It's time now for an in-depth look at the global markets this afternoon.
And for that, I'm joined on the line by Dr. Hwang Sei-woon, research fellow at the Korea
Capital Market Institute.
Dr. Hwang, thank you for coming on today.
Thank you.
We ended last week with Wall Street down a fair bit, the Nasdaq in particular.
Korea, though, looks like it's starting with decent gains.
Take us through the markets today.
Stocks ended lower Friday as Wall Street concluded a wild week amid trade war fears and worries
over the global economy.
As president Trump has clearly moved from trade wars to currency wars, investors will
need to incorporate intrinsic hedges to ride out market volatility and protect themselves
from policy errors.
Traders also kept a close eye on the bond market, where the recent appetite for U.S.
debt has pushed a bond market recession indicator close to a warning zone.
If investors trigger a recession warning in the bond market that tends to be negative
for stocks.
Asian shares inched up Monday on China recovery and yuan fixing.
Gains by Chinese equities and the yuan’s stronger-than-expected daily fixing helped
lift a broad gauge of Asian shares above water.
However, uncertainty over how the U.S.-China trade conflict will be resolved is still contributing
to market volatility.
Japan’s Nikkei gained 0.45%, while South Korea’s KOSPI rose 0.35%.
Last week, the Kospi and the Kosdaq plunged, the Kospi dipping below the 19-hundred level.
Where do you see Korean stocks going this week?
The KOSPI and KOSDAQ indexes, which showed a significant decline last week, are expected
to have their adjustment period this week.
The KOSPI and KOSDAQ indexes appear to be approaching the bottom at this point.
I expect the bottom of KOSPI and KOSDAQ be between 1900~1950, and 550~600 respectively,
considering the Price Book-value Ratio for each market.
This implies that the bench-mark indexes could fall even more, but the magnitude of the decline
is not likely to be significantly large.
There have been a number of bad news in the stock market over the past a few months including
escalation of the U.S.-China trade war and Japanese export restriction along with declining
domestic growth rate.
It is less likely that the environment surrounding the stock market will further deteriorate
for the time being.
Investors will be able to observe modest price recovery for this week.
This week some important news due out of the U.S. and China.
What else should we be watching?
The news of the US-China trade dispute and the direction of the value of the Chinese
Yuan will be the main price factors for this week.
Stock markets are likely to fluctuate following news related to the U.S.-China trade talks
scheduled for early September.
Investors will need to pay attention to the release of major economic indicators both
in China and the U.S.
In the U.S., key economic indicators such as the Consumer Price Index and the volume
of retail sales in July will be released this week.
Retail sales are expected to remain strong.
According to the Wall Street Journal, July retail sales were expected to increase 0.3%
on MoM basis.
In China, the data on industrial production and retail sales in July will be released
this week.
If Chinese export growth meets or exceeds market expectations, the stock price recovery
could become more clear.
Alright, Dr. Hwang.
That's where we'll have to leave it for today.
Thanks for coming on and sharing your insights.