[Good Morning Stock Market] US Stocks' 'Uneasy Rebound'... "KOSPI Expected to Start Higher"

Rebound Buying After Sharp Drop... US 3 Major Indexes Rise Together
'Yen Carry Trade' Risk Remains... 'Unstable Rally'
"KOSPI, Focus on Leading Stocks Like Shipbuilding, Machinery, Cosmetics"

The sharply falling U.S. New York stock market has successfully rebounded. After three consecutive days of decline, it showed signs of recovering from the shock of 'Black Monday,' which peaked with a 'panic sell-off' driven by fear. Although some call it a 'fragile rebound' that has not fully recovered the losses, the downward trend has calmed for now, and it is expected that investor sentiment will also recover in the KOSPI.

[Image source=Getty Images Yonhap News]

On the 6th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,997.66, up 294.39 points (0.76%) from the previous session. The S&P 500 index rose 53.70 points (1.04%) to 5,240.03, and the Nasdaq index closed at 16,366.86, up 166.78 points (1.03%) from the previous session.

The New York stock market, which recorded its largest drop in two years the previous day, saw buying interest as various sectors began to evaluate that the fear of an 'R (Recession)' might be exaggerated. Lee Ga Meckler, partner at family investment fund Cherry Lane Investment, said, "People are returning with the belief that interest rate cuts will help stocks." Investment bank Morgan Stanley analyzed that "the U.S. economy is not in a recession." Harvard University professor Jace Furman said, "Those who are certain that the economy will fall into a recession are dramatically overstating their knowledge of the economy."

Although the worst situation has passed, there are also voices saying that stock price instability will continue for the time being because the risk of unwinding the yen carry trade (borrowing low-interest yen to invest), which is cited as the cause of the sharp drop, has not been resolved. This fund is estimated to be about $20 trillion (approximately 26,700 trillion KRW) worldwide. U.S. economic indicators that increase anxiety are also being released one after another. According to the 2nd quarter 'Household Debt and Credit Report' released by the Federal Reserve Bank of New York, total debt reached a record high of $17.8 trillion, up 0.6% from the previous quarter. Also, the credit card delinquency rate was 7.18%, the highest in 13 years.

Large tech stocks, including semiconductor-related ones that had recently experienced significant declines, led the rebound. In particular, Nvidia (3.78%) and Meta (3.86%) saw large gains, and Amazon (0.56%) and Microsoft (1.13%) also succeeded in rebounding. On the other hand, Apple, which was reported to have sold half of its shares recently held by Warren Buffett, continued to underperform. It closed down 0.97%, marking its lowest level in two months since June 11. Google Alphabet, which lost an antitrust lawsuit, also fell 0.06%. Intel, once a representative of semiconductors, continued its shocking downward rally. Its stock price fell below $20 for the first time in about 12 years since December 2012.

On the 6th, the KOSPI closed at 2,522.15, up 3.30% (80.60 points) from the previous trading day. Although it succeeded in rebounding after the sharp drop the day before, the increase was limited. Ji Hyun Kim, a researcher at Kiwoom Securities, said, "Since there was differentiation by stock depending on earnings and individual issues in the U.S. stock market, it is expected that the KOSPI will also start higher, supported by a partial recovery in investor sentiment," adding, "It is necessary to pay attention to the fact that the rebound was largest in existing leading stocks such as shipbuilding, machinery, and cosmetics, which have valid profit momentum by sector."