[Good Morning Stock Market] US Stock Market Closes Higher on Strong Employment Data

US Unemployment Claims Fall Below Expectations
Apple, TSMC Lead Tech Stocks Higher
KOSPI Expected to See Continued Buying Momentum Following Previous Day

On the 19th, the domestic stock market is expected to start with a gain of around 1%, supported by the rebound in the U.S. stock market.

[Image source=Reuters Yonhap News]

On the 18th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,468.61, up 201.94 points (0.54%) from the previous session. The S&P 500 index rose 41.73 points (0.88%) to 4,780.94, and the Nasdaq index closed at 15,055.65, up 200.03 points (1.36%) from the previous session.

Economic indicators suggesting a recovery in the U.S. economy brought positive momentum to the market that day. Weekly initial jobless claims decreased by 16,000 to 187,000, falling below the market expectation of 208,000. This is the lowest level in 16 months since September 2022, indicating a solid labor market. Additionally, December housing starts and building permits also showed significant improvement compared to market expectations.

Technology stocks showed strength, with Apple rising 3.26%. Bank of America upgraded Apple’s investment rating to 'Buy,' estimating a 20% upside potential over the next year. TSMC, which exceeded consensus estimates for both Q4 2023 revenue (NT$625.5 billion) and operating profit (NT$238.7 billion), recorded its largest daily gain (9.8%) since May last year. Supported by TSMC’s strong performance and optimistic outlook on the artificial intelligence (AI) industry, the semiconductor sector as a whole was strong, including Nvidia (1.9%), AMD (1.6%), Broadcom (3.6%), and Applied Materials (4.5%). Among the Magnificent 7 (Apple, Microsoft, Google Alphabet, Amazon, Nvidia, Meta, Tesla), only Tesla (-1.7%) showed weakness. Related ETFs such as the Nasdaq 100, XLK (technology), and SMH (semiconductors) hit new highs.

The domestic stock market closed slightly higher the previous day, with rebound buying inflows. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The KOSPI is expected to start with a gain of around 1% today," adding, "Foreign investors have shown a net selling bias of about 400 billion KRW in domestic semiconductors this week, but if some retracement occurs, the rebound in the stock market is likely to be larger."

Lee Seong-hoon, a researcher at Kiwoom Securities, said, "From a technical perspective, this is a likely short-term bottom for the stock market," and added, "In the past, companies whose earnings momentum improved during periods when earnings forecasts were being revised downward showed relatively good performance, so attention should be paid to corporate earnings outlooks." He also emphasized, "Investment should be made considering the earnings momentum of individual companies, especially those with excessive declines."