[Good Morning Stock Market] "US Stock Market Rebounds Despite Inflation Concerns... Domestic Market Also Expected to Rise"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Despite inflation concerns, the U.S. New York stock market succeeded in rebounding after four trading days. The domestic stock market is also expected to continue its upward trend following the previous day, supported by the recent strength of the won against the dollar.

On the 13th (U.S. time), according to the New York Stock Exchange, the S&P 500 index, centered on large-cap stocks, closed at 4,363.80, up 13.15 points (0.30%). This marks a rebound after four trading days. The tech-heavy Nasdaq index closed at 14,571.64, up 105.71 points (0.73%) from the previous session. The Dow Jones Industrial Average closed at 34,377.81, down 0.53 points (0.00%) from the previous session.

◆ Han Ji-young, Kiwoom Securities Researcher = Although the U.S. consumer price index for September exceeded expectations, the core consumer price index excluding the highly volatile energy and food sectors met expectations, which is a reassuring factor in the inflation data. Furthermore, there is growing optimism about price stabilization in items affected by the logistics crisis, such as gasoline, new cars, and transportation. The Biden administration has decided to operate the heavily congested LA port 24 hours a day, and retailers and delivery companies like Walmart and UPS have also decided to operate 24/7, indicating a full-scale effort to resolve supply chain issues. This could ease the market participants’ expectations of future high inflation. In other words, the calming of the rapid rise in expected inflation ultimately can alleviate the Federal Reserve’s early rate hike concerns that have been causing current market anxiety.

Moreover, most of the regions experiencing bottlenecks in the U.S. have long suffered from chronic structural congestion due to aging infrastructure, so this logistics crisis highlights the urgency and importance of infrastructure improvements. This strengthens the justification for the $1 trillion infrastructure investment and expands expectations for the resolution of the debt ceiling negotiations postponed until December, which could significantly reduce related political noise.

The Korean stock market, which successfully rebounded in the previous trading session, is expected to continue its upward trend today, supported by the possibility of easing the U.S.-origin logistics crisis, expectations for the resumption of factory operations in emerging countries, and forecasts of a decline in the offshore NDF won/dollar exchange rate. In particular, a favorable environment is expected to be created for companies related to automobiles, semiconductors, and distribution, which were affected by supply shortages.

◆ Seo Sang-young, Kiwoom Securities Researcher = The domestic stock market is expected to show a strong performance after a rising start, supported by the won’s strength. The Korean stock market rose the previous day as a rebound buying momentum flowed in. Despite concerns about power shortages and supply chain bottlenecks in China’s imports, the figures exceeded expectations, alleviating worries about China’s economic slowdown. Especially, the won’s strength, evidenced by the won/dollar exchange rate falling from near 1,200 won in early trading, helped improve overall investor sentiment.

Meanwhile, the U.S. stock market showed resilience after the White House announced efforts to address high inflation, which is positive for the Korean stock market. Some tech stocks rose on expectations of solid earnings and upward guidance revisions, further boosting investor sentiment. Of course, although the financial and airline sectors, which reported solid earnings, underperformed amid the start of the earnings season, this is attributed to anxiety about future prospects and is considered a sector-specific factor, so its impact on the Korean stock market is expected to be limited.

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