[Good Morning Stock Market] US Stocks Fall on First Trading Day of New Year... "KOSPI's Upside Remains Limited"

Stock Market Weakness Due to Tesla Slump and Apple Decline
Manufacturing Sector Weakness, 4Q GDP Forecast Downgraded
"KOSPI Expected to Maintain Limited Upside Trend"

The U.S. stock market closed lower on the first trading day of the new year.

UPI Yonhap News

On the 2nd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,392.27, down 151.95 points (0.36%) from the previous session. The S&P 500 index fell 13.03 points (0.22%) to 5,868.55, and the Nasdaq Composite index dropped 30 points (0.16%) to 19,280.79, respectively.

By stock, Tesla, whose vehicle sales significantly missed expectations, fell 6.08%. This marks five consecutive trading days of decline since December 26. Tesla sold 1,789,226 units last year, falling short of the market expectation of 1.8 million units. The 2023 sales volume (1.81 million units) also fell short, marking the first annual delivery decline in 10 years.

Among the large tech stock group 'Magnificent 7 (M7)' excluding Tesla, Apple also led the index decline, falling 2.62%. This was influenced by the continued decline in market share in China and downward forecasts for iPhone sales in the fourth quarter. On the bright side, Nvidia gained strength late in the session, closing up 2.99%. TSMC (2.07%) and ARM (3.92%) also rose, pushing the Philadelphia Semiconductor Index up 0.8%.

The U.S. manufacturing sector continues to show sluggish trends. The finalized December manufacturing Purchasing Managers' Index (PMI) from S&P Global was 49.4. Although this exceeded the market expectation of 48.3, it slightly contracted compared to November's 49.7. It remains below the baseline of 50. Additionally, the Atlanta Federal Reserve Bank's 'GDP Now' model, which estimates real-time U.S. economic growth, lowered its fourth-quarter growth forecast from 3.1% on December 24 to 2.6%. New unemployment insurance claims for the last week of December were 211,000, down 9,000 from the previous week.

Angelo Curkafas, Chief Investment Strategist at Edward Jones, said, "If you think of the market as taking two steps forward and one step back, we are at a stage of stepping back after tremendous success in 2024," adding, "We are seeing the market navigate a short-term overbought condition."

On the 2nd, the KOSPI closed at 2,398.94, down 0.55 points (0.22%) from the previous trading day. The market ended slightly lower as foreign net selling and individual net buying offset each other.

Seonghun Lee, a researcher at Kiwoom Securities, said, "Today, the domestic stock market is expected to continue a limited upward trend reflecting Tesla's weak delivery volume and the burden of the strong dollar-driven won-dollar exchange rate," adding, "With major events such as CES 2025 and the JP Morgan Healthcare Conference scheduled in early to mid-January, stock-specific rallies are expected in key themes like artificial intelligence (AI), robotics, and biotechnology." He also forecasted, "Considering that last year's decline was excessive, the domestic stock market is likely to gradually raise its lows in line with the global market."