[Good Morning Market] Despite FOMC and CPI Variables, US Stocks Rise... "KOSPI Expected to Start Up 0.5%"

Impact on Domestic Stock Market Amid Semiconductor Strength Expectations
Philadelphia Semiconductor Index Hits Highest Level Since January 5, 2022

Image source=Reuters·Yonhap News

The domestic stock market is expected to start higher on the 12th. Ahead of the Federal Open Market Committee (FOMC) meeting, the U.S. stock market closed higher within a narrow range, and expectations for strength in the semiconductor sector are also seen as a positive factor.

On the 11th (local time), the Dow Jones Industrial Average rose 157.06 points (0.43%) to close at 36,404.93, the large-cap S&P 500 index ended at 4,622.44, up 18.07 points (0.39%). The tech-heavy Nasdaq index closed at 14,432.49, up 28.51 points (0.20%).

The market is focused on the U.S. Consumer Price Index (CPI) release and the FOMC. According to the November consumer outlook survey by the New York Federal Reserve Bank, the expected inflation rate for the next year was recorded at 3.4%, the lowest level since April 2021. The November CPI, to be released on the 12th, is expected to show a 3.1% year-on-year increase, continuing a slowing trend. Month-on-month, it is expected to remain flat, with the core CPI excluding energy and food rising 0.3% month-on-month and 4.0% year-on-year.

At the December FOMC meeting to be announced on the 13th, the Federal Reserve (Fed) is expected to keep interest rates steady at the current 5.25?5.50%. However, attention is focused less on whether rates will be held and more on Fed Chair Jerome Powell's press conference and the dot plot showing officials' rate projections. It is expected to provide hints about the future path of monetary policy.

Additionally, the Philadelphia Semiconductor Index rose 3.40%, closing at its highest level since January 5, 2022. AMD and Intel rose more than 4%, and Broadcom also gained 9%.

The KOSPI is expected to start 0.5?0.8% higher on the 12th. Seokhwan Kim, a researcher at Mirae Asset Investment Securities, explained, "Although semiconductor exports decreased by 4% in early December, expectations for strength in the U.S. semiconductor sector are high."

Jiyoung Han, a researcher at Kiwoom Securities, said, "Despite the New York Fed's easing inflation expectations and anticipation of the November CPI, cautious sentiment ahead of the FOMC, weakness in major U.S. tech stocks such as Apple, Tesla, and Nvidia, and uncertainties related to capital gains tax on major shareholders domestically are expected to limit the upside of the index." She added, "From an industry perspective, considering that the Philadelphia Semiconductor Index surged due to improved market conditions driven by the AI market boom for companies like Micron, AMD, and Broadcom, it is judged that the domestic stock market will also show sectoral differentiation centered on semiconductors."