[Good Morning Stock Market] US Stocks Rise on 'Expected Powell Remarks'... "KOSPI Expected to Start Higher"

With US stocks rising following remarks by Jerome Powell, Chair of the US Federal Reserve (Fed), reaffirming the possibility of a rate cut within the year, the KOSPI is also expected to start higher on the 7th.

On the 6th (local time), traders are working at the New York Stock Exchange (NYSE) in New York City, USA.
[Image source=Getty Images Yonhap News]

On the 6th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 38,661.05, up 75.86 points (0.2%) from the previous trading day. The large-cap S&P 500 index rose 26.11 points (0.51%) to 5,104.76, and the Nasdaq index closed at 16,031.54, up 91.96 points (0.58%).

On the day, Powell, appearing before the US House Financial Services Committee for the semiannual monetary policy report, maintained his previous stance that "he will not rush to cut rates until there is confidence that inflation has entered the 2% range due to the strength of the US economy." While he will not rush rate cuts, he reaffirmed the possibility of a cut within the year.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "There is a widespread assessment that Powell's testimony before the House, which attracted attention, 'ended largely as expected,'" adding, "He is using tools to maintain a strong labor market and growth while achieving progress on inflation, and it is evaluated that we are on a good path to reach that goal."

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 1.2%, and the MSCI Emerging Markets Index ETF also increased by 1.45%. Eurex KOSPI 200 futures rose 0.49%.

Researcher Kim explained, "The KOSPI is expected to start higher by around 0.4~0.7%. If the yen strengthens intraday due to expectations of the Bank of Japan (BOJ) normalizing interest rates, the won-dollar exchange rate decline may occur more rapidly. This is expected to create a favorable environment for foreign capital inflows."

Researchers Kim Ji-hyun and Han Ji-young of Kiwoom Securities predicted, "With some uncertainties regarding Powell's remarks resolved, and influenced by the US stock market showing strength centered on the Nasdaq and semiconductor sectors, as well as a recovery in risk appetite, the domestic stock market is expected to start higher today."

Meanwhile, the 1-month non-deliverable forward (NDF) won-dollar exchange rate in New York stood at 1,328.57 won, and the won-dollar exchange rate is expected to start down by 6 won on the day.