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There is concern that the volatility of the national stock market could increase further with the confirmation of the new coronavirus infection (Corona 19) by the president of the United States, Donald Trump. Experts urge you to pay attention to the possibility of frequent volatility in the domestic stock market, as it is a time of growing political uncertainty ahead of the US presidential election.
On the second day (local time), when President Trump was admitted to the hospital after being diagnosed with Corona 19, the US stock market ended immediately with crashes, focused on big tech stocks. Trump’s infection with Corona 19 and declining Trump approval ratings after the US presidential candidate’s television debate on the 29th of last month are particularly bad for big tech stocks. This is because the greater the probability of Trump’s defeat, the greater the probability that the Democratic Party will win in defending stricter regulations for big tech companies.
The crash in the US stock market has caused the national stock market to open six days after the Chuseok holiday. The Bank of Korea held a status check meeting on the 4th and predicted that “going forward, domestic and foreign financial markets are likely to show high volatility based on President Trump’s health, calendar-related uncertainties Presidential Elections and the Progress of Economic Stimulus Measures “. The national stock market generally fell before Chuseok and showed a tendency to recover after the holidays. In five business days after Chuseok last year, the KOSPI increased 2.07% on average and 3.57% in 2017.
In the securities industry, the uptrend, focused on existing growth stocks, is forecast to continue into the future, focused on “BIG” (drums, bio, Internet and games). However, I urge you to watch out for volatility until the US presidential election. Yuanta Securities researcher Cho Byeong-Hyun said: “The various policies proposed by the presidential candidates stimulate the expectation that ‘the presidential election is over’ in a situation where the stock market adjusts, but keep in mind that a month or two before the presidential election is a common political factor, when uncertainty increases. It should be done.”
Although the bad news from Trump shocked the stock market, it is not considered to have affected investor sentiment. Hana Financial Investment researcher Lee Jae-man said: “I am not satisfied with the adjustment of growth stocks with the NASDAQ, but there was no significant change (rise) in the dollar index and the renminbi exchange rate. It is difficult to judge that the preference for risky assets in particular has deteriorated. ” The US High Yield Spread maintained a downtrend, supporting the uptrend in stock prices, and the Russell 2000 Index, an index of small- and mid-cap stocks, rose for three consecutive business days.
“Rather, the stock market is paying attention to the policy card that Trump may suggest,” Lee said. “It is very likely that the need for fiscal spending will arise, since the recovery of the labor market is still insufficient.” Researcher Jo said: “If the government changes as a result of the presidential elections, the short-term stock market performance tends to be good.” “When the president and the Senate become the same party, the improvement in corporate sentiment is relatively rapid. You have to be careful at this point. “
Reporter Kang Chang-wook [email protected]
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