[Good Morning Stock Market] Watching Treasury Yields as US Market Mixed... "KOSPI Expected to Start Higher on Rebound Buying"

10-Year US Treasury Yield Falls After Surpassing 5%
"Expecting Rebound Buying Amid Decline in US Treasury Yields"

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The domestic stock market is expected to start higher on the 24th. This is analyzed to be due to a rebound buying spree following the decline in U.S. Treasury yields.

On the 23rd (local time), the Dow Jones Industrial Average closed at 32,936.41, down 190.87 points (0.58%) from the previous session, while the S&P 500, focused on large-cap stocks, fell 7.12 points (0.17%) to 4,217.04. The tech-heavy Nasdaq index closed up 34.52 points (0.27%) at 13,018.33.

In the New York bond market, the benchmark 10-year U.S. Treasury yield surpassed 5% before the stock market opened but then showed a downward trend. Despite a lower start, the U.S. stock market turned positive due to the decline in Treasury yields.

Additionally, the price of Bitcoin, the leading cryptocurrency, surged more than 10% in one day to the $33,000 range, driven by the possibility of a Bitcoin spot Exchange-Traded Fund (ETF) launch, which was also seen as a positive factor.

This week, attention is focused on earnings reports from major big tech companies such as Alphabet, Meta Platforms, Amazon, and Microsoft (MS). About 40% of the companies listed on the S&P 500 are scheduled to release earnings this week, including General Motors (GM), Coca-Cola, Boeing, IBM, and Merck.

The dollar index, which reflects the value of the dollar against six major currencies, recorded 105.623, down 0.51% from the previous close of 106.169.

Furthermore, the Chicago Federal Reserve Bank's National Activity Index for September turned positive at 0.02. A positive National Activity Index indicates that the economy is growing above its long-term average growth rate, while a negative value means growth is below the long-term average.

The KOSPI is expected to start up about 0.2 to 0.4% on the 24th. Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The issue of deteriorating supply and demand among domestic investors is likely to continue for some time," adding, "This is due to the recent sharp increase in margin loan balances and forced liquidations."

He continued, "However, a rebound buying spree is expected due to the relatively stable trend in the dollar index and the decline in U.S. Treasury yields. Nevertheless, cautious sentiment is expected to spread ahead of the U.S. big tech earnings and domestic gross domestic product (GDP) announcements."

Han Ji-young, a researcher at Kiwoom Securities, said, "Despite mixed trends in the U.S. stock market, a rebound is expected supported by factors such as the easing of the sharp rise in market interest rates and the sharp drop in the dollar due to safe-haven demand." She added, "During the day, the market is expected to be influenced externally by movements in the U.S. futures market and U.S. interest rates, and domestically by changes in stock prices and supply-demand of secondary battery stocks following earnings announcements from POSCO Holdings, POSCO Future M, and other POSCO group companies."