[Good Morning Stock Market] "US Stocks Rise on Inflation Stability... KOSPI Expected to Start Up 0.5%"

US June PCE Price Index Rise Slows
"Attention Needed on China's Manufacturing and Services PMI Results"

Image source=Reuters·Yonhap News

The domestic stock market on the 31st is expected to start with an increase of around 0.5%. It is analyzed that the positive impact comes from the U.S. stock market closing higher amid price stability.

On the 28th (local time), the U.S. stock market rose on news that the Federal Reserve's (Fed) preferred inflation indicator had slowed. The Dow Jones Industrial Average closed at 35,459.29, up 176.57 points (0.50%) from the previous session, the Standard & Poor's (S&P) 500 index closed at 4,582.23, up 44.82 points (0.99%), and the tech-heavy Nasdaq index recorded 14,316.66, up 266.55 points (1.90%) from the previous session.

The U.S. stock market showed an upward trend as the June inflation indicator slowed. The core Personal Consumption Expenditures (PCE) price index for June, excluding energy and food, rose 4.1% compared to the same period last year. This figure is a slowdown compared to the market expectation of a 4.2% increase and the previous month's 4.6% increase. Month-over-month, it rose 0.2%, matching the market expectation of a 0.2% increase and was also lower than the previous month's 0.3% increase.

The June PCE price index, including energy and food prices, rose 0.2% month-over-month and 3.0% compared to the same period last year. This also represents a slowdown compared to the previous month's 0.1% and 3.8% increases.

U.S. personal consumption expenditures in June increased by 0.5% from the previous month, meeting market expectations and exceeding the previous month's 0.2% increase. With the second quarter GDP growth rate recording 2.4% and consumption maintaining an upward trend, optimism about the economy has further strengthened.

The rise in the U.S. stock market is expected to influence the domestic stock market's increase on the same day. Additionally, the Philadelphia Semiconductor Index rose 2.22% supported by Intel's earnings announcement, and the strength in the electric vehicle sector due to Ford's poor performance is expected to positively impact the secondary battery sector. However, considering that these factors were already priced in on the 28th, the impact is expected to be limited.

Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "It is important to note that the U.S. stock market's focus on large tech stocks has re-emerged due to interest rate declines and dollar weakness following the slowdown in the PCE price index," adding, "Last week, especially in the KOSDAQ market, volatility in the secondary battery sector was a notable feature." He continued, "The recent rise in global stock markets is a result of China's economic stimulus policies, U.S. economic confidence, and price stability, so attention should also be paid to the China manufacturing and services Purchasing Managers' Index (PMI) results released during the day," and explained, "Depending on the results, there is a high possibility of changes in the Chinese stock market, which is also expected to affect the domestic stock market."