[Good Morning Market] US Stocks Hit Record Highs but Remain Mixed... Will the Korean Market Follow?

S&P 500 and Nasdaq Reach All-Time Highs
Mixed Fortunes Among Big Tech: Oracle Soars, Apple Stumbles
KOSPI Expected to Maintain Upward Momentum
"Be Prepared for Possible Profit-Taking"

The S&P 500 and Nasdaq indices reached all-time highs, driven by the surge in artificial intelligence (AI) semiconductor stocks. However, the momentum did not fully continue as mixed results among big tech (major information technology companies) dampened the overall market sentiment. Although the domestic stock market is expected to maintain an upward trend through the end of the year, there remains a possibility of short-term profit-taking.

On September 10 (local time), the S&P 500 index closed at 6,532.04, up 0.30% from the previous day. The Nasdaq Composite Index ended the session at 21,886.06, up 0.03%. In contrast, the Dow Jones Industrial Average finished trading at 44,590.92, down 0.48%.

Oracle presented record-breaking earnings guidance, and the Producer Price Index (PPI) for August declined compared to the previous month, providing a boost to the market. However, investor sentiment cooled, particularly for Apple and Amazon. Even among big tech companies, results diverged, which subdued the overall positive momentum in the market.

Although Oracle had reported earnings that fell short of expectations the previous day, the market responded to its order backlog. The order backlog soared to 455 billion dollars, a 359% surge compared to the same period last year. This far exceeded Wall Street’s forecast of 100% growth.

As a result, Oracle’s stock price jumped 36% in a single day, and its market capitalization swelled from 680 billion dollars to 922 billion dollars. Larry Ellison, Oracle’s co-founder, increased his net worth by more than 100 billion dollars in one day, surpassing Elon Musk, the CEO of Tesla, to become the world’s richest person.

The fact that the August PPI came in below expectations also acted as a positive factor. According to the U.S. Department of Labor, the August PPI, seasonally adjusted, fell by 0.1% from the previous month. This completely reversed the market’s forecast of a 0.3% increase. The core PPI, which excludes food and energy, also dropped by 0.1%, moving in the opposite direction of the expected 0.3% rise.

However, this positive momentum did not spread across the entire market, due to the divergence among big tech companies. Nvidia (up 3.83%) and Broadcom (up 9.77%) surged, while Apple (down 3.23%) and Amazon (down 3.32%) declined. The sharp drop in distribution margins within the PPI (from 2.0% to -1.7%) also raised concerns about third-quarter earnings due to deteriorating corporate profitability.

With the KOSPI surpassing 3,300 the previous day and setting a new all-time high, expectations for the Korean stock market have also grown. The MSCI Korea ETF, which tends to move similarly to the domestic stock market, closed up 2.31%. The MSCI Emerging Markets ETF and the Philadelphia Semiconductor Index also rose by 0.68% and 2.38%, respectively.

This is seen as the result of multiple positive factors, including the AI-driven momentum from Oracle in the United States, the expansion of the National Growth Fund, and expectations for tax reform. This trend is expected to continue through the end of the year.

However, in the short term, there is still a possibility of profit-taking. This is partly due to large-scale net buying by foreign investors and institutions, as well as the upcoming simultaneous expiration of futures and options. Han Ji-young, a researcher at Kiwoom Securities, analyzed, "Unless President Lee Jaemyung mentions segmentation by range (10 to 50 billion won) or raising the threshold (over 50 billion won) regarding the major shareholder capital gains tax during his 100-day inauguration press conference, the market should be prepared for profit-taking as previously anticipated factors have already been priced in."