[Good Morning Stock Market] US Economic Soft Landing Outlook... KOSPI, Foreign Investor Demand Expected

On the 16th, the KOSPI is expected to rise due to forecasts that the U.S. economy will achieve a soft landing and the net buying trend of foreigners who had recently withdrawn.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,563.06, up 554.67 points (1.39%) from the previous session. The S&P 500 index rose 88.01 points (1.61%) to 5,543.22, and the Nasdaq Composite surged 401.89 points (2.34%) to close at 17,594.50.

The New York stock market closed higher across the board, influenced by positive news alleviating concerns about economic slowdown. According to the U.S. Department of Commerce, retail sales in the U.S. for July, seasonally adjusted, increased by 1% from the previous month to $709.7 billion, significantly exceeding the market expectation of a 0.4% increase. This also marked a substantial improvement compared to the June figure, which showed a 0.2% decrease month-over-month.

Weekly new unemployment insurance claims also decreased, falling below expectations. According to the U.S. Department of Labor, for the week ending on the 10th, new unemployment claims were 227,000 on a seasonally adjusted basis, down 7,000 from the previous week. This figure was also below the market expectation of 236,000.

U.S. Treasury yields rose across the board, reflecting a healthy economy, and the probability of a 50 basis point (1bp = 0.01 percentage point) rate cut at the September Federal Open Market Committee (FOMC) meeting dropped significantly from 55% a week ago to about 24% currently. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the fear index, recorded 15.22, below the level at the end of last month.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 1.0%, and the MSCI Emerging Markets Index ETF increased by 1.1%. Eurex KOSPI 200 futures closed up 0.1%.

On this day, the KOSPI is expected to be influenced by risk asset preference sentiment due to eased concerns about the U.S. economy. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, “The easing of uncertainty about the U.S. economy and the increased preference for risk assets will have a positive impact on the domestic stock market,” adding, “In particular, a turnaround in foreign investors’ supply and demand is expected, as they had net sold more than 4 trillion won in the semiconductor sector alone over the past month.”

Byun Jun-ho, a researcher at IBK Investment & Securities, analyzed, “As events such as the Jackson Hole meeting, Nvidia earnings announcement, and Middle East risks approach, the market’s rebound momentum will gradually weaken after next week, shifting to a wait-and-see mode,” and added, “Since the market rebound has progressed to some extent, a strategy of compressing the portfolio into individual stocks rather than the entire market seems effective.”

Meanwhile, the 1-month Non-Deliverable Forward (NDF) USD/KRW exchange rate was 1,364 won, and reflecting this, the USD/KRW exchange rate is expected to start 5 won higher compared to the previous day.