[Good Morning Stock Market] "US Stocks Mixed Amid Economic Slowdown Concerns... KOSPI Expected to Weaken"

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The US New York stock market closed mixed due to weak employment data and increasing concerns over economic recovery slowdown caused by the spread of the Delta variant. Only the Nasdaq reached a new all-time high.

On the 7th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,100.00, down 269.09 points (0.76%) from the previous trading day. The Standard & Poor's (S&P) 500 index also closed at 4,520.03, down 15.40 points (0.34%). The tech-heavy Nasdaq rose 10.81 points (0.07%) to 15,374.33, closing at an all-time high.

Investors focused on COVID-19 related news. The August employment report released last week fell significantly short of market expectations, raising concerns that the spread of the Delta variant is having a greater economic impact than anticipated. Goldman Sachs lowered its US fourth-quarter gross domestic product (GDP) growth forecast from 6.5% to 5.5%. Morgan Stanley also downgraded its investment opinion on US stocks to underweight.

Domestic market experts forecast that the KOSPI will also show weakness due to concerns over economic slowdown caused by the spread of COVID-19. However, since this is not a trend of continuous decline, volatility is expected to be limited.

◆ Sang-young Seo, Researcher at Mirae Asset Securities = The US stock market’s weak performance amid growing concerns over economic slowdown increases the likelihood of weakness in the Korean stock market today. Especially, the fact that most stocks fell except for some sectors despite already known factors indicates a lack of clear momentum and is a factor dampening investor sentiment.

Of course, with the futures and options expiration day just one day away, the December KOSPI 200 futures are trading lower than the September contract, raising concerns about recent net sell-offs by financial investors. Considering this, the Korean stock market is expected to start lower and then experience increased volatility depending on the trading trends of institutional investors, mainly financial investors.

◆ Ji-young Han, Researcher at Kiwoom Securities = The domestic stock market is expected to decline due to concerns over US-origin economic slowdown and caution ahead of the simultaneous expiration on the 9th. Considering the cryptocurrency market, including Bitcoin, which is currently plunging over 8% on Upbit, attention should be paid to the possibility of increased price volatility in related thematic stocks in the domestic market.

However, the downward pressure on stock prices caused by concerns over economic slowdown in developed countries is expected to be limited. Although the spread of the Delta variant is a health issue even in the US, it should be remembered that this negative factor has been known several times from the stock market perspective.

It is judged that other countries such as the US and Korea, following the UK and Israel, are likely to enter a "With Corona" phase before the emergence of a post-COVID era. Considering these factors, the spread of the Delta variant may temporarily delay the economic recovery of major countries but is unlikely to cause a long-term slowdown.

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