[Good Morning Market] "US Stock Market Tech Stocks Rally... KOSPI Expected to Start Up 1%"

Focus on US Employment Report and Monthly Indicators
Clear Strength in AI Themes and Electric Vehicles

On the 6th, the domestic stock market is expected to start with an increase of around 1%. It is analyzed that this will be influenced by the strength of U.S. tech stocks and the Korean won.

Jerome Powell, Chair of the U.S. Federal Reserve (Fed), is scheduled to appear before both the House and Senate on the 7th and 8th (local time) on consecutive days to discuss the diagnosis and outlook of the U.S. economy and monetary policy. With bond yields soaring and concerns about tightening growing, this week is expected to be another pivotal week for the stock market’s direction.

In particular, three monthly employment-related indicators will be released this week. The key indicator is the February employment report. Wall Street is paying close attention to how many new jobs were added in February and whether there are signs that the chronic labor shortage in the employment market is easing.

[Image source=Yonhap News]

The Dow Jones Industrial Average rose 1.75% for the week. The Standard & Poor’s (S&P) 500 increased by 1.9%, and the Nasdaq rose by 2.58%. In the case of the Dow, last week’s gains ended a four-week streak of weekly declines.

Recently, the U.S. stock market has been receiving signals from the Fed’s monetary policy report suggesting a 0.25% rate hike at the March FOMC, reversing recent rapid interest rate increases. As Treasury yields fell sharply, tech stocks showed strength, which is expected to have a favorable impact on the domestic stock market.

Sangyoung Seo, a researcher at Mirae Asset Securities, said, “Especially with the clear strength in AI themes and electric vehicles, the Philadelphia Semiconductor Index rose 1.48%, and the Russell 2000 Index increased by 1.35%, which is also favorable.” He added, “Considering the positive foreign demand due to the won’s appreciation, the Korean stock market is expected to start with an increase of around 1% and continue its strength following Premier Li Keqiang’s remarks on the strong resilience of the Chinese economy at the opening ceremony of the National People’s Congress.”

It is also necessary to monitor Fed officials’ remarks including Chair Powell, the Beige Book, U.S. February employment data, China’s export-import and inflation indicators, news flow related to the Two Sessions, monetary policy meetings of major Asian central banks such as the RBA and BOJ, and the domestic futures and options simultaneous expiration day. The weekly KOSPI is expected to range between 2400 and 2500.

Jiyoung Han, a researcher at Kiwoom Securities, analyzed, “Looking at the stock market movements over the past one to two weeks, the market is showing a pattern where the direction of stock prices frequently changes depending on economic indicators and the stance of Fed officials.” She added, “Despite this challenging environment, the 200-day moving average, which is the mid-term trend line for major indices such as the KOSPI and Nasdaq, is acting as a support level, which seems to instill confidence and relief regarding downside rigidity.”

Han also noted, “However, since the market remains dependent on macro conditions, it is important to recognize that this is a difficult period for directional betting.” She added, “It is appropriate to keep open the possibility that market sentiment may change frequently whenever indicators or Fed events occur for the time being.”

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