[Good Morning Market] Mixed U.S. Stocks...Korean Market Also Expected to Stall

S&P 500 and Nasdaq Edge Lower, While Dow Jones Posts Modest Rebound
Concerns Over U.S. Economic Slowdown Partly Weigh on Korean Stock Market

The three major indices on the New York Stock Exchange ended mixed. Retail sales, which account for 70% of the U.S. economy, were weaker than expected, and concerns over the impact that artificial intelligence (AI) could have on the financial sector also appeared to dampen investor sentiment.

On the 10th (local time) at the New York Stock Exchange (NYSE), the S&P 500 index closed at 6,941.81, down 0.33% from the previous day. The tech-heavy Nasdaq index also fell 0.59% from the previous day to 23,102.47. In contrast, the Dow Jones Industrial Average rose 0.1% to 50,188.14, setting a new all-time high.

Major technology stocks were also weak. Nvidia fell 0.8%, while Micron Technology (-2.7%) and SanDisk (-7.2%), which have recently played the role of market leaders, also declined.

U.S. retail sales for December last year, released that day, came in at 735 billion dollars, down 0.02% from the previous month. This fell short of the market consensus for a 0.4% increase. Most categories contracted, including autos (-0.18%), electronics (-0.41%), apparel (-0.7%), and department stores (-0.71%). Online sales also rose only 0.05%. Despite the year-end shopping season, consumption declined in most categories except for necessities, heightening concerns about an economic slowdown. This is seen as the result of weakening real income growth since the second half of the year and high prices eroding consumers' purchasing power. As concerns over an economic slowdown grew, the market appeared to lose momentum.

The New York Federal Reserve's fourth-quarter Household Debt and Credit Report also showed a clear deterioration in household credit soundness. The share of delinquent household debt rose to 4.8%, up 0.3 percentage points from the previous quarter. Credit card debt increased 5.5% year-on-year. The student loan delinquency rate also remained elevated at 9.6%. Analysts say this points to structural problems stemming from asset polarization.

The market is waiting for the January employment report due on the 11th and the January inflation data on the 13th. Experts expect nonfarm payrolls in January to increase by 70,000 from December last year, with the unemployment rate remaining unchanged from the previous month at 4.4%.

The MSCI Korea equity exchange-traded fund (ETF), which moves in a similar pattern to the domestic stock market, fell 1.27%. The Philadelphia Semiconductor Index also declined 0.68%.

The KOSPI is also expected to show a stock-picking market after opening lower. During intraday trading, buying demand during corrections led by individual investors' flows is expected to provide support on the downside of the index. However, it is concerning that investor deposits, which are idle funds waiting to enter the stock market, decreased by more than 10 trillion won in a single day.

Han Ji-young, a researcher at Kiwoom Securities, said, "Sector rotation and the frequency of changes in ownership are increasing, creating a highly volatile environment where yesterday's share price gains do not easily guarantee today's gains," adding, "Given that the divergence between the KOSPI and KOSDAQ indices and their 20-day moving averages has narrowed to the low 100% range, the probability of a sharp price drop driven purely by technical overheating is not high."