[Good Morning Market] US Stock Market Ends Mixed... KOSPI Expected to Start Slightly Lower

[Image source=Reuters Yonhap News]

The U.S. stock market closed mixed due to conflicting remarks from Federal Reserve (Fed) officials, and the KOSPI is expected to start slightly lower on the 30th.

On the 29th (local time), the three major U.S. stock indices in New York closed mixed within a narrow range ahead of the release of the Personal Consumption Expenditures (PCE) price index, an inflation indicator closely watched by the Fed, amid expectations of a directional shift next year.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,430.42, up 13.44 points (0.04%) from the previous session. The S&P 500, focused on large-cap stocks, fell 4.31 points (0.09%) to 4,550.58, and the tech-heavy Nasdaq dropped 23.27 points (0.16%) to 14,258.49.

With the preliminary U.S. third-quarter GDP growth rate revised upward from 4.9% to 5.2%, U.S. Treasury yields faced increased downward pressure across the curve. This reflects concerns that the current high real interest rate levels could act as a headwind to the economy. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated, "The inflation slowdown trend is expected to continue, and I am more confident than before about a soft landing for the U.S. economy." On the other hand, Thomas Barkin, President of the Richmond Fed, expressed the view that "it is premature to cut interest rates as there is no evidence yet that inflation has fallen to the desired level."

Among the 11 sectors of the S&P 500, communication services, utilities, energy, and consumer discretionary sectors declined, while financials, real estate, materials, and industrials rose. General Motors (GM) surged 9.38% after announcing a $10 billion share buyback and dividend increase plan. Fluence Energy (23.78%), Foot Locker (16.07%), NetApp (14.63%), and Workday (11.02%) also saw their stock prices rise after reporting quarterly earnings that exceeded market expectations.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) and MSCI Emerging Markets Index ETF fell 0.17% and 0.58%, respectively. Eurex KOSPI 200 futures dropped 0.13%. The KOSPI is expected to open slightly lower.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The domestic stock market showed a pattern of weakness followed by strength the previous day, as the scale of foreign investors' net selling of spot stocks gradually eased in the early session." He added, "The Organization for Economic Cooperation and Development (OECD) raised South Korea's growth forecast for next year from 2.1% to 2.3%, and Goldman Sachs projected that 'the Korean stock market is undervalued' with 'earnings growth next year reaching 54%.' These factors are expected to positively influence the domestic market's weak fundamentals and upward momentum."

Meanwhile, the one-month non-deliverable forward (NDF) won-dollar exchange rate stood at 1,288.75 won, and reflecting this, the won-dollar exchange rate is expected to open 2 won lower.