[Good Morning Stock Market] Disappearing 'Fear of R'... "KOSPI Expected to Start Higher"

S&P 500 Hits 42nd Record High on Strong Economic Indicators
'R Fear' Eases and Optimism Grows for China's Economic Rebound
"KOSPI Expected to Show Sector-Differentiated Market Trends"

The U.S. New York stock market closed higher across the board. Buying momentum in artificial intelligence (AI)-related stocks, led by Micron, brought vitality, and a series of market-friendly economic indicators were released, creating a favorable atmosphere.

[Image source=Reuters Yonhap News]

On the 26th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,175.11, up 260.36 points (0.62%) from the previous session. The S&P 500 index rose 23.11 points (0.40%) to 5,745.37, and the Nasdaq index closed at 18,190.29, up 108.08 points (0.60%) from the previous session. The S&P 500 set another all-time closing high, marking the 42nd record high this year.

It was a day when the 'fear of recession (R-word fear)' subsided. Concerns about employment instability decreased, and indicators showed that the economy remains healthy. The number of new unemployment claims for the week of September 15-21, released that day, was 218,000, down 4,000 from the previous week. This is the lowest level since May. It was also lower than the market expectation of 223,000. Additionally, the final GDP growth rate for the U.S. second quarter was recorded at 3.0%. The first quarter growth rate was revised upward by 0.2 percentage points from the previously announced 1.4% to 1.6%. U.S. durable goods orders (products expected to last more than three years) also performed better than expected, with the market anticipating a 2.8% decrease but showing no change.

By stock, Micron, which dispelled the 'semiconductor winter theory' with a 'surprise earnings' report the previous day, surged 14.73%, injecting warmth into the semiconductor sector. Major semiconductor stocks such as Nvidia (0.43%), AMD (3.38%), ASML (4.19%), and Qualcomm (2.61%) all rose together. Meta, which unveiled the augmented reality (AR) device 'Orion,' hit an intraday record high of $577 but closed down 0.08%. IT company Accenture rose 5.57%, buoyed by an 'earnings surprise' and plans for dividend increases and share buybacks. Southwest Airlines, whose management announced plans to increase profits, also rose 5.42%. On the other hand, Super Micro Computer plunged 12.17% after news that the U.S. Department of Justice had launched an investigation into accounting manipulation allegations.

The market's attention is focused on the seemingly soft landing of the U.S. economy and China's large-scale economic stimulus measures. Regarding whether China's economy will rebound significantly, Wall Street analysts are saying, "This time is different." Bruce Pang, chief economist at global real estate services firm JJL, predicted, "This stimulus could raise the growth rate by 0.2 percentage points." Scott Rubner, managing director at Goldman Sachs, said, "The Chinese market looks different this time," adding, "Demand for Chinese stocks is the highest since March 2021, and despite recent gains, the rise driven by foreign investors' active buying is just beginning." Not only in mainland China but also major Chinese companies listed in the U.S. have continued to strengthen following the stimulus announcement. On the 26th, Alibaba and JD.com each rose 10.1%, while Pinduoduo, the parent company of Temu, increased by 13.6%.

The KOSPI closed at 2,671.57, up 75.25 points (2.90%) from the previous trading day. Foreign investors, who returned to net buying after seven trading days, led the index's rise. Semiconductor stocks led the market as Samsung Electronics and SK Hynix rose together, buoyed by the Micron-driven momentum. Kiwoom Securities researchers Han Ji-young and Lee Seong-hoon said, "Today, the domestic stock market is expected to start higher, supported by reduced global macroeconomic uncertainties and strength in semiconductors and Chinese consumer stocks in the U.S. market." They added, "On the 26th, most sectors including semiconductors, secondary batteries, and finance rose simultaneously, but today, sectoral differentiation is expected to appear." They also pointed out whether foreign investors' net buying trend in semiconductors will continue and the mood of the Chinese stock market, which has the greatest influence on Korea among Asian markets, as key points to watch in today's trading.