time now for an in-depth look at the market news this afternoon and for that i'm joined on the
line by dr yang junsuk professor of economics at the catholic university of korea professor
young good afternoon thanks so much for coming on today happy to be here well as we just heard last
friday stocks on wall street are sharply lower as inflation came in higher than expected a 40-year
high in fact cpi that's excluding food and energy prices was at six percent the down the s p off by
close to three percent the nasdaq three and a half percent what's the story in the global markets as
we start a new week okay well as you said we should start with the u.s inflation it rose
by 8.6 over 12 months that's the highest since december 1981 and it's risen from where it was
in april which was 8.3 percent but in these times of quickly changing uh prices we have to look
at the monthly change not the 12 months change and the monthly change for may was 1.0 percent
and this is very alarming because april's monthly increase was only 0.3 percent so while a lot of
analysts believe that inflation had peaked the numbers which came in actually show that if
nothing else inflation may be accelerating and the inflation numbers came in higher than expected the
expectation was around 8.3 percent the increase was broad-based with shelter gasoline and food
being the highest contributions core inflation as you stated over 12 months was six percent uh this
was again uh this was somewhat slow uh slower than it was in uh uh in april but monthly inflation uh
remained fairly steady it was 0.6 percent in both april and may so the uh increasing core
inflation seemed to indicate that inflation is now becoming more wider based than just grain and oil
now the analysts in the u.s stock market on one day they seem to be worrying about inflation
the other day they seem to be worrying about recession but if you look at the
numbers in the real economy the spending and labor numbers in the u.s so far seems to be very strong
and personal consumption expenditure for april which is the latest number we have uh rose by
one point four percent in nominal terms zero point five percent in inflation adjusted terms may's job
creation was three hundred and thirty thousand jobs labor force participate participation rate
was 62.3 percent which represents a healthy growth uh but it is slower than april and the
labor force participation rate is still below where it was pre-pandemic wage growth was 0.3
in may and 5.2 percent over the 12-month period which is relatively high but it is
also considerably behind the inflation figures so again one day the market seems to be worrying
about overheating and having more inflation on the other day they seem to be worrying about
a higher recession uh to the possibility of recession but because the inflation numbers came
in so high uh the uh survey seems to indicate that there's now 40 percent chance of a giant step when
the fed meet this week giant step in this case means 0.75 percentage point increase in interest
rate and more and more analysts are now arguing that u.s will have a recession in either the
fourth quarter this year or first quarter next year uh friday dow went down by 2.7 percent s
mp by 2.9 percent nasdaq by 3.5 and for the week dow fell by 4.6 smp by 5.1 percent nasdaq by 5.6
year-to-date dial fell by 14 14.2 percent smp by 18.7 percent and nasa by 28.4 uh for european
stocks well eurozone uh had 8.1 inflation in may over the last 12 months that's up from 7.4
percent in april uh eurozone have been running behind us in terms of inflation but now they've
effectively caught up with the u.s inflation rates because of that european central bank
has stated that they will shut down net purchases of government debt in june and raise rates in july
but there is some qualitative difference between inflation in u.s and eu in the u.s
part of the inflation is supply driven rise and cost of grain and oil like every other country
but u.s is experiencing inflation further because they have very strong demand european
uh eurozone uh their demand is not as strong but they're hit much more directly by the russian
invasion into ukraine so the air inflation seems to be much more uh supply uh factor driven uh on
uh friday football attack and dax uh oh excuse me today uh foots uh excuse me friday uh but the
attack and dax uh all fell and an asian front uh the uh chinese uh china uh inflation actually came
in lower than expectations it was 2.1 percent over the last 12 months where the uh uh people analysts
were expecting 2.2 percent so china and japan are the probably the only two major economies
which are expected to have expansionary policies this year uh on friday dk was down 1.5
shanghai was up 1.4 percent and hong kong was down 1.25 percent but today uh all the major asian
indices are down today nikkei was down 3.0 percent shanghai and hong kong are still trading but their
uh shanghai is down about 0.9 percent and i'm saying it's down by about 3.3 percent
well korean stocks today also off by quite a bit all the large cap stocks down anywhere from two to
five percent samsung electronics at its lowest since sometime in 2020 and the exchange rate
is shot right back up again to where it was about a month ago tell us about the domestic
market professor okay well the domestic market was pulled down by the u.s inflation figures
and the what's happening in the new york stock industries but also we had series of bad news last
week so cosby was down all week yesterday for uh for korea the oecd during last week revised korean
growth projection downwards to 2.7 percent this is in line with bank of korea government and kdi
projections for this year uh but perhaps more worryingly next year's gross projections were
revised downwards as well both world bank and oecd have revived the world growth projections downward
uh and so and so the uh concern now is that the korea's uh growth heavily depends on
exports but if the uh growth rate for the world is uh reduced that means exports will be reduced
as well and that will have big consequences for korean growth in the near future now cosby during
the last week fell by 2.8 and today it fell by additional 3.5 and it ended today at 2504
uh 0.51 individuals bought institutions and foreigners sold year-to-date cosby is down
16.2 percent cashback uh last week it was down on tuesday up on wednesday and thursday and
down on friday but on the net it fell down for the week last week car stack fell by
2.4 percent today it was down additional 4.72 it ended today at 828.77 individuals and foreigners
bought institutions sold year-to-date kostaq is down 20.1 percent well professor uh we'll have
to leave it there for today and uh catch up later this week after the fed meeting
uh professor thanks so much for sharing your insights with us we always appreciate it thank you