[Good Morning Stock Market] "Foreign Investors' Net Buying Still Vulnerable... Conservative Approach Needed"

Seokhwan Kim, Researcher at Mirae Asset Securities

On the 10th, the Korean stock market is expected to continue experiencing volatility despite the U.S. stock market closing higher, as foreign investors' net buying in the spot market remains weak.

On the previous day (local time), the Dow Jones Industrial Average in New York closed at 40,829.59, up 484.18 points (1.2%) from the previous trading day. The S&P 500 index rose 62.63 points (1.16%) to 5,471.05, and the Nasdaq index gained 193.77 points (1.16%) to close at 16,884.6.

All sectors in the U.S. stock market advanced, with strong performances from companies such as Palantir and Dell, which are scheduled to be newly included in the S&P benchmark index starting from the 23rd. Typically, an 'event-driven' effect (a strategy that captures profit opportunities from price fluctuations due to various events) can be expected until just before inclusion.

According to the 'August Consumer Expectations Survey' released by the Federal Reserve Bank of New York, the 1-year and 5-year expected inflation rates remained unchanged at 3.0% and 2.8%, respectively, compared to the previous month. The 3-year expected inflation rate rose from 2.3% to 2.5%. However, the likelihood of being unable to make at least minimum debt payments over the next three months (delinquency) reached 13.6%, the highest since April 2020.

Additionally, the Conference Board's August Employment Trends Index slightly improved to 109.04 compared to the previous month, but the 'trend' downward movement continued. The Mannheim Used Car Price Index for August rose 1.2% month-over-month but fell 3.9% year-over-year. The value of the dollar increased by 0.4% compared to the previous day amid weakened expectations for a 'big cut' by the Federal Reserve (Fed).

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The fundamental sentiment regarding market conditions is not optimistic," adding, "It is necessary to maintain a conservative investment perspective."