[Good Morning Stock Market] US Stocks Fall Amid Inflation Concerns... "Korean Stock Market Expected to Decline"

Domestic September Export Results Draw Attention as Market Opens

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Despite narrowly averting a U.S. federal government shutdown, the U.S. stock market closed broadly lower. Although the recently concerning Treasury yields remained steady around the 1.5% range, growing inflation worries negatively affected investor sentiment.

On the 30th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average fell 546.80 points (1.59%) to close at 33,843.92. The S&P 500 index dropped 1.19% to finish at 4,307.54. The Nasdaq Composite declined 0.4% to 14,448.58. Notably, the poor performance of retailers amid growing concerns over global supply chain disruptions stood out. Household goods retailer Bed Bath & Beyond’s stock plummeted 22.18% to close at $17.28 that day.

◆ Seosangyoung, Researcher at Mirae Asset Securities = In the U.S. stock market, retail companies’ poor earnings due to supply chain issues triggered sell-offs. Overall, concerns about economic slowdown appear to have weighed on the market. Additionally, anxiety related to debt ceiling negotiations negatively impacted sentiment, which is unfavorable for the Korean stock market.

On this day, the Korean stock market is expected to open down about 0.5% due to economic slowdown concerns and U.S. political uncertainties. Subsequent fluctuations are anticipated depending on the dollar-won exchange rate movements and Korea’s import-export statistics results, following the previous day’s trends. The market is expected to await the upcoming earnings season, starting with Samsung Electronics next week.

◆ Han Jiyoung, Researcher at Kiwoom Securities = Currently, major economies are burdened by supply chain problems caused by bottlenecks and China’s power shortages. The over 20% plunge in Bed Bath & Beyond’s stock in the previous trading session was due to concerns expressed during their conference call about increased costs and margin declines caused by supply disruptions. The unresolved supply chain issues since the beginning of the year are causing fears that this is not a temporary high inflation but a trend of sustained inflation.

Although the U.S. 10-year Treasury yield briefly dipped below 1.5%, persistent concerns about a further surge remain because the vicious cycle of "continued supply disruptions → soaring inflation → reduced real consumer purchasing power and corporate earnings slowdown → early tightening by central banks such as rate hikes" could be triggered.

Regarding the U.S. political issues that had caused market instability, the passage of a temporary budget bill allows the government to operate until December 3, resolving the shutdown issue. However, the passage of a debt ceiling increase (or suspension) bill before October 18 remains uncertain. While the possibility of a U.S. default due to failure to raise the debt ceiling is slim, given multiple negative factors such as inflation, Federal Reserve tightening, China’s power shortages, and the Evergrande Group crisis, it is necessary to prepare for the possibility that U.S. political noise could further increase market volatility.

The Korean stock market, which had rebounded in the previous session, is expected to face renewed downward pressure due to the weak U.S. market caused by global supply chain issues. Since the full earnings season has not yet begun, macroeconomic factors still dominate, and these macro headwinds are making market participants’ investment sentiment more vulnerable. However, if the September export results, released at the start of trading, show strong performance, it could raise expectations for third-quarter earnings and provide support to the market’s downside.

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