[Good Morning Stock Market] "KOSPI Expected to Benefit from Apple-Related Stocks Amid FOMC Caution"

Apple Hits All-Time High... Regains 2nd Place in Market Cap
'S&P 500 Inclusion Expected' KKR Hits Record High
"KOSPI Focuses on Rebound of Apple Value Chain Companies After Previous Day's Sharp Drop"

On the 12th, the KOSPI is expected to benefit from the 'Apple effect' on related companies. However, due to cautious sentiment ahead of the U.S. Federal Open Market Committee (FOMC) meeting, the overall volatility is expected to be limited.

[Image source=Reuters Yonhap News]

On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,747.42, down 120.62 points (0.31%) from the previous session. The S&P 500 index rose 14.53 points (0.27%) to 5,375.32, and the Nasdaq index closed at 17,343.55, up 151.02 points (0.88%). Both the S&P 500 and Nasdaq indices closed at all-time highs.

It was 'Apple Day.' Apple closed at a record high of $207.15, up 7.26% from the previous session. The market reaction was lukewarm immediately after Apple unveiled its new artificial intelligence (AI) system called 'Apple Intelligence' the day before. However, the mood changed within a day as major investment banks (IBs) such as Morgan Stanley and Bank of America praised the system, expecting it to accelerate iPhone replacement cycles. Apple also reclaimed its position as the second-largest company by market capitalization, which it had lost to Nvidia. Nvidia fell 0.72%. Tesla, downgraded to a 'sell' rating by JP Morgan due to difficulties in generating robo-taxi revenue over the next few years, dropped 1.8%. Shares of Chinese electric vehicle manufacturers such as Xiaopeng (-5.4%), Nio (-5.5%), and Li Auto (-2.0%) fell amid concerns that the European Commission will impose tariffs on Chinese-made electric vehicles. Global private equity firm Kohlberg Kravis Roberts (KKR), which had shown strength after being included in the S&P 500, hit a record high of $110.21. Cryptocurrency-related stocks such as Coinbase Global (-2.25%) and MicroStrategy (-2.78%) showed weakness as Bitcoin fell to the $67,000 range.

The FOMC's June regular meeting began on this day. While a rate freeze is expected at this meeting, attention is focused on the dot plot to be released on the 12th. The dot plot is a chart showing FOMC members' projections of interest rate levels over the next few years. There are pessimistic views that the dot plot, which initially predicted three rate cuts this year, will be revised downward to two or fewer. Swiss investment bank UBS forecasted that if rate cuts are reduced to one, the rate cut schedule could be delayed until November or December. Ahead of the rate decision, the May Consumer Price Index (CPI) will also be released. The market consensus (average forecast) expects it to remain at 3.4%, the same as the previous month.

The previous day, the KOSPI closed at 2,705.32, up 0.15% from the previous session. It showed limited volatility ahead of major events such as the U.S. FOMC and CPI releases. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Since the U.S. stock market showed strength due to the Apple effect, we expect a rebound in Apple value chain companies that had sharply fallen the day before. However, rather than a broad upward trend, cautious sentiment is expected to dominate considering the U.S. FOMC meeting, CPI, and exchange rate trends."