Corona 19 re-proliferation, US-China conflict, US symptoms, etc.
“Stock market, narrow box zone prospects, construction, steel, semiconductors, etc.”
Photo = Getty Image Bank
This week, the domestic stock market is expected to move up and down in the narrow box range, losing its direction. The US Treasury bond rate, which hit the stock market, has declined, but the re-proliferation of the novel coronavirus infection (Corona 19), the conflict between the US and China, and the increase in US corporate taxes have emerged as new variables. Experts advised to pay attention to economically sensitive stocks such as steel and semiconductors as economic stimulus measures are still important.
Domestic and foreign stock markets trapped in the box zone
According to the Korea Exchange on the 28th, the KOSPI index last week ended at 3041.01, up 1.48 points (0.04%) from the previous week. Since the index fell to the 3000 line in February, it has been showing a boring sideways around the 3000 line for nearly two months.
The US stock market is also fluctuating. Last week on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 33,072.88, up 453.40 points (1.39%) from the previous trading day. The Standard & Poor’s (S&P) 500 index rose 65.02 points (1.66%) to 3974.54 over the same period, while the Nasdaq index rose 161.05 points (1.24%) to 13,138.73.
The Dow index rose by 1.4% this week. The S&P 500 rose about 1.6%, while the Nasdaq fell 0.6%.
U.S. Treasury yields have plummeted… Corona 19 re-proliferation, conflict between the US and China, rising variables in the US
The US Treasury bond yield, which has been a burden on the market, has stopped soaring. According to Investing.com, the US 10-year Treasury bond rate, which started at 0.93% a year earlier this year, immediately raised the level to the 1% level. Since then, it has risen gently, and in the past month, it has risen to 1.1% per annum. After that, on the 17th of the same month, it rose sharply, rising to 1.333% per year during the intraday.
From this month on, it quickly raised the highs. The US 10-year Treasury Bond yield, which started at 1.426% a year earlier this month, soared to 1.603% a year on the 8th, just a week later. On the 18th, it soared to 1.754% per year during the intraday. As of the 26th, the last trading day of last week, it has dropped to 1.631% per year.
The problem is that concerns over the third pandemic of Corona 19 have grown again. The number of corona19 confirmed cases has turned to an increase in all parts of the world. As the mutant virus spreads. In the US last week, the number of new cases increased in 21 states, and the blockade in Europe was expanded again.
The conflict between the US and China is also growing again. On the 22nd (local time), the United States sanctioned two additional Chinese officials who were involved in the crackdown on the human rights of minorities, including the Uighurs in Xinjiang in western China. This announcement came after the US-China high-level talks held in Alaska on the 18th to 19th ended without making a joint statement amid disagreements and conflicts over various issues.
It is also a burden that the Democratic Party of the United States is considering tax increases. To support the large-scale infrastructure package promoted by President Joe Biden. The White House, which has finished legislating a $1.9 trillion (about 2100 trillion won) economic stimulus bill, is currently preparing an infrastructure package worth $3 trillion (about 3,400 trillion won). Considering that the Donald Trump administration has supported the stock market by reducing corporate taxes, this is a negative issue for the stock market.
Dae-hoon Han, a researcher at SK Securities, said, “From the perspective of experiencing a rise in stock prices due to corporate tax cuts during the Trump administration, the tax increase is negative”. It will be delayed.”
Increasing the need for economic stimulus measures to turn into bad news… Attention to economically sensitive stocks
Although a new bad news has appeared in the market, it is explained that this is a factor that raises expectations for the government’s economic stimulus measures.
Kim Young-hwan, a researcher at NH Investment & Securities, said, “Concerns about re-proliferation of Corona 19 and reignition of the US-China conflict raise expectations that the government will be in a crisis situation.” “I said.
We should pay attention to economically sensitive stocks that are expected to benefit from stimulus measures. It is a diagnosis that economically sensitive stocks are promising even when expectations for earnings are reflected. It is advised to pay attention to the construction and construction materials, steel, media, energy, and semiconductor industries with steep earnings estimates.
Song-ryul Lee, reporter of Hankyung.com [email protected]