[Good Morning Stock Market] KOSPI Faces Volatility Amid Earnings Disappointment... Volatile Market Unfolds

On the 11th, the Korean stock market is expected to show volatility. Although the U.S. stock market rose, there are downside factors such as weak earnings from large companies including Samsung Electronics and cautious sentiment regarding the Consumer Price Index (CPI).

[Image source=Yonhap News]

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,695.73, up 170.57 points (0.45%) from the previous trading day. The S&P 500 index rose 26.95 points (0.57%) to 4,783.45. The tech-heavy Nasdaq index ended the day at 14,969.65, up 111.94 points (0.75%).

Investors appeared to be waiting for this week’s scheduled CPI release and corporate earnings announcements led by major banks. Amid growing caution that market expectations for a Federal Reserve (Fed) rate cut may be excessive, investor confidence in a short-term rally seems to have diminished. Additionally, comments from the President of the Federal Reserve Bank of New York increased volatility. John Williams stated, "Inflation still has a long way to go to reach the 2% target, so it is necessary to maintain a restrictive policy stance."

This week, earnings reports from major banks such as JP Morgan, Wells Fargo, and Citigroup are expected. Earnings from UnitedHealth Group and Delta Air Lines will also be released on the same day. According to FactSet, the net income of S&P 500-listed companies for the fourth quarter of last year is estimated to have increased by 1.3% year-over-year, marking two consecutive quarters of growth.

The Korean stock market is expected to show volatility today. Han Ji-young, a researcher at Kiwoom Securities, said, "There are upside factors such as the Nasdaq rally centered on Nvidia, which is continuously hitting new highs, and bargain buying following six consecutive days of decline," but added, "Downside factors such as cautious sentiment toward the U.S. CPI, the aftershocks of Samsung Electronics’ earnings shock, and weakness in the Philadelphia Semiconductor Index coexist, so a volatile market is expected to continue." She further noted, "Sensitivity to central bank policy moves is high, so the market will also be influenced by changes in the won-dollar exchange rate and domestic interest rates following the Bank of Korea’s Monetary Policy Committee meeting during the trading day."

Meanwhile, the Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.58%, and the Emerging Markets ETF declined 0.23%. Eurex night futures rose 0.28%. The New York Non-Deliverable Forward (NDF) won-dollar exchange rate stood at 1,318.35 won, reflecting a projected 3 won decline in the won-dollar exchange rate at the market open.