time now for an in-depth look at the market news this afternoon and for that i'm joined on the line
by dr young joonseok professor of economics at the catholic university of korea professor
yan good afternoon thank you for coming on today happy to be here well let's start with stocks on
wall street last friday for the session it was a mix the dow jones was up four tenths of a percent
with its more traditional blue chips but the s p was down a little bit and the nasdaq with its
tech shares off more than one percent what's the story in the global markets as we start a new week
okay while the friday's results were mixed if you look at the whole week it was pretty much downward
for the week s p went down by 1.3 percent dow by 0.3 and nasdaq by 3.9 percent and that was
basically because of couple of news uh that was revealed on tuesday and wednesday last week
first of all the u.s fed started hinting very uh strongly that the next interest rate rise
that we will see in may may be a big step of 0.5 percentage point and the person who made
this point was leo brainard who it was usually known as the dumbest of the fed dubs so even
so if she's talking about the big step that means it's very likely that the next rate rise
uh will be such a la uh big step and then the fed minutes were published on wednesday
and uh the minutes mentioned that they will be uh begin quantitative tightening most likely in may
and quantitative tightening in this case means instead of letting bonds just mature
and disappear the fed will sell about 95 billion dollars worth of bonds per month
60 billion dollars worth of treasury bonds and 35 billion dollars worth of mortgage-based bonds
you compare that with what happened in 2017 quantitative tightening uh the feds sold about 50
billion dollars worth of bonds per month so this quantitative tightening if it goes on as planned
it will proceed twice as quickly and that will have almost as much of an effect as rate increases
so because of that the uh all u.s indices were down for the week and the 10-year treasury yields
hit a new three-year high on friday rising about 2.7 percent and the uh great the yield ended last
week at 2.38 compare that to the beginning of the year when it was only at 1.63 percent
a little bit of good news was that oil prices did rise on friday but it's settling down around 100
per barrel 98 dollars for uh west texas intermediate and about 102 dollars for
the uh brent uh but uh this week it's going to be uh pretty rough uh the futures for monday opening
is down for all three indices year to date the smp is down about uh 5.9 percent excuse me dow is down
by about 5.909 percent smp year-to-date it's uh down 6.4 percent nasdaq it's down by 13.4 percent
uh europe they're following the uh american pattern uh roughly dax cac and foot say they were
down on tuesday wednesday and thursday but up on friday uh it's the uh these uh indices started uh
trading about an hour ago and right now they're all downs between 0.2 and 0.9 for today and
then asia there's a difference of a degree but shanghai and hong seng was down since tuesday
and nikkei has been down on a downward trend since the end of march nikkei was down 0.6 today
shanghai and hang seng they're still trading but shanghai was down about 2.6 percent and hong sang
was down about 3.3 percent well now today in in the korean market it was a fairly volatile session
into positive territory on the cosby this morning just briefly then back down there were declines
in health care and bio some gains for financials and automakers tell us about the domestic market
well the korean market seems to be showing that nervousness as well and uh foreigners keep leaving
the korean stock market though they're leaving fairly slowly uh financial supervisory service
published a report uh today and for the last three straight months foreigners had negative
net investment that means on the net they put money out of the korean stock market in march they
took on the net about 4.9 trillion won out of the korean market cosby uh it's been on a uh almost
continuous downward trend since last tuesday uh today they're down 0.27 percent they ended
today at 2693.09 individuals and institutions bought foreigners sold year-to-date they're not
down 9.9 percent closed back today they're down 1.38 it ended today at 921.83 individual spot
institutions and foreigners sold and year-to-date they're down by 11.2 percent well as you mentioned
earlier professor oil prices they're holding below a hundred dollars a barrel having come down from
a high last month above 120 that goes for wti and korea's benchmark dubai crude countries including
korea have been releasing their oil reserves what do you see happening with oil prices well
the oil prices have obviously been on a roller coaster this year starting at 75
per barrel at the beginning of the year going as high as 123 per barrel in early march right around
the russian invasion of the ukraine and then it's been on a roughly downward pass since march 23rd
uh currently uh the wti is at 95.92 that's pretty very near the uh post-russian invasion low of 95
dollars and four cents which was on march 16th uh now uh the uh there has been some attempts to
limit the price rise of oil the u.s has been trying to pressure opec producers into producing
more oil but that has failed so far and u.s shell oil producers are not increasing their production
because a lot of them went out of business during the pandemic uh but uh the oil prices
seem to be on a downward path for the last two weeks because of some fortunately or rather
unfortunate events in some cases first of all the u.s has said that they will release 180 million
barrels of strategic reserves international energy agency says that they will release about 60
million barrels of oil as well this is frankly not enough to really counter the price rise effect but
it is apparently having some symbolic effect and then secondly us and eu in the second quarter they
typically have lower demand than the first quarter so that will help lower the uh oil price of some
and then third uh us is negotiating with japan with iran to loosen their sanctions
if they agree then iranian production may step up fourth and this is perhaps most important for the
price trend china is in a lockdown shanghai and other cities and that's lowering production
not only in china but it's lowering the possible growth rate for the world as uh as a whole so that
people are expecting that will reduce the demand for oil that's probably the major
factor which is keeping the oil prices from uh rising up even more than it did and then fifth
there's u.s uh some worries in the u.s where the oil companies are gouging their customers so u.s
oil manufacturers oil companies are reluctant to raise prices and then personally i wonder if
there's some speculation as well there's a lot of excess liquidity in the global financial markets
the central banks have started to raise interest rates but they haven't really raised the dollar
that much they haven't really started to absorb all that liquidity so that money
going someplace maybe that part a lot of it is going to uh oil and other commodities which is
perhaps not causing the price rises but certainly helping it along and finally in the past when
you had very high oil prices there had been some cheating by opec members so it wouldn't
surprise me if later on we found that some of the opec members were uh producing extra amount
amount over what they agreed on in opec to try to get some advantages from the current high prices
indeed well finally professor looking ahead this week the bank of korea is holding its meeting this
thursday on monetary policy they'll be deciding on interest rates and with inflation running at
four percent a rate hike is definitely considered to be on the cards what's on your radar in the
week ahead briefly okay well tuesday we have the uh liquidity report uh from bank of korea on uh
for february and savings institution household lending report on thursday we have export import
price indices uh which will show how much of the export increases are due to volume
and how much is due to price and perhaps the second most important stat coming out this week
other than the interest rate wednesday we will have march employment report and the united states
we will have cpi the consumer price index and producers price index numbers coming out this week
retail sales as well and on sunday we'll have the china gdp growth and industrial production
numbers out all that will be important to see how the global economy and inflation is going
all right we'll keep an eye on all of that with your help professor thank you
as always for sharing your insights with us we appreciate it thank you