[Good Morning Stock Market] US Stock Market Mixed Amid Weak Employment Data... Impact on Domestic Market

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] The U.S. New York stock market closed mixed amid disappointing private employment data.

On the 1st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,312.53, down 48.20 points (0.14%) from the previous day. The Standard & Poor's (S&P) 500 index rose 1.41 points (0.03%) to 4,524.09, and the tech-heavy Nasdaq index closed at 15,309.38, up 50.15 points (0.33%).

Investors focused on economic indicators released that day, including the August private employment figures. Contrary to market expectations of an increase of about 600,000, the actual increase in August ADP nonfarm employment was only 374,000, significantly missing market expectations.

On the other hand, as the employment data fell far short of market expectations, expectations spread in the market that the Federal Reserve would be cautious about changing monetary policy. This led to a notable strength in tech stocks, with the Nasdaq index setting another all-time high that day.

However, domestic market experts analyze that since the Fed had already confirmed the tapering policy to reduce asset purchase programs within the year, the impact on the Korean stock market is expected to be limited.

◆ Seo Sangyoung, Researcher at Mirae Asset Securities= The U.S. stock market rally was driven by the Institute for Supply Management (ISM) manufacturing index, which remained solid, but this was mainly due to a sharp increase in inventory indices, while detailed components showed limited increases or declines, reducing the overall impact.

Additionally, U.S. employment data slowed down; although employment in the hospitality sector increased due to the end of additional unemployment benefits, except for a surge in construction employment, other sectors showed weak employment, which is a burden as it is not a positive result. The weak employment data raised expectations that the Fed might delay changes in monetary policy, but since the Fed has already made tapering a fait accompli within the year, this too is expected to have a limited impact.

However, remarks from ECB President Lagarde indicating skepticism about further large-scale liquidity provision are a burden. Considering this, the KOSPI is expected to start with an increase of around 0.3%. However, after a slight rise at the start, profit-taking selling is expected to emerge.

◆ Han Jiyoung, Researcher at Kiwoom Securities= The Korean stock market is expected to show limited price movement due to some profit-taking following three consecutive days of gains and anticipation of U.S. employment data, despite the strong U.S. ISM manufacturing PMI closely related to the performance of domestic exporters. However, with the strong August export figures announced the previous trading day and the easing of the rapid rise in the won-dollar exchange rate, the price trend of large-cap stocks is expected to remain firm.

Additionally, recent calls from the European Central Bank (ECB) for early tapering could be a burden on Asian markets, including Korea, on this day. However, since market participants are currently focusing more on the Fed's policy changes than the ECB's, the ECB's influence is expected to be limited. From an industry and stock perspective, attention should be paid to the news of a large block deal demand forecast for KakaoBank. With a volume approaching 1 trillion won, it is necessary to be cautious about increased price volatility in KakaoBank and related theme stocks.

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