[Good Morning Market] U.S. Rises on Surprise Q3 Growth... KOSPI Expected to Open Higher

With the U.S. stock market rising on the back of a surprise third-quarter growth, the KOSPI is also expected to open higher on December 24.

AP Yonhap News

On December 23 (local time) in the New York stock market, the Dow Jones Industrial Average, which is centered on blue-chip stocks, closed at 48,442.41, up 79.73 points (0.16%) from the previous trading day. The S&P 500 Index, which focuses on large-cap stocks, rose 31.3 points (0.46%) to 6,909.79, marking an all-time high. The Nasdaq Index, which is centered on technology stocks, finished at 23,561.844, up 133.015 points (0.57%).

The driving force behind the rise was the third-quarter economic growth in the United States. According to the Bureau of Economic Analysis (BEA) under the U.S. Department of Commerce, the preliminary estimate for real gross domestic product (GDP) in the third quarter grew at an annualized rate of 4.3% compared to the previous quarter. This outpaced the second quarter’s growth rate of 3.8%. It also significantly exceeded the market expectation of 3.2% as compiled by Dow Jones. This is the highest growth rate since the third quarter of 2023 (4.7%).

By sector, stocks related to artificial intelligence (AI) led the rally. Nvidia and Broadcom jumped 3.01% and 2.3%, respectively. Alphabet also rose 1.48%.

Han Ji-young, a researcher at Kiwoom Securities, explained, "The fact that the U.S. third-quarter growth rate was a surprise could have raised doubts about a rate cut decision at the December Federal Open Market Committee (FOMC) meeting and led to a more conservative rate path by the Federal Reserve going forward." She added, "However, the data had been delayed for a considerable period due to the government shut down (temporary work stoppage), and other monthly indicators such as industrial production in October and the Conference Board Consumer Confidence Index in December were weak. As a result, expectations for a Fed rate cut next year were maintained, which continued to support risk appetite in the stock market."

The domestic stock market is also expected to start higher, buoyed by the gains in the U.S. market. She said, "With the Nasdaq's AI-driven strength and the easing of U.S.-China tensions due to the Trump administration's postponement of semiconductor regulations against China, buying is expected to flow into sectors that experienced sharp short-term declines the previous day, leading to an upward trend."

However, the exchange rate remains a factor that needs to be closely monitored. The previous day, the weekly won-dollar exchange rate closed at 1,483.6 won, up 3.5 won from the previous day. She emphasized, "Although concerns about the burden of a rising exchange rate will persist in the remaining period, it is appropriate to focus on export stocks, inbound consumption-related stocks, and stocks with year-end dividend demand momentum, considering that the overall market direction and the net buying environment by foreign investors have not been undermined."