[Good Morning Stock Market] Kospi Expected to Start Up Around 1%... Focus on US Economic Indicators

US Inflation Indicators and Individual Corporate Earnings Announcements in Focus
Attention on Market Impact in the Latter Part of Earnings Season

The domestic stock market is expected to start with an increase of around 1% on the 8th. It is likely to be influenced by Apple's strong earnings and the easing of risks related to small and medium-sized banks in the United States. However, external factors such as political uncertainty surrounding the U.S. debt ceiling negotiations remain.

Sangyoung Seo, a researcher at Mirae Asset Securities, forecasted on the day, “The Korean stock market will start with an increase of around 1%, then focus on U.S. inflation indicators and individual corporate earnings announcements while digesting sell-offs.”

Last week, the Dow Jones Industrial Average fell by 1.24%. The S&P 500 index dropped by 0.8%. The Nasdaq index rose by 0.07% due to strong earnings from big tech companies like Apple. Meanwhile, the crisis involving U.S. regional banks such as Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank is ongoing. Financial market experts, including the U.S. Federal Reserve (Fed), expect this situation to lead to credit tightening in the banking sector.

Inflation indicators to be released this week are also attracting attention. Fed Chair Jerome Powell reaffirmed the '2% annual inflation target' at this month's Federal Open Market Committee (FOMC) meeting. The market expects the April core Consumer Price Index (CPI), excluding energy and food, to have risen by 0.4% month-over-month and 5.5% year-over-year. It is anticipated to be similar to March or show a slight slowdown in the rate of increase.

[Image source=Yonhap News]

Economic sentiment indicators are also in focus. This week, the National Federation of Independent Business (NFIB) will release the business optimism index compiled from small businesses. Due to recent banking sector crises, concerns about credit tightening among small and medium-sized enterprises have increased, making the results noteworthy. Additionally, the April Consumer Price Index (CPI) will be announced. The U.S. federal government's debt ceiling is also expected to capture investors' full attention starting this week.

The domestic stock market is expected to be influenced by the strong U.S. stock market during the holiday period, U.S. consumer prices, inflation indicators such as the University of Michigan inflation data, options expiration dates, the MSCI semi-annual review, and earnings of domestic companies such as Western Digital, Disney, Celltrion, and Lotte Chemical. The weekly KOSPI expected range is 2460 to 2590 points.

Experts predict that since the earnings season has entered its latter half, the impact on the stock market will not be significant. Ji-young Han, a researcher at Kiwoom Securities, analyzed, “This week, earnings events from companies like Western Digital and Celltrion are pending, but as earnings announcements from big tech companies like Apple and major companies such as Samsung Electronics and Hyundai Motor have concluded, the earnings season has entered its latter half. Therefore, the impact of upcoming corporate earnings on the overall stock market during the week is expected to be limited.”

She added, “However, due to increased volatility in supply and demand for individual stocks centered around the second week after options expiration and the MSCI semi-annual review, it is necessary to prepare for the possibility of differentiated stock price movements between KOSPI vs. KOSDAQ or large-cap vs. small- and mid-cap stocks.”

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