[Good Morning Market] Korea Enters Earnings Season... Upward Trend Expected to Continue

On October 20 (local time), the New York Stock Exchange closed higher across the board, driven by gains in major technology stocks and easing US-China trade tensions. On October 21, the Korean stock market is also expected to continue its upward trend as external uncertainties subside and expectations for the earnings season grow.

Yonhap News Agency

On this day, the Dow Jones Industrial Average finished at 46,706.58, up 515.97 points (1.12%) from the previous session. The S&P 500 Index rose 71.12 points (1.07%) to 6,735.13, while the tech-heavy Nasdaq Composite gained 310.57 points (1.37%) to close at 22,990.54. The Russell 2000 Index, which focuses on small and mid-cap stocks, also climbed 1.95% to finish at 2,499.90.

Apple was undoubtedly the main driver of the market's rise. The strong sales of the iPhone 17, combined with an upward revision of its target price by investment bank Loop Capital, sent its share price soaring 3.94% to close at $262.24, marking a new all-time high. Apple's rally spread across the technology sector, boosting overall investor sentiment.

The easing of political uncertainty also contributed to the shift in market sentiment. Kevin Hassett, Chairman of the White House National Economic Council (NEC), stated that "the likelihood of the shutdown (temporary work stoppage) ending within this week is high" and added, "With the cooperation of moderate Democratic lawmakers, the government could return to normal operations."

Additionally, remarks by US President Donald Trump regarding trade negotiations with China further fueled market optimism. He said, "I have a very good relationship with Chinese President Xi Jinping, and we are scheduled to meet in Korea within a few weeks," adding, "When we leave Korea, we will have reached a very strong trade agreement. There will be no conflict." Amid heightened tensions due to China's rare earth export controls and the US's announcement of additional tariffs on China, investors focused on the growing expectations for a deal to be reached.

The KOSPI, which has been hitting record highs for several consecutive days, is also expected to maintain its upward momentum on the back of earnings season expectations. Lee Seonghun, a researcher at Kiwoom Securities, commented, "Although profit-taking desires are increasing, the market is likely to show another solid performance following the previous day," and explained, "As major domestic companies enter the full-fledged earnings season this week, the bullish sentiment will spread to stocks with strong earnings momentum."