[Good Morning Stock Market] US Dow Surpasses 40,000... "Korea Focuses on Nvidia Earnings"

With the US stock market surpassing the 40,000 mark at closing, the KOSPI is expected to start higher on the 20th. In particular, Nvidia's earnings report scheduled for this week (20th-24th) is anticipated to be a key factor influencing the KOSPI's movement.

[Image source=Reuters Yonhap News]

On the 17th of this month (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,043.59, up 134.21 points (0.34%) from the previous closing price. Other major indices recorded the S&P 500 at 5,303.27, up 6.17 points (0.12%), while the Nasdaq Composite closed at 16,685.97, down 12.35 points (0.07%).

This was the first time the Dow Jones closed above the 40,000 mark. Although it briefly surpassed 40,051.05 during the previous trading day, it fell back to close at 39,869.38. However, on this day, it successfully crossed the 40,000 threshold near market close.

The domestic stock market is also expected to rise, buoyed by the US market. Ji-young Han, a researcher at Kiwoom Securities, explained, "The Korean stock market is expected to attempt breaking previous highs again, influenced by the May Federal Open Market Committee (FOMC) minutes, remarks from key Federal Reserve presidents, manufacturing Purchasing Managers' Index (PMI) from major countries, the Bank of Korea's Monetary Policy Committee, changes in semiconductor sector stock prices following Nvidia's earnings, and whether domestic bio stocks regain investor sentiment."

In particular, Nvidia's earnings announcement scheduled for this week is expected to be crucial. Jun-ki Jo, a researcher at SK Securities, stated, "Few would disagree that Nvidia's earnings report is an event that will determine the stock market's direction for a considerable period ahead. This event is extremely important for the domestic stock market, where the semiconductor sector holds an absolute weight."

Researcher Ji-young Han also noted, "The Nvidia earnings event on the 22nd is worth attention as it could be another turning point in the stock market centered on artificial intelligence (AI) and semiconductors. Nvidia, which had continued its rally after the fourth-quarter earnings, has been trapped in a trading range for about two months since mid-March, unable to surpass previous highs amid overvaluation debates and negative news from Super Micro."

Meanwhile, the Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 1.4%, while the MSCI Emerging Markets Index ETF rose 0.4%. Considering this, the KOSPI is expected to start in a slightly positive range. Seok-hwan Kim, a researcher at Mirae Asset Securities, explained, "Last week, the KOSPI turned down after four weeks, but the KOSDAQ recorded a decline for two consecutive weeks. The KOSDAQ showed high sensitivity to individual company negative news." He added, "Recently, foreign investors have been net buyers in sectors expected to see improved annual earnings momentum this year. Ultimately, this confirms the 'basic' proposition that companies with strong fundamentals (earnings) are followed by momentum (stock price), and individual investors should pay attention to this trend."