[뉴욕증시-주간전망] M7, economic indicators, presidential election and Middle East… ‘Volatility advisory’

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[뉴욕증시-주간전망] M7, economic indicators, presidential election and Middle East… ‘Volatility advisory’

(New York = Yonhap News) Lim Ha-ram, Yonhap Infomax Correspondent = This week (October 28 – November 1), New York stock market investors paid attention to a wealth of materials, including the performance of major technology companies, the presidential election, Middle East risks, and economic indicators, leading to volatility. It seems to indicate that

This week, five of the seven largest technology stocks on the New York Stock Exchange report earnings. Google’s parent company Alphabet, Microsoft, Facebook’s Meta Platforms, and New York Stock Exchange major companies Apple and Amazon will announce their earnings. Major semiconductor stocks such as AMD also disclose their performance.

As most of the M7 (Magnificent 7) stocks that lead investment sentiment in the New York Stock Exchange announce their earnings, the spotlight is expected to be focused on these companies.

Last week, Tesla’s stock price soared as it reported net profit that exceeded market expectations. Tesla’s stock price soared more than 21% on the trading day following the earnings announcement.

Due to the ‘Tesla effect’, the Nasdaq index, which is centered on technology stocks, broke its all-time high last week. The NASDAQ index recorded weekly gains for seven consecutive weeks.

However, in the New York Stock Exchange last week, mixed trends appeared between technology stocks and the rest of the stocks. Last week, the Dow Jones Industrial Average, comprised of blue-chip stocks, recorded its first weekly decline in seven weeks. The Standard & Poor’s (S&P) 500 index also showed its first weekly decline since early September.

The upward march of the S&P 500 index and the Dow index, which had been recording the longest weekly gains this year, has been halted.

The factor holding back the rise of the Dow and S&P 500 indices is U.S. bond interest rates.

Concerns that the U.S. Federal Reserve’s rate of interest rate cuts may be slower than that of other central banks, including those in Europe, are causing a recent surge in bond yields.

The US 10-year bond interest rate is above 4.2%.

Rising bond interest rates usually act as a negative factor on the stock market. This is because rising bond interest rates increase capital raising costs for companies and dampen investment sentiment in risky assets.

Experts including Goldman Sachs are concerned that if the U.S. 10-year bond interest rate exceeds 4.3%, full-scale downward pressure may be exerted on the stock market.

The geopolitical conflict in the Middle East has also intensified again.

Over the weekend, the Israeli military carried out large-scale retaliatory airstrikes against Iran. The Israeli military announced that it had carried out precision strikes against Iranian military facilities in response to Iranian attacks that had continued for several months.

The immediate impact was limited as the raid occurred during the closing hours of financial markets after the New York Stock Exchange closed. In the virtual currency market, which operates without a break, the price of Bitcoin temporarily expanded its decline immediately after Israel’s retaliation began, and then showed a trend of reversing it.

It is expected that we will be able to accurately determine the impact of this attack on the financial market after regular market trading begins.

However, experts observed that Israel’s latest retaliation is not known to have hit Iran’s nuclear facilities or oil facilities, which are the core of the Iranian economy, so it will not cause a surge in international oil prices or a significant increase in volatility in the raw materials market.

The US presidential election is about 10 days away. As the situation continues to be extremely tight until the end, the risks related to US politics are also higher than ever.

There is a saying that what the financial market hates most is uncertainty, not bad news. Ahead of the presidential election results, there may be moves to realize profits or reduce risks in advance.

In particular, market caution is very high as the Federal Reserve’s Federal Open Market Committee (FOMC) meeting is scheduled for November right after the presidential election.

Meanwhile, a number of major economic indicators will also be announced this week.

First, labor market indicators, which have become the most important factor in the Fed’s monetary policy, are announced. The October U.S. nonfarm payrolls report, weekly number of new unemployment insurance claimants, Job Openings and Job Openings (JOLTs) report, and ADP private sector employment report are released.

The US’s third quarter growth rate forecast will also be announced.

Federal Reserve members are entering a ‘blackout’ week in which they refrain from making comments on monetary policy ahead of the November meeting. This week, the Federal Reserve’s favorite price indicator, the Personal Consumption Expenditures (PCE) price index, will also be released.

◇Main schedules and speeches

-October 28th

October Richmond Federal Reserve Manufacturing Index

October Dallas Fed Manufacturing Index

Ford Motors Announces On Semiconductor Earnings

-October 29th

September Job Recruitment and Job Change Report (JOLTs)

September wholesale inventory

August Case-Shiller, Federal Housing Administration (FHFA) Home Price Index

October Consumer Confidence Index

Alphabet, AMD, PayPal, McDonald’s, Pfizer, Visa, Chipotle Mexican Grill, Royal Caribbean Group Announce Earnings

-October 30th

October ADP Private Employment Report

3rd quarter gross domestic product (GDP) breaking news

September tentative home sales

Microsoft, Meta Platforms, Starbucks, Caterpillar, Eli Lilly, Clorox, Kraft Heinz, and GE Healthcare Technology earnings announcement

-October 31st

Weekly Number of New Unemployment Insurance Claimants

September Personal Consumption Expenditures (PCE) and Personal Income

October Challenger Reduction Report

3rd quarter employment cost index

October Chicago Fed Purchasing Managers’ Index (PMI)

Apple, Amazon, Uber, Mastercard, Generac, Estee Lauder, and Norwegian Cruise Line Holdings announce earnings

Bank of Japan (BOJ) base interest rate decision

-November 1st

New employment and unemployment rate in non-agricultural sector in October

October S&P Global Manufacturing PMI

October Institute for Supply Management (ISM) Manufacturing PMI

September Construction Spending

ExxonMobil earnings announcement

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