[Good Morning Stock Market] Cautious Sentiment Ahead of US August CPI... "KOSPI Expected to Start Lower"

Apple Stock Weak Despite New iPhone Launch
Focus on CPI Released on the 13th (Local Time)

Image source=Reuters·Yonhap News

On the 13th, the domestic stock market is expected to start lower. It is analyzed that cautious sentiment will increase for the time being ahead of the release of the US August Consumer Price Index (CPI).

On the 12th (local time), the US stock market closed lower as technology stocks showed a weak trend. The Dow Jones Industrial Average fell 17.73 points (0.05%) to 34,645.99, the large-cap S&P 500 index dropped 25.56 points (0.57%) to 4,461.90, and the tech-heavy Nasdaq index closed down 144.28 points (1.04%) at 13,773.61.

Apple's stock continued its decline even after the unveiling of the new iPhone 15 series. The stock plunged due to news of a ban on iPhones by Chinese authorities, and the impact is ongoing. Additionally, the lack of significant changes in the new product and the decision to freeze prices reduced expectations for profitability, which also affected the stock price.

The US August CPI, to be released on the 13th local time, is expected to slightly exceed the previous month's increase at around 3.6%, driven by recent oil price surges. The core CPI, excluding the volatile energy and food sectors, is forecasted to slow to the low 4% range. The day after the August CPI release, the US August Producer Price Index (PPI), a wholesale price indicator, will be announced.

Since recent economic indicators have generally been solid, if inflation indicators such as the CPI exceed market expectations, the possibility of further interest rate hikes will gain momentum. The remaining Federal Open Market Committee (FOMC) meetings this year are scheduled for September, November, and December. The market has priced in over a 90% chance of a rate hold at the September FOMC and about a 50% chance of a hold in November.

The KOSPI is expected to start down by about 0.2% to 0.5%. Seokhwan Kim, a researcher at Mirae Asset Securities, said, "Despite a favorable exchange rate environment the previous day, foreign selling increased downward pressure on the stock market," adding, "With the US August CPI, real economy indicators later this week, and next week's FOMC meeting ahead, cautious sentiment is expected to grow for the time being."

Ji-young Han, a researcher at Kiwoom Securities, also said, "The domestic stock market closed lower despite Tesla-driven gains in the US market due to AI issues, as foreign investors switched to net selling during the session amid CPI caution and outflows from secondary battery stocks," and forecasted, "Today, cautious sentiment around the August CPI, concerns over rising international oil prices, and uncertainty in the supply and demand of secondary battery stocks are expected to create volatility during the session."

She added, "The strong international oil prices, due to the US Energy Information Administration's outlook on supply slowdown from oil-producing countries' production cuts, are expected to improve short-term investment sentiment for domestic refining stocks," but noted, "On the other hand, despite the new iPhone 15 launch, concerns over Chinese officials' restrictions on iPhone use have kept Apple’s stock weak, which is expected to impose short-term constraints on the supply and demand environment of domestic Apple-related stocks that have been bottoming out after recent declines."