[Good Morning Stock Market] US Stocks Hit New High Again... Financial Stocks' Strong Earnings and Inflation Index 'Double Pull'

PPI Below Expectations, Inflation Concerns Ease
Large Bank Stocks Lead Index Rise with Strong Performance
"Domestic Companies Face Export Peak-Out and Competitiveness Weakening Concerns"

The U.S. New York stock market closed higher thanks to the September Producer Price Index (PPI) and strong earnings from major banks. The Dow Jones Industrial Average and the S&P 500 index once again hit record highs.

[Image source=Reuters Yonhap News]

On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,863.86, up 409.74 points (0.97%) from the previous session. The S&P 500 rose 34.98 points (0.61%) to 5,815.03, and the Nasdaq closed at 18,342.94, up 60.89 points (0.33%). Both the Dow and S&P 500 closed at all-time highs.

The U.S. Department of Labor reported that the September PPI rose 0.0% month-over-month, showing no change. This was below experts' expectations of a 0.1% increase. Year-over-year, it rose 1.8%, but this was a slowdown compared to August's 1.9%.

By sector, financials, which reported a series of strong earnings, were particularly robust. Wells Fargo, whose third-quarter earnings exceeded expectations, rose 5.6%, and JP Morgan Chase, the largest investment bank by market capitalization, gained 4.4%. Bank of America (4.95%), Citigroup (3.56%), and Goldman Sachs (2.50%) also rose consecutively, contributing to the index gains.

On the other hand, Tesla, which unveiled its robo-taxi 'Cybercap,' plunged 8.8%. Despite a large-scale event led personally by CEO Elon Musk, it apparently failed to meet investors' expectations. The biggest beneficiary of Tesla's event was Uber, which soared 10.81% to a 52-week high amid forecasts that autonomous driving technology still has a long way to go. Alphabet's Class A (0.7%) and Class C (0.8%) shares also rose, buoyed by expectations of Waymo's technological superiority in robo-taxi technology compared to Tesla. Meanwhile, Nvidia (-0.01%) maintained a stable trend with little price fluctuation, and BlackRock, the world's largest asset manager, rose 3.6% on news of surpassing $450 billion in alternative investment assets and strong third-quarter earnings.

U.S. economic media CNBC stated, "The U.S. stock market closed higher due to the September PPI falling short of expectations announced by the U.S. Department of Labor, which increased expectations for further interest rate cuts by the Federal Reserve (Fed), and the strong earnings from JP Morgan Chase, the largest U.S. bank. In particular, the Dow Jones index reached an all-time high." Key economic indicators to be released this week include September retail sales (on the 17th), and third-quarter earnings from major companies such as Goldman Sachs, Bank of America, Citigroup (all reporting on the 14th), Morgan Stanley (15th), and Netflix (17th) are also points of interest.

In the bond market, the U.S. 10-year Treasury yield reached 4.11%, marking the highest level in two months. This is attributed to the PPI maintaining the previous month's level while core inflation slightly exceeded expectations, sustaining inflation concerns and lowering market expectations for Fed rate cuts. West Texas Intermediate (WTI) crude oil prices fell 0.47% to $75.49, while gold prices rose 0.91% to $2,657.20.

On the 11th, the KOSPI closed at 2,596.91, down 2.25 points (0.09%) from the previous trading day. It showed a 'strong start but weak finish' pattern amid institutional selling. Domestic companies are expected to face continued concerns as exports and operating profits are forecasted to decline. The impact of the 'Tesla shock' on domestic secondary battery stocks is also drawing attention. The market capitalization of the top 10 domestic secondary battery companies has increased by nearly 20 trillion won over the past month, but there are concerns this trend could be dampened.

Researcher Heo Jae-hwan of Eugene Investment & Securities said, "The semiconductor export growth rate, which had driven domestic exports and growth, has passed its peak, and semiconductor operating profit estimates are being revised downward." He added, "The fundamental problem is the weakening competitiveness of domestic companies and declining profitability." He noted, "Just because stocks are undervalued does not mean prices will easily rise. Attention should be paid to consumer and service sectors, which are relatively seeing profit upgrades, such as cosmetics, apparel, securities, insurance, and essential consumer goods, rather than export- or economy-sensitive manufacturing."