US stocks fell as fears of a slowdown in China’s economy amid the spread of COVID-19 grew. The slowdown of major stocks such as Apple (-2.17%) and Tesla (-6.84%) is expected to put a significant burden on the domestic stock market. However, an anti-buying force is also expected to flow in due to the previous day’s excessive decline.
■ Anticipating an influx of counter-buying through KOSPI bad news?
The fact that the US stock market was mostly sold off in technology stocks following a strong dollar is expected to weigh on the domestic stock market on the 22nd.
Seo Sang-young, a researcher at Mirae Asset Securities, said, “Volatility in the commodity futures market has increased, as international oil prices plunged to $75 during the mid-day, and economic blockade issues due to the spread of Corona in China have led . to Apple (-2.17%), parts stocks, and Tesla (-6.84%). “However, it is positive that the possibility of a change in monetary policy has been highlighted, as the president of the Federal Reserve Bank of San Francisco from Delhi, expressing concern that excessive tightening should be avoided,” he said.
He expected △MSCI Index ETF Korea to fall 2.74% △MSCI ETF Emerging Index to fall 1.26% △NDF won-dollar exchange rate of 1,359.00 won for one month, etc., and the gain-dollar exchange rate rose by 3 won and the KOSPI to rise by about 0.3%.
Han Ji-young, a researcher at Kiwoom Securities, said, “Technical buying will mainly flow into industries that suffered excessive decline the previous day, such as secondary battery cells, materials, and bio.
“From an industry perspective, there are still concerns about the strengthening of China’s containment measures, such as quarantine rumors due to President Xi Jinping’s classification of close contacts with the corona after the APEC meeting,” he said. of the increased volatility of stock prices,” he said.
Yeom Seung-hwan, director of eBest Investment & Securities, said, “The domestic stock market will start at a flat level,” and predicted, “The secondary battery is expected to be somewhat sluggish due to the Tesla shock.” He explained, “The domestic stock market will remain in the box range without direction for now.”
■ The US stock market fell due to concerns about an economic slowdown
US stocks fell as fears of a slowdown in China’s economy amid the spread of COVID-19 emerged. On the 21st (local time), the Dow Jones Index closed at 33700.28, down 45.41 points (0.13%) from the battlefield. The S&P 500 index closed at 3949.94, down 15.40 points (0.39%) from the battleground, and the Nasdaq closed at 11024.51, down 121.55 points (1.09%).
Investor sentiment declined as news emerged that China was tightening quarantine reins again as the number of confirmed cases of Corona 19 increased. The number of new infections in China has exceeded 20,000 for four consecutive days since the 16th, approaching the highest level ever recorded during the spread of Corona 19 this spring.
Federal Reserve officials have hinted at the possibility of slowing the pace of rate hikes, but the impact on markets has been limited. Cleveland Fed President Loretta Mester said in an interview with CNBC that day that the pace of rate hikes at the upcoming December meeting could be slower than 0.75 percentage points, which seems very appropriate.
■ Oil prices fall below $80 due to the spread of COVID-19 in China and rumors of increased production in oil producing countries
Oil prices fell below $80 per barrel due to concerns about containment due to the strengthening spread of Corona 19 in China and rumors of oil producers considering increasing production. On the 21st (local time), the December price of West Texas Intermediate (WTI) finished trading at $79.73 per barrel, down 35 cents (0.44%) from the previous level.
The price of the January next year contract, which becomes the next month’s contract from the next day, closed at $80.04 a barrel, down 7 cents (0.1%). WTI prices fell for a fourth consecutive trading day, falling below $80 a barrel for the first time since September 30. At one point during the day, oil prices fell more than 3.5% to $77.24 a barrel.
“If the price of WTI breaks below the previous low of $76.16 per barrel, there is a possibility of a drop to $75,” said Forex.com market analyst Pawad Rajakzada.
■ The consequences of the ‘FTX collapse’ continue
As the aftermath of the world’s top three virtual currency exchanges ‘FTX collapse’ continues, concern is growing throughout the industry. Until last week, Bitcoin, which had continued a stable flow, fell below $16,000. Shares of Coinbase, the largest cryptocurrency exchange in the United States, also plunged.
According to Coinbase on the 21st (2:00 pm Eastern Time), the price per bitcoin is trading at $15,955.34 (21,714,755 won), down 3.49% from 24 hours ago. The price of Ethereum also fell by more than 6%. Coinbase stock is down nearly 8% on the day, and the stock is trading.
The drop in cryptocurrency prices and the sharp drop in exchange stock prices stem from concerns that the effects of the FTX collapse could spread. After FTX filed for bankruptcy protection, some cryptocurrency lending companies that did business with FTX temporarily suspended transactions, while others are known to be preparing to file for possible bankruptcy.
■ LG Chem to build a 4 trillion won battery cathode material plant in Tennessee, USA
LG Chem will invest 4 trillion won to build the largest battery cathode material plant in the United States with an annual capacity of 120,000 tons. Through this, the company intends to actively respond to changes in the global battery material market, such as the US Inflation Reduction Act (IRA).
LG Chem held an MOU signing ceremony with the state of Tennessee on the 22nd in Clarksville, Tennessee, in the presence of Vice Chairman Shin Hak-cheol of LG Chem, Tennessee Governor Bill Lee and Tennessee Economic Development Minister Stuart McHolter. did LG Chem plans to build a factory by investing more than $3 billion (about 4 trillion won) alone on a 1.7 million square meter site in Clarksville, Tennessee, and to ensure an annual production capacity of 120,000 tons of cathode materials.
This is the level that can produce batteries for about 1.2 million high-performance pure electric vehicles per year, the most in the United States. The Tennessee cathode material plant will begin construction in the first quarter of next year and begin mass production from the end of 2025. After that, the production line will be increased and expanded to 120,000 tons per year by 2027.
Reporter Jang Chang-min cmjang@hankyung.com
