[Good Morning Stock Market] US Stock Market Pullback... KOSPI Likely to Be Affected by Sharp Declines in NASDAQ

On the 18th, the KOSPI is expected to start lower due to the sharp decline in the US Nasdaq index last Friday.

On the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 43,444.99, down 305.87 points (0.70%) from the previous session. The S&P 500 index fell 78.55 points (1.32%) to 5,870.62, and the Nasdaq Composite index plunged 427.53 points (2.24%) to close at 18,680.12.

The New York stock market showed a significant correction amid a continued pullback from the rally following the US presidential election, combined with concerns over the Federal Reserve's (Fed) delay in cutting interest rates. The Philadelphia Semiconductor Index dropped 3.42% due to the earnings shock from Applied Materials, and the Russell 2000 small-cap index, which had reflected expectations of benefits from Trump’s policies, also declined for the fourth consecutive day.

Fed Chair Jerome Powell indicated that the current economic conditions show no need to rush rate cuts and suggested that the pace of cuts would be adjusted accordingly. Susan Collins, President of the Boston Federal Reserve Bank, who is considered a moderate within the Fed, stated that there is still no evidence of inflationary pressures intensifying again but mentioned that the December rate decision has not yet been finalized.

Austin Goolsby, President of the Chicago Fed and a representative dove, also pointed out that the October Personal Consumption Expenditures (PCE) inflation remains high and argued that if uncertainty about the ultimate destination of rate cuts is high, the pace of rate cuts may need to be adjusted.

The domestic stock market is expected to undergo a bottom confirmation process this week, influenced by the upcoming US Nvidia earnings announcement, speeches by Fed officials including those from the Chicago Fed, manufacturing Purchasing Managers' Indexes (PMI) from major countries such as the US and Europe, whether there will be a low-price buying spree centered on semiconductors following last week's sharp decline, and changes in the won-dollar exchange rate.

Han Ji-young, a researcher at Kiwoom Securities, said, “In the domestic stock market, market attention will focus on changes in Samsung Electronics' stock price and supply and demand.” He analyzed, “Although there was a surge of over 7% last Friday supported by low-price buying, the perception that foreign net selling over the past three months was excessive still predominates.”

He added, “In conclusion, the market may be shocked by the Nasdaq’s 2% plunge right after Monday’s opening, and throughout the week it will remain dependent on US developments such as Nvidia’s earnings. However, considering that the domestic stock market including Samsung Electronics is in a zone with excessive decline and significant low-price merit, it is appropriate to postpone a cash securing strategy through selling at this point as a secondary option.”