[Good Morning Market] All Eyes on Powell's Remarks... KOSPI Also in 'Wait-and-See Mode'

On August 22, the domestic stock market is expected to remain cautious as investors keep a close eye on the U.S. Federal Reserve's Jackson Hole meeting event.

Previously, on August 21 (local time), the New York stock market closed lower across the board, with growing concerns over hawkish (monetary tightening) remarks ahead of the Fed's Jackson Hole meeting. The Dow Jones Industrial Average, focused on blue-chip stocks, fell by 152.81 points (0.34%) to 44,785.5. The S&P 500, centered on large-cap stocks, dropped by 25.61 points (0.4%) to 6,370.17, and the tech-heavy Nasdaq declined by 72.545 points (0.34%) to 21,100.312.

Reuters Yonhap News

Suh Sangyoung, a researcher at Mirae Asset Securities, commented, "It appears that concerns that Fed Chair Jerome Powell might make remarks focusing more on inflation have stimulated the market," adding, "In fact, trading volume dropped significantly, indicating that investor caution has increased."

On this day, the domestic stock market is also expected to remain cautious, with attention focused on Powell's speech at the Jackson Hole Symposium. Han Jiyoung, a researcher at Kiwoom Securities, said, "Major global stock markets, including the KOSPI, have all undergone corrections this week, largely reflecting expectations for a hawkish Jackson Hole meeting in advance," and predicted, "The market will likely treat this event as a neutral outcome and shift its focus to next week's Nvidia earnings event."

As the KOSPI enters a phase of digesting supply in the second half of the year, foreign buying momentum has also slowed. On a monthly basis, net foreign buying reached 1.1 trillion won in May, 2.7 trillion won in June, and 6.3 trillion won in July, expanding until before August. However, so far this month, foreigners have been net sellers of around 600 billion won. The recent rise in the won-dollar exchange rate, nearing the 1,400 won level, is also a burden for foreign capital inflows.

Lee Sunghoon, a researcher at Kiwoom Securities, stated, "Considering that the absolute scale of net selling is not large, it seems that foreign investors are also maintaining a wait-and-see stance as they monitor external factors such as potential Fed rate cuts and the progress of domestic policy initiatives," adding, "Unless there is a proactive shift in policy stance by the authorities, foreign capital inflows will likely remain limited, and the domestic stock market's box-range trend is expected to persist in the short term."

Next week, several major market events are lined up, starting with President Lee Jaemyung's visit to the United States, a summit meeting with President Donald Trump on August 25, and the second Commercial Act amendment vote. Na Junghwan, a researcher at NH Investment & Securities, said, "Next week will be filled with numerous uncertain events, but once policy uncertainty is resolved, policy momentum could recover," suggesting a weekly KOSPI forecast band of 3,000 to 3,280.

Lee Kyungmin, a researcher at Daishin Securities, commented, "Industries related to the MASGA (Make American Shipbuilding Great Again) project, nuclear power, and LNG projects saw high volatility this week, and their short-term stock direction will be determined by the outcome of next week's Korea-U.S. summit discussions." He added, "Shipbuilding, machinery, defense, and domestic and overseas consumer stocks are currently in a mid- to short-term overheated phase, but can be approached from a buying perspective after sufficient corrections."