[Good Morning Stock Market] Eyes on US Inflation Data... "KOSPI Expected to Start in Slightly Positive Range"

US Stock Market Mixed Amid Negative Indicators and 'Hawkish Remarks'
Financial Sector Watches Closely for US April CPI Release on 15th
"If CPI is Favorable, Preference for Stocks Will Increase"

On the 13th, the KOSPI is expected to start in a slightly positive range.

[Image source=UPI Yonhap News]

On the 10th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,512.84, up 125.08 points (0.32%) from the previous session. The S&P 500 rose 8.60 points (0.16%) to 5,222.68, while the Nasdaq fell 5.40 points (0.03%) to 16,340.87. On a weekly basis, the S&P 500 and Nasdaq closed higher for the third consecutive week, and the Dow for the fourth consecutive week.

On that day, the U.S. stock market started strong amid a continued positive atmosphere but ended mixed due to weak U.S. consumer sentiment, rising inflation expectations, and hawkish remarks from Federal Reserve (Fed) officials favoring monetary tightening. The preliminary University of Michigan Consumer Sentiment Index for May recorded 67.4, the lowest in six months (previous month 77.2). Short-term inflation expectations rose to 3.5% (previous month 3.2%), the highest in six months. Fed Governor Michelle Bowman stated, "At this point, I have not factored in any rate cuts for this year," and Dallas Fed President Lorie Logan said, "It is too early for rate cuts."

By individual stocks, Novavax surged nearly 99%, almost doubling in one day. Unlike Korea, the U.S. stock market does not have upper and lower price limits. The sharp rise followed news of a license agreement worth up to $1.2 billion with Sanofi, with whom Novavax plans to jointly commercialize a COVID-19 vaccine starting next year. TSMC, a leading semiconductor stock, rose 4.5% on news that its April sales increased 60% year-over-year. Sweetgreen and Mettler-Toledo, which reported first-quarter earnings surprises, rose 34% and 17%, respectively.

Last week (7th to 10th), the KOSPI fluctuated between 2,710.25 and 2,749.14, closing at 2,727.63. It was influenced by a semiconductor sector-led rally and increased volatility due to options expiration. The market is focusing on the U.S. April CPI release, scheduled for the 15th, which is considered the biggest event this month. Kim Young-hwan, a researcher at NH Investment & Securities, said, "The April CPI forecast is higher than the previous month, but if the actual figure is lower than expected, U.S. Treasury yields could fall further, which would be positive for the stock market."

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The KOSPI is expected to start in a slightly positive range today," adding, "Early this week, the domestic market is likely to show a high level of cautious sentiment toward the U.S. CPI." He added, "Since the beginning of the year, foreign investors have recorded a net purchase of about 22.7 trillion KRW in the domestic market, and if the CPI comes out at a favorable level, the preference for risk assets is likely to increase. The strong April sales of TSMC also suggest that optimistic outlooks for the semiconductor sector continue, which is positive."