[Good Morning Stock Market] US Stocks Show 'Economic Confidence'... KOSPI Expected to Start Up 0.3%

Overnight, the U.S. stock market closed higher, showing confidence in the economy. The KOSPI is also expected to start with an increase of around 0.3% on the 18th.

On the previous day (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,585.35, up 76.32 points (0.22%) from the previous session. This is the highest level since November last year. The Standard & Poor's (S&P) 500 index rose 17.37 points (0.39%) to 4,522.79, and the Nasdaq index gained 131.25 points (0.93%) to close at 14,244.95. Both the S&P 500 and Nasdaq indices also reached their highest levels since April last year.

This week, earnings reports from major U.S. banks such as Morgan Stanley, Bank of America, and Goldman Sachs, as well as key companies like Tesla and Netflix, are scheduled to be released. Although the market generally expects these companies to report weak earnings, there is considerable optimism as companies that have already reported have mostly exceeded expectations.

Additionally, ahead of the July Federal Open Market Committee (FOMC) regular meeting next week, a 'blackout' period begins this week, during which related officials are prohibited from making public statements. The market expects the Federal Reserve to raise interest rates at this meeting and then hold them steady for the remainder of the year.

Janet Yellen, U.S. Secretary of the Treasury
[Photo by Yonhap News]

Confidence in the future economic outlook is also evident. Contrary to concerns, expectations for a soft landing of the economy are growing, drawing attention to the retail sales and industrial production data to be released this week. In an interview on the same day, U.S. Treasury Secretary Janet Yellen stated, "The U.S. is on a good path to lowering inflation" and "I do not expect a recession," which is interpreted as having a positive impact on the market. Goldman Sachs lowered the probability of a U.S. recession within the next 12 months from 25% to 20% on the same day.

The KOSPI is expected to start slightly higher today. Seosangyoung, Head of Media Content at Mirae Asset Securities, said, "Although the U.S. stock market showed a tendency for profit-taking, confidence in the economy flowed in, leading to gains that are expected to have a positive impact on the Korean stock market. In particular, the Philadelphia Semiconductor Index showed a strong gain of 2.32%, which is larger than other sectors, and this is expected to drive increases centered on related stocks." However, he added, "The U.S. stock market continues to experience a FOMO (Fear Of Missing Out) phenomenon amid favorable individual investor sentiment, concentrating demand on certain stock groups. This could lead to extreme differentiation among individual stocks, making increased index volatility inevitable."

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