[Good Morning Stock Market] “KOSPI to Remain Range-Bound This Week… Wait and See Until Micron Earnings on the 30th”

Weekly KOSPI Range Projected at 6,500–7,150 Points

Focus on Fed Comments, U.S. Interest Rates, and U.S.-China Summit

This week, the KOSPI is projected to remain within a boxed range, attempting to re-enter the 7,000-point level.

According to Kiwoom Securities on the 21st, the weekly KOSPI range is forecast to be between 6,500 and 7,150 points. The KOSPI is expected to be influenced by changes in US long-term market interest rates, the September University of Michigan expected inflation index, Korea’s September export figures, the US-China summit, and domestic liquidity gaps due to upcoming holidays.

On September 18 (local time), the New York stock market closed with mixed results. The S&P 500 Index, led by large-cap stocks, closed at 7,650.50, up 12.74 points (0.17%) from the previous session. The tech-focused Nasdaq Composite Index finished at 26,522.55, up 104.25 points (0.39%). The Dow Jones Industrial Average ended the day at 51,682.64, down 95.40 points (0.18%) from the previous close.

Although there were expectations for semiconductor earnings such as Micron (up 3.9%) and SanDisk (up 10.1%) due to the outlook for rising memory prices, these were offset by the US 10-year Treasury yield crossing back above 5% and heightened volatility in supply and demand, due to the simultaneous expirations of futures and options contracts.

This week, remarks from key officials of the Federal Reserve system—including the New York and Chicago Federal Reserve Banks—and changes in the US 10-year Treasury yield due to oil price trends are expected to have a major impact on the market. In this context, in order to see if the KOSPI can establish a higher low, it will be important to monitor the trading direction of foreign investors, who turned net buyers again on September 18 after eight consecutive trading days as net sellers.

During this month, as the yield on the US 10-year Treasury surpassed the 5% level, volatility and sharp declines have continued in the stock market, prompting investors to become more alert to macroeconomic risks. However, since the Federal Open Market Committee (FOMC) meeting held on the 16th, it is noteworthy that there is a growing sentiment that interest rate hikes, supported by economic growth and earnings improvement, can be withstood by the stock market.

The US-China summit is another variable the market should pay close attention to. Issues such as the tariff truce, artificial intelligence (AI), advanced semiconductors, rare earth elements, and the two countries’ technological supremacy and supply chain dynamics will be discussed. It is reasonable to approach this summit not as a turning point for easing tensions, but as an event that will prevent further deterioration of conflicts. In particular, if the outcome confirms only the continued AI competition between the nations, rather than a slowdown in AI development, the possibility of policies slowing AI progress will be reduced, potentially improving investment sentiment across the entire AI infrastructure, including semiconductors.

Ji-Young Han, a researcher at Kiwoom Securities, commented, “Until we confirm whether profit momentum is being damaged during the third quarter earnings season, the base scenario should be that stock prices remain resilient to interest rate hikes. Even from a conservative standpoint, at least until Micron’s earnings announcement scheduled for the 30th, this base scenario should be prioritized.”

© The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.