[Good Morning Stock Market] US Strong Indicators vs Hawkish Remarks... KOSPI Expected to Start Flat

On the 30th, the KOSPI is expected to start in a flat range. This is due to the mixed performance of the U.S. stock market influenced by favorable economic indicators and hawkish remarks from Jerome Powell, Chairman of the U.S. Federal Reserve (Fed).

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On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,122.42, up 269.76 points (0.80%) from the previous session. The Standard & Poor's (S&P) 500 index rose 19.58 points (0.45%) to 4,396.44, while the Nasdaq index closed slightly down by 0.42 points (0.00%) at 13,591.33.

The market focused on the first-quarter Gross Domestic Product (GDP) growth rate and Powell’s remarks on continued tightening. The U.S. Department of Commerce announced before the market opened that the first-quarter GDP growth rate was finalized at 2.0%. This exceeded the previously announced preliminary figure of 1.3% and the market expectation of 1.4%. The improvement in growth was due to upward revisions in consumer spending and exports.

Amid solid economic resilience, the Fed is expected to continue raising interest rates this year. At a conference hosted by the Bank of Spain, Chairman Powell stated that the Fed has not yet balanced the risks between raising rates too much and raising them too little.

On the previous day, the Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell by 0.87%, and the MSCI Emerging Markets Index ETF declined by 0.6%. Eurex KOSPI 200 futures rose by 0.1%. Reflecting this, the KOSPI is expected to start in a flat range today.

Seosangyoung, a researcher at Mirae Asset Securities, analyzed, “The sharp rise in U.S. Treasury yields due to improved key economic indicators and hawkish remarks by Chairman Powell has burdened the domestic stock market, as technology stocks showed weakness in the U.S. market. In particular, Micron’s significant decline after initially rising on strong earnings?due to profit-taking reflecting China’s regulations?could act as a factor dampening investor sentiment for related stocks.”

He also noted, “Today, China’s manufacturing and non-manufacturing PMI will be announced, and the results of these indicators could raise expectations for the Chinese government’s active stimulus measures. Considering that it is also the end of the half-year, the supply and demand direction of foreign and institutional investors is important.” He added, “Considering these factors, the domestic stock market is expected to start in a flat range, but changes could widen depending on foreign investors’ supply and demand direction after the announcement of China’s economic indicators.”

Meanwhile, the one-month Non-Deliverable Forward (NDF) won-dollar exchange rate on the previous day was 1,319.71 won. Reflecting this, the won-dollar exchange rate is expected to start about 1 won higher today.

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