[굿모닝 증시] Still preference for risky assets… Year-end bull market continues in the new year

Expectations to benefit from the Korean IT industry, including the implementation of economic stimulus measures and sanctions for Chinese companies

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[아시아경제 이민우 기자] There is a prospect that the bull market that unfolded at the end of last year will continue in the new year. This is because the sentiment on risky asset preferences can continue through easing market uncertainty and supply-demand momentum, not just expectations for a bullish market at the beginning of the year.

◆Dae-Jun Kim, Researcher at Korea Investment & Securities =In January, the KOSPI is expected to rise. It is an extension of the rise in December last year. This is not a forecast based on the random January effect (a phenomenon in which the stock price increase rate is relatively high compared to other months). Several news from the US at the end of the year support the bullish outlook.

First of all, political uncertainty is being resolved by the loss of President Donald Trump’s veto. Last month, President Trump refused to sign the 2021 Defense Authorization Act (NDAA), which passed the Senate and House of Representatives, on the grounds of reducing US troops abroad and repealing Article 230 of the Communication Quality Act. However, unlike in the past, when Congress approved eight veto rights, President Trump’s influence disappeared by securing more than two-thirds of the votes through re-decision. The market is also recognizing the possibility of cooperation between the opposition parties while excluding the’Trump risk’.

There is also a stable atmosphere in the financial market. The Chicago Options Exchange Volatility Index (VIX), which can identify fears, is lower than the annual average, and the dollar related to the preference for safe assets remains weak. Ahead of the Senate elections in Georgia on the 5th, President Trump is on the verge of an affair, but the influence on the market is close to zero. In fact, it’s like the market erased the Trump variable. This atmosphere is likely to continue until the 20th, when the Joe Biden administration is established.

The implementation of additional stimulus measures is also a major basis. First of all, it was effective that President Trump signed the existing stimulus package without paying $2,000 in cash. Thanks to this, the US economy can continue its recovery path without major damage. The cash payment of $600 per person per week starting on the 29th of last month also helps to maintain consumption. Although this stimulus plan is a temporary measure, it has a meaning that it acts as a bridge so that the economic flow is not segmented up to the policy that the next administration will come up with. Looking at the Michigan consumer sentiment index, consumption momentum has not yet normalized, but considering the effects of current and future stimulus measures, sentiment is likely to improve. Interest rate spreads and expected inflation are also on the rise, suggesting that the market is forming a positive view. The stock market is expected to fully reflect these changes.

Sanctions for Chinese companies are also important. This suggests a possible return on profit. On December 31, last year, the New York Stock Exchange (NYSE) announced that it would stop trading three stock depository certificates (ADRs), including China Mobile, China Telecom, and China Unicom on the 7th and 11th. This is the result of President Trump’s executive order banning the investment of its own citizens in companies affiliated with the Chinese military in November last year. Some people think that exit from the New York stock market is not a problem because there are Hong Kong and Shanghai stock markets, but if you recognize this as the beginning of Chinese checks and expand the investment clock to the global whole, the feeling will be quite different.

When Chinese sanctions in the financial aspect go into full swing, countries other than China will benefit. The expected beneficiary country is likely to replace China and have a friendly relationship with the United States. Korea and Taiwan are dominant. Even when the regime changes, the view of China is no different from that of the previous government. As time goes by, there will be more interest in countries that replace China, and in fact, such countries are gaining interest in the global stock market. Korea’s IT is likely. The Korean IT industry is in considerable competition with China overseas. If Chinese IT stagnates, Korea can fully dig into that vacancy.

◆Namjung Moon, Researcher at Daishin Securities =Based on the January effect of the new year, the US stock market will again challenge the historical new price. Two factors that make investors expect an optimistic outlook will tolerate the widening gap between real and stock times after the Santa Rally. First, in the large policy framework of the inauguration of the Biden regime, the 5th economic stimulus plan worth 892 billion dollars was passed with the signature of President Trump on the 27th of last month, and the pace of economic recovery regained vitality. On the 5th, the result of the Georgia senator’s run-off vote began to raise the possibility of a reversal as the Democratic Party candidate approval rate increased in a recent poll. If the Democratic Party takes the two seats of the Georgia Senate, the Biden regime’s state administration is expected to gain momentum in the future. result

Psychological expectation that the new coronavirus infection (Corona 19) vaccine can be returned to daily life before Corona 19 may increase. The cumulative number of corona 19 confirmed cases in the U.S. was 207,149 (as of January 1), accounting for 6% of the total population. The cumulative death toll was 34,0443 million, surpassing major European countries. As the corona19 epidemic is getting worse, the corona19 vaccination is inevitably accelerated. According to the U.S. Centers for Disease Control and Prevention, the number of people vaccinated against Corona 19 was 2,581,125 (as of December 30 of last year), from 2127,000 to 470,000 in just two days until the 28th. Until mid-March, the current cumulative number of confirmed patients will be able to finish vaccination. Covid-19 vaccine spread is only speeding

Larger, the psychological stability of the vaccine will be highlighted in the new year rather than the side effects of the vaccine and will affect the stability of the stock market.

Reporter Lee Min-woo [email protected]