher at Kiwoom Securities = In the Korean stock market, influenced by the strength of U.S. technology stocks, a rotation among growth stocks such as internet and biotech, which have reduced interest rate sensitivity, is expected to create an intraday upward trend. Currently, there is no clear leading theme in terms of sectors or themes, so rapid rotation among theme stocks based on individual issues is anticipated. The KOSPI may break new highs again during the day, but since major U.S. economic indicators such as retail sales, industrial production, and producer prices will be released after the market closes, cautious sentiment surrounding these data is expected to affect foreign investor flows and limit the overall market upside.

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