[Good Morning Stock Market] "US Stocks Fall on September CPI Above Expectations... KOSPI Expected to Start Lower"

US September CPI Slightly Exceeds Expectations
"Profit-Taking Desire Amid Rising Treasury Yields and Strong Dollar"

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On the 13th, the domestic stock market is expected to start lower. This is due to the analysis that profit-taking desires will increase following the decline in the US stock market, the rise in US Treasury yields, and the strength of the dollar.

On the 12th (local time), the Dow Jones Industrial Average closed down 173.73 points (0.51%) at 33,631.14, the large-cap S&P 500 index fell 27.34 points (0.62%) to 4,349.61, and the tech-heavy Nasdaq index dropped 85.46 points (0.63%) to 13,574.22.

Investors focused on the September Consumer Price Index (CPI). According to the US Department of Labor, the September CPI rose 3.7% year-over-year and 0.4% month-over-month. This slightly exceeded market expectations due to increases in housing costs and gasoline prices. However, the core CPI, which excludes the volatile energy and food sectors, showed a slowdown. The core CPI increased 4.1% year-over-year and 0.3% month-over-month, in line with market expectations.

Following the US September CPI release, US Treasury yields showed an upward trend. The benchmark 10-year yield rose to around 4.7%, the 30-year yield to about 4.86%, and the 2-year yield surpassed the 5% level again. This is interpreted as reflecting concerns over inflation exceeding targets and expectations that high interest rates will continue even after rate hikes end. However, the market still predominantly expects a rate hold in November.

The US dollar also strengthened. The Dollar Index, which measures the dollar's value against six major currencies, rose more than 0.7% from the previous session to around 106.5.

On the 13th, the KOSPI is expected to start down about 0.7% to 1.0% due to profit-taking trades. Seokhwan Kim, a researcher at Mirae Asset Securities, explained, "This week, foreigners showed a net selling position of 250 billion KRW in the cash market but recorded net buying of over 20,000 contracts in the futures market. Accordingly, institutions showed a net buying inflow of more than 1.5 trillion KRW from arbitrage trading in the cash market." He added, "The domestic stock market is expected to see increased profit-taking pressure due to the US market decline, rising Treasury yields, and dollar strength."

He continued, "However, attention should be paid to the upcoming release of China's September consumer and producer price indices and trade balance trends during the trading session. If positive data emerges, it is expected to limit downward pressure on the stock market."