"Focus on Core CPI Over US September CPI...Stock Prices Entering Bottom Testing Phase"

[Asia Economy Reporter Hwang Yoon-joo] Leading Investment & Securities has forecasted that inflation in the United States will continue. Although the Consumer Price Index (CPI) for September, to be released on the 13th, is expected to slightly decelerate, the Core Consumer Price Index (Core CPI) is anticipated to remain at a high level.

Researcher Kwak Byung-yeol of Leading Investment & Securities stated on the 12th, "The forecast for the US September CPI (year-over-year) is 8.1%, slightly down from the previous month’s 8.3%."

He added, "The Core CPI, which was a concern in the previous release, is expected to be 6.5%, higher than the previous month’s 6.3%, indicating ongoing unease." This suggests that disturbances in lagging indicators such as US housing costs and service sector prices are slowing the peak of inflation.

Researcher Kwak explained, "However, the supply chain pressure index (released by the New York Federal Reserve), which precedes the peak in consumer prices, has recently dropped sharply, clearly resolving supply chain bottlenecks." He noted, "After the Great East Japan Earthquake, inflation concerns eased following the peak of this index." He expects the current situation to reflect improvements in supply factors through detailed indicators.

Meanwhile, the third-quarter earnings season will begin later this week, starting with US financial stocks. Researcher Kwak said, "The forecast for third-quarter net income (year-over-year) remains a slight increase (+2.57%). However, IT (-6.7%) is experiencing a relatively large decline, and especially semiconductors (-13.2%) are expected to see a significant profit slowdown."

Researcher Kwak evaluated, "Both earnings per share and sales per share (12-month forecast) for S&P 500 companies are being slightly revised downward. However, net profit margins (net income/sales) are being maintained relatively steadily by managing cost burdens through passing them on to sales prices." He expects the earnings cycle to maintain a mild downcycle, i.e., a soft landing rather than a hard landing, through stable net profit margins.

Based on quarterly earnings (net income), the overall market and the IT sector are also expected to show improving profit trends. Researcher Kwak predicted, "Confidence in undervaluation (low PER) from the earnings perspective is gradually improving, and stock prices will gradually shift from a downward trend to a low-point testing phase."

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