[Good Morning Stock Market] New York Rises on Optimism for Economic Recovery... "KOSPI Depends on Foreign Investor Flows"

The U.S. stock market rose. Expectations for improved corporate earnings due to deregulation influenced the market. Meanwhile, on the 22nd, the key factor for the Korean stock market is expected to be whether foreign investor demand improves.

UPI Yonhap News

On the 21st (local time) at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed at 43,870.35, up 461.88 points (1.06%) from the previous trading day. The S&P 500 index rose 31.60 points (0.53%) to 5,948.71, and the tech-heavy Nasdaq index recorded 18,972.42, up 6.28 points (0.03%) from the previous close.

On that day, investors shifted focus from tech stocks to cyclical stocks. Optimism about the U.S. economy and the expectation that deregulation under President-elect Donald Trump could lead to improved corporate earnings drew renewed attention. By sector, financial stocks expected to benefit from deregulation in Trump's second term rose.

NVIDIA's earnings exceeded market expectations. NVIDIA reported revenue of $35.08 billion and adjusted earnings per share (EPS) of $0.81 for the third quarter (August to October).

These figures surpassed market forecasts ($33.16 billion and $0.75 EPS, respectively). Compared to a year ago, revenue surged 94% and net profit increased 109%. The fourth-quarter revenue forecast was $37.5 billion, with an expected fluctuation of around 2%, which also exceeded market expectations ($37.08 billion). However, the stock price closed up by only 0.53%.

Following NVIDIA's strong performance, semiconductor and software stocks related to the AI theme showed an upward trend. Seonghoon Lee, a researcher at Kiwoom Securities, explained, "Due to high expectations, NVIDIA's fourth-quarter guidance partly triggered some disappointing sell-offs, but the strong earnings confirmed that AI growth is still progressing smoothly."

He added, "As AI software companies also reported strong earnings and their stock prices surged, it became evident that the AI industry is expanding from hardware to software."

The domestic stock market is also expected to show strength centered on AI-related stocks. Researcher Lee said, "The domestic market is expected to start higher, reflecting the rise in semiconductor stocks such as NVIDIA and Micron in the U.S. market the previous day, with a focus on AI-related stocks."

However, the improvement in foreign investor demand remains a point to watch. Ji-won Kim, a researcher at KB Securities, analyzed, "Domestically, despite the launch of value-up funds and a rebound in Samseon Electronics, investment sentiment remains subdued. The key factor is whether foreign investor demand improves."