As interest rates on US 10-year Treasury bonds soared to 1.6% during intraday and increased inflation concerns, the Korean stock market was hit by the KOSPI index on the 26th. The market is continuing to jump up and down 100 points a day.
This is because it is interpreted as a sign that the rich liquidity market based on ultra-low interest rates, which led the global stock market surge after the collapse of the new coronavirus infection (Corona 19) last year, is ending. Jerome Powell, chairman of the Federal Reserve System, has evolving concerns about an early monetary tightening, but the weakening is not working properly, as the shrinking investment sentiment expands volatility.
Experts diagnosed that the valuation burden for growth stocks such as semiconductors, automobiles, Internet, and rechargeable batteries may be exerted in the short term due to rising interest rates in US Treasury bonds, while value stocks such as economically sensitive stocks such as energy and chemicals and financial stocks are relatively attractive for investment. did.
It remains to be seen whether the rise in US Treasury yields will ease through the intervention of the Fed (Federal Reserve System), which has maintained a relaxed stance. Accordingly, it is necessary to keep an eye on the movement of US Treasury bonds, including the results of the Federal Open Market Committee (FOMC) in March.
Dae-Joon Kim, a researcher at Korea Investment & Securities, said, “I think that the percentage of growth stocks that are sensitive to discount rates should be lowered as it is highly likely that the interest rate will continue to rise. Until the Fed takes a new stance at the FOMC in March, we will confirm the economic improvement trend with macro indicators. It is necessary to respond mainly to sensitive stocks.”
On the other hand, some advice suggests that growth stocks should be increased at this time when growth stocks have been stagnant. It should be used as an opportunity to buy growth stocks at low prices. This is in line with the expectation that the domestic stock market will regain strength, centering on existing growth stocks, if the pace of interest rate rise is controlled after going through a phase of adaptation to rising pressures in inflation and interest rates.
Lee Kyung-min, head of investment strategy team at Daishin Securities, said, “In this section, it would be good to increase the share of the semiconductor, automobile, rechargeable battery, and Internet industries, which are the leading players, and include some cyclical (economically sensitive stocks) and financial stocks in terms of short-term trading.” He suggested a strategy to increase the proportion of growth stocks using volatility.
“The Internet and rechargeable batteries recorded record-high profits from last year, and profits jump up until next year. Automobiles and semiconductors will achieve record-high profits this year and at the latest next year as soon as possible.” “It is an industry that can make a trend increase regardless of the level.”
If the rise in US Treasury yields is interpreted as a sign of economic recovery, it is worth considering investing in consumer economic goods such as clothing, education, and media leisure. There are expectations for retaliatory consumption for consumer economic goods that have suffered from adverse events such as the US-China trade dispute and the novel coronavirus infection (Corona 19).
Among the chemical stocks classified as economy-sensitive stocks among experts, LG Chem, which is a leader in market capitalization, became a secondary battery company and turned into a growth stock. Some point out that it is no longer meaningful.
This week, it is worth paying attention to the negotiations between China and the United States for additional stimulus measures. Han Dae-hoon, a researcher at SK Securities, commented, “If the economic stimulus measures worth 25 trillion yuan are actually passed at both meetings and specific guidelines come out, the strength of raw materials and economic-sensitive industries will continue, but in the opposite case, disappointing sales may come out.” did.
In addition, additional stimulus packages passed through the House of Representatives are now negotiated in the Senate. If the stimulus package is passed by the Democratic Party alone, uncertainties related to infrastructure investment may increase in the future. Agreements with non-partisan lawmakers can reduce the size of the stimulus package, but it can reduce uncertainty over infrastructure investment.
In addition, major events such as the contents of the Fed’s Beige Book, the release of the US-China manufacturing index, the US employment report, and the Petroleum Export Organization (OPEC+) meeting with Saudi Arabia and Russia are waiting for this week.
It was written with the content provided through News1.