[In-depth] Global market wrap-up _ 081219


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.

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