[Good Morning Stock Market] Expectations for Soft Landing of US Economy... KOSPI Expected to Start Higher

On the 7th, as expectations for a soft landing of the U.S. economy grow, the KOSPI is also expected to start higher.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,573.28, up 10.42 points (0.03%) from the previous session. The Standard & Poor's (S&P) 500 index rose 10.06 points (0.24%) to 4,283.85, and the Nasdaq index increased by 46.99 points (0.36%) to 13,276.42.

[Image source=Yonhap News]

The New York stock market opened lower due to profit-taking but the decline narrowed as confidence in the economy brought in rebound buying. The World Bank raised its global economic growth forecast for this year to 2.1%, up from the previous 1.7%, and also revised the U.S. growth rate upward from 0.5% to 1.1%. This indicates that the slowdown in growth is not as severe as initially expected.

The Morgan Stanley Capital International (MSCI) Korea Index ETF rose 0.88%, and the MSCI Emerging Markets Index ETF increased by 0.86%. Accordingly, the KOSPI is also expected to rise slightly today.

Sangyoung Seo, a researcher at Mirae Asset Securities, analyzed, “As the U.S. stock market is currently undergoing a process of digesting profit-taking due to increased desire for profit realization, a similar trend is expected in the domestic market. In particular, the concentration on artificial intelligence (AI) related companies, including Nvidia, is easing, leading to sector and stock differentiation. Therefore, there is a high possibility of profit-taking selling mainly in the semiconductor sector, which has driven the domestic market so far.”

He added, “However, despite the strong dollar, the won-dollar exchange rate is falling, showing a clear won strength trend, which could positively affect foreign demand. The domestic market is expected to start slightly higher and, ahead of the options expiration date, will focus on foreign futures trends and Chinese economic indicators while undergoing a process of digesting selling pressure.”

Ji-young Han, a researcher at Kiwoom Securities, forecasted, “After digesting external upside and downside factors that occurred during the domestic market holiday period, such as the slowdown in the U.S. ISM services index, additional rate hikes by the Reserve Bank of Australia (RBA), and the World Bank’s upward revision of growth forecasts, the market will start with a slight firm tone and be influenced by China’s export and import data during the session.”

He added, “From a sector perspective, similar to the U.S. stock market, economically sensitive stocks that had been neglected are expected to show favorable price movements following last Monday, due to improved global growth prospects. Also, although Apple recorded a slightly weak trend over two trading days, market attention is expected to focus on whether the MR device ‘Vision Pro’ unveiled at the recent developer conference can improve investment sentiment for Apple-related stocks in Korea, such as display and AR sectors.”