Next Week Stock Market Strategy... Focus on US Reopening Over 'Ukraine Situation'

[Asia Economy Reporter Hwang Yoon-joo] Daishin Securities forecasted that next week's stock market will maintain distance from two factors: 'high inflation' and the 'Ukraine situation.'

Moon Nam-jung, a researcher at Daishin Securities, stated on the 20th, "With the Beijing Winter Paralympics and the presence of Chinese residents in Ukraine, there is a limit to how much the stock market can be troubled."

He also expected that the impact of the upcoming U.S. January Personal Consumption Expenditures (PCE) report scheduled for the 25th on the stock market will be limited. Researcher Moon said, "The forecast is not expected to deviate significantly from the previous month's level (5.8% YoY, core 4.9% YoY)," adding, "While the PCE results could be highlighted as a risk factor, the Consumer Price Index (CPI) has already raised the possibility of a big step (0.5%p) at the March FOMC, so the impact will not be significant."

Researcher Moon rather predicted that the U.S. reopening will be a momentum for the stock market's rebound. He explained, "The U.S. Centers for Disease Control and Prevention (CDC) plans to ease indoor mask-wearing guidelines for state governments as early as the fourth week of February," and added, "Since Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), stated that it is time to start returning to normal life, the previously subdued sentiment will turn into relief."

The U.S. full vaccination rates (first dose 76%, second dose 64.2%, booster shots 27.6 per 100 people) significantly exceed the global vaccination rates (first dose 61.9%, second dose 54.2%) and rank fifth as of February 14.

Researcher Moon said, "The strengthening of the 'With Corona' policy in the U.S., where vaccination rates are high, will serve as a trigger for other countries to adopt similar policies," and predicted, "The warmth of the U.S. reopening will be a variable that pushes the U.S. stock market to reach previous highs before the March FOMC."