[Good Morning Market] Expected to Start Higher... "US Market Uptrend Reacts Fully to Positive News"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The semiconductor sector, energy sector driven by the surge in international oil prices, and the electric vehicle industry led the rise in related stock groups, driving the upward trend in the U.S. stock market. On the 7th (local time), the Dow Jones Industrial Average closed at 31,384.55, up 346.87 points (1.12%) from the previous session. The S&P 500, focused on large-cap stocks, ended at 3,902.62, up 57.54 points (1.50%). The tech-heavy Nasdaq closed at 11,621.35, rising 259.49 points (2.28%). The U.S. stock market maintained its strength despite sensitive reactions in the late session, buoyed by St. Louis Federal Reserve President James Bullard’s expression of confidence in the economy.

The U.S. stock market showed strength for the second consecutive trading day, which is positive for the domestic market on the 8th. With advanced markets such as the U.S. and Europe showing simultaneous gains and the USD-KRW exchange rate declining, the domestic market is expected to start higher.

◆ Seo Sang-young, Head of Media Content at Mirae Asset Securities = Although Samsung Electronics’ preliminary Q2 earnings slightly missed market expectations, there was no shock from a significant miss, which positively influenced related sectors. Additionally, the sharp rise in electric vehicle and EV charging sectors also led the U.S. stock market’s gains. Notably, the Chinese government announced measures to stimulate automobile demand, including extending tax reductions on electric vehicles, considering the construction of charging stations, and lowering charging fees. Furthermore, Tesla is expanding its charging infrastructure to open it to other manufacturers’ vehicles by the end of this year, and high gasoline prices also contributed to the upward momentum.

Moreover, the sharp rise in international oil prices bolstered the energy and raw materials sectors, which had been declining recently. On the New York Mercantile Exchange (NYMEX), August delivery West Texas Intermediate (WTI) crude oil closed at $102.73 per barrel, up 4.3% ($4.20) from the previous day.

Positive factors were reflected in U.S. stock prices, likely because the previously negative factors such as the Federal Reserve’s aggressive interest rate hikes and recession concerns had been largely priced in. Attention was also drawn to St. Louis Fed President Bullard’s forecast that the U.S. economy will maintain expansion this year, as real Gross Domestic Income (GDI) is recording positive growth.

The domestic market is expected to show a firm performance despite the possibility of profit-taking after starting about 0.7% higher. The fact that the market is actively responding to positive factors despite various negative issues such as recession concerns is likely to stimulate risk asset preference. The won’s strength, continuing from the previous day, is also expected to positively influence foreign investor flows into the stock market.

◆ Han Ji-young, Researcher at Kiwoom Securities = Despite caution ahead of the June employment data scheduled for release before the market opens, the U.S. stock market closed higher, supported by expectations of improved semiconductor sector earnings and comments from St. Louis Fed President Bullard that strengthened risk appetite.

On the previous trading day, the domestic market closed higher due to easing anxiety during the Q2 earnings season and net buying by foreigners and institutions amid a stabilization of the sharp rise in the USD-KRW exchange rate. Today, the market is expected to show favorable price movements influenced by simultaneous gains in advanced markets and a decline in the exchange rate.

Samsung Electronics and LG Electronics reported earnings below market consensus. However, as seen in the strong stock prices of related sectors, the perception that earnings had been priced in and the possibility that core business units performed well suggest that foreign investor demand for the overall market, especially the IT sector including semiconductors, is likely to improve.

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