[Good Morning Market] US Stock Market Ends Mixed... "KOSPI Expected to See Technical Rebound"

Dow Slightly Rises, Nasdaq & S&P 500 Decline Narrows
Big Cut Expectations Grow Amid Employment Data Concerns
KOSPI Technical Rebound Expected "Portfolio Balance Is Key"

The U.S. New York stock market closed mixed. Since the 'fear market' originating from the U.S. showed signs of calming down, the KOSPI is expected to see a technical rebound.

[Image source=Reuters Yonhap News]

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,974.97, up 38.04 points (0.09%) from the previous session. The S&P 500 index fell 8.86 points (0.16%) to 5520.07, and the Nasdaq index dropped 52.00 points (0.30%) to 17,084.30.

Unlike the previous day when all three major indices fell sharply creating a crash atmosphere, the Dow managed a slight rebound. The S&P 500 and Nasdaq indices continued their downward trend but with reduced losses. Concerns about the 'fear of recession' remained as employment indicators showed instability. According to the U.S. Department of Labor's July Job Openings and Labor Turnover Survey, seasonally adjusted job openings were 7.673 million, down 237,000 from the previous month. This was also the lowest level since January 2021. Weaker-than-expected employment and economic concerns increased expectations for a 'big cut' (a 0.5 percentage point cut in the benchmark interest rate) ahead of the Federal Open Market Committee (FOMC) meeting scheduled for the 17th-18th.

By individual stocks, Nvidia, which led the crash atmosphere the day before, fell again by 1.66%. The news that the U.S. Department of Justice issued a subpoena on antitrust violation charges had a negative impact. Apple (-0.86%), Google Alphabet (-0.50%), Amazon (-1.66%), and Microsoft (-0.13%) also declined together. On the other hand, some large tech stocks saw rebound buying. Tesla rose 4.18%, and Meta increased by 0.19%. For Tesla, the news that it sold 86,697 electric vehicles in China in August, up 17% from the previous month and 3% year-over-year, acted as a positive factor. Additionally, Coupang, whose investment rating was upgraded from 'Hold' to 'Outperform' by U.S. securities firm CLSA, rose 7.5%, while Dutch semiconductor company ASML, downgraded from 'Buy' to 'Neutral' by UBS, fell 4.0%.

In the market, there is a prevailing view that the stock market will show weakness in September, which has traditionally been dominated by declines, with some forecasts suggesting a drop of up to 10% this month alone. Some see this as a buying opportunity at the bottom. Chris Hyzy, Chief Investment Officer at Merrill and Bank of America Private Bank, said, "If you rebalance and diversify your portfolio over the next eight weeks, it could be the best opportunity to actually make the market work in favor of individual investors."

On the 4th, the KOSPI closed at 2580.80, down 83.83 points (3.15%) from the previous trading day. Foreigners and institutions led the decline by net selling 986.5 billion KRW and 730.8 billion KRW respectively. Semiconductor stocks were particularly weak.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "We expect a technical rebound following the excessive drop the previous day, but the rebound is likely to be limited due to Friday's U.S. employment data release and the absence of foreign demand." He added, "Foreign investors have net purchased nearly 19 trillion KRW in semiconductors in the domestic market this year, but as of the 4th, this has dropped to about 12 trillion KRW. Demand for sectors other than semiconductors appears to be solid, so ultimately, portfolio balance is important."