[Good Morning Market] US Stocks Close Mixed, Domestic Market "Defense and Dividend Stocks Response Effective"

While the US stock market closed mixed, analysis suggests that the domestic stock market should respond with defensive and dividend stocks amid concerns over macroeconomic uncertainties.

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On the 19th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 15.37 points (0.04%) from the previous trading day to close at 42,342.24. The S&P 500, centered on large-cap stocks, fell 5.08 points (0.09%) to 5,867.08, and the Nasdaq, focused on technology stocks, dropped 19.92 points (0.10%) to close at 19,372.77.

The three major indices initially rose together attempting a rebound but then experienced increased volatility with sharp fluctuations, ultimately finishing near the flat line. This is interpreted as lingering risk-aversion sentiment following the US Federal Open Market Committee (FOMC) meeting the previous day, which reduced the forecasted number of interest rate cuts next year from four to two.

By sector, only consumer discretionary, financials, technology, and utilities saw slight gains, while all other sectors declined. In particular, real estate and energy fell nearly 1%.

Among individual stocks, memory semiconductor manufacturer Micron Technology plunged more than 16% after its earnings announcement fell short of market expectations. Broadcom and AMD also dropped over 2%. On the other hand, software company Palantir Technologies rose nearly 4% amid buying interest following news of a new $619 million contract with the US military.

In the domestic market, amid prolonged high interest rates and concerns over a high exchange rate following the FOMC, defensive stocks are seen as a stable choice. Kim Yoon-jung, a researcher at LS Securities, said, "During the 'three highs' environment of high exchange rates, high interest rates, and high inflation from 2021 to 2022, sectors with defensive characteristics such as food and beverage, which are essential consumer goods, showed superior relative returns. Financial sectors like banks and insurance, which benefit from a high interest rate environment in terms of margins, can also be good alternatives. Stocks showing stable dividend growth are relatively safe choices."

Lee Kyung-min, a researcher at Daishin Securities, pointed out, "Currently, the KOSPI is in a deep value phase seeking a rebound after confirming a lock bottom, so further declines are limited. The key will be whether market anxiety can ease after tonight’s US Personal Consumption Expenditures (PCE) inflation data release."