New York's 3 Major Stock Markets Hit Record Highs for Third Day
Strong Corporate Earnings Drive Gains Ahead of Tapering
KR-US Stock Market Decoupling Continues
Won-Dollar Exchange Rate Surpasses 1180 Ahead of FOMC
The U.S. New York stock market hit another record high again ahead of the Federal Reserve's (Fed) decision on tapering (asset purchase reduction). Despite the major event of monetary policy normalization, strong corporate earnings are driving the market. On the other hand, the Korean stock market showed a shaky performance as the KOSPI fell below 3000 again. The won-dollar exchange rate also surpassed 1180 during the session.
On the 2nd (local time), the Dow Jones Industrial Average closed at 36,052.63, up 138.79 points (0.39%) from the previous session; the S&P 500 rose 16.98 points (0.37%) to 4,630.65; and the Nasdaq increased by 53.69 points (0.34%) to 15,649.60. The Dow surpassed 36,000 for the first time ever, and all three major indices recorded their highest closing prices for the third consecutive trading day.
Although the Fed is expected to hold its Federal Open Market Committee (FOMC) regular meeting from today through the 3rd and announce tapering, market concerns are not evident. Strong corporate earnings are serving as the driving force behind the stock market's rise. According to FactSet, as of the previous day, 83% of the S&P 500 companies that have reported earnings exceeded expectations.
Jim Paulson, Chief Investment Strategist at Leifold Group, analyzed, "Fundamentals are the epicenter of why the stock market continues to rise." Investing.com reported that despite the start of the FOMC meeting, Wall Street is betting on strong earnings. However, Melissa Brown, Chief Operating Officer at Quantigo, said, "The Fed's decision could pose downside pressure on the stock market."
On the 3rd, the domestic stock market showed a sluggish performance, continuing its decoupling from the U.S. stock market. According to the Korea Exchange, the KOSPI started higher but immediately turned downward, falling below the 3000 mark. As of 10 a.m., the KOSPI was at 2,999.10, down 0.48% from the previous trading day.
Seosangyoung, a researcher at Mirae Asset Securities, interpreted, "Although the U.S. stock market was solid, the decline in government bond yields and international oil prices, along with the strengthening of the dollar and yen, have increased the preference for safe assets, which is a burden on foreign demand. There is also a possibility of selling pressure ahead of the FOMC regular meeting, so a wait-and-see stance is strong."
In the Seoul foreign exchange market on the same day, the won-dollar exchange rate was around 1180 won. As of 10:08 a.m., the won-dollar exchange rate was 1180.4 won, 6.0 won higher than the previous day's closing price. Oh Changseon, a researcher at Hyundai Motor Securities, explained, "The market is paying close attention to the results of the FOMC meeting scheduled for the 4th."
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