[Good Morning Stock Market] US Stocks Rise on Middle East Tension Easing... "KOSPI Expected to Show Individual Stock Trends"

Geopolitical Risk Eases, New York's 3 Major Indexes Rise
Big Tech Earnings Expectations Outweigh Concerns
"KOSPI Focuses on Stock-Specific Trends Based on Individual Earnings"

The U.S. New York stock market closed higher across the board, supported by easing tensions in the Middle East and expectations for strong corporate earnings.

[Image source=Reuters Yonhap News]

On the 28th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,387.57, up 273.17 points (0.65%) from the previous session. The S&P 500 rose 15.40 points (0.27%) to 5,823.52, and the Nasdaq Composite ended the day at 18,567.19, up 48.58 points (0.26%).

Market sentiment improved as Israel's airstrikes on Iran, which had shaken the market the previous day, subsided. Contrary to concerns, Israel did not attack oil or nuclear facilities. Oil prices also fell about 6% to $67.3 per barrel. With geopolitical concerns easing in the financial markets, optimism about earnings boosted the market. The last week of October is packed with earnings announcements from big tech companies. Although mixed flows appeared due to earnings anticipation, overall risk appetite prevailed.

Among the M7 stocks, Apple (0.86%), Alphabet (0.81%), Meta (0.86%), and Amazon (0.30%) rose. Tesla, which hit a 13-month high last week, fell 2.48%. Microsoft (-0.36%) and Nvidia (-0.72%) also declined slightly. As expectations grew for Donald Trump's potential election victory, a 'Trump trade' pattern emerged. Trump Media, where Trump is a major shareholder, surged 21.6%. Bitcoin recovered to $70,000 for the first time in three months. Trump has proclaimed himself the 'cryptocurrency president.' By sector, financials (1.1%), materials (0.8%), and utilities (0.8%) rose, but energy (-0.7%) saw the largest decline due to the sharp drop in oil prices.

This week, major companies will release their earnings reports in succession. Alphabet (29th), Microsoft (30th), Meta (30th), Amazon (31st), and Apple (31st) are scheduled to announce their third-quarter results in order. Market attention is also focused on key economic indicators such as the Labor Department's September Job Openings and Labor Turnover Survey (29th), ADP private employment report (30th), and weekly initial jobless claims (31st).

Mike Dickson, strategist at Horizon Investments, said, "Given the overall high valuations, the focus will be on whether they (big tech) can continue to achieve such growth rates." Anthony Sagrimbene of Ameriprise analyzed, "The stock market's rise ahead of the November 5th presidential election, benefiting from deregulation and tax cuts, may reflect investors increasingly expecting a Trump victory."

On the 28th, the KOSPI closed at 2,612.43, up 29.16 points (1.13%) from the previous trading day. Institutions led the index's rise with net purchases of 460.7 billion won. While secondary batteries showed strength amid Tesla's positive momentum, financial stocks such as banks and insurance were weak.

Han Ji-young and Lee Seong-hoon, researchers at Kiwoom Securities, said, "Despite the U.S. stock market's strength due to easing Middle East concerns, the index is expected to show limited movement due to the market having priced in the news the previous day. During the session, the direction of U.S. interest rates, additional rebounds in Samsung Electronics, and foreign capital inflows will be important, but more so, individual earnings of key companies like Hana Financial Group, LG Household & Health Care, and Samsung Electro-Mechanics will influence a stock-specific market." They added, "Despite a strong 1% gain the previous day, continued foreign selling of Korean stocks raises concerns about the market's direction."