U.S. stocks turn lower on presidential election

U.S. stocks turn lower on presidential election jitters and late-half supply and demand fallout despite slowing prices

The U.S. stock market has shown price stability, with the PCE price index slowing down in early trading, with interest rates falling and the dollar weakening, expanding after the rise mainly in the semiconductor industry. However, as the consumer sentiment index was revised sharply, interest rates on government bonds turned upward. As a result, volatility in stocks and indices increased. In particular, the decline in new and renewable energy has widened amid the possibility of Trump's victory since the U.S. presidential debate, and large technology stocks, which had been strong due to the inflow of supply and demand at the end of the half-year, have shifted downward (Dau -0.10%, Nasdaq -0.71%, S&P 500 -0.40%, Russell 2000 +0.46%, Philadelphia Semiconductor Index +0.94%)

* Variables: Treasury yields rise despite continued slowdown in prices

U.S. personal income came in at 0.5% from a 0.3% increase a month earlier, exceeding expectations (0.4%), led by wage growth. Consumer spending, on the other hand, rose from 0.1% to 0.2% month-on-month, but fell below 0.3% expected. While health care and transportation services were strong, food services and accommodation slowed down after the last three months, overall service spending slowed for the fourth consecutive month from 0.4% to 0.3%. On the other hand, durable goods shifted from a 0.9% decrease to a 0.3% increase, non-durable goods shifted from a 0.2% decrease to a 0.2% increase, and the savings rate rose to 3.9%.

The PCE price index shifted from a 0.26% increase month-on-month to a -0.01% drop. On a year-on-year basis, it decreased from 2.68% to 2.56%. The core PCE price index slowed from 0.2% to 0.08% month-on-month, while the core PCE price index stabilized from 2.78% to 2.57% year-on-year. Core commodity prices slowed to a 0.18% decrease month-on-month, while core services excluding housing also slowed to a 0.10% increase from 0.28% month-on-month. The announcement of related indicators weakened the dollar and interest rates on government bonds fell mainly on short-term products. The stock market led to a strong performance in the early days of trading. In fact, San Francisco Fed Governor Mary Daly and Richmond Fed Governor Thomas Barkin said on the same day that the PCE price index was positive.

Meanwhile, the Chicago Fed announced during the session showed a significant improvement in its PMI from 35.4 to 47.4. On top of that, the University of Michigan's consumer sentiment index slowed to 68.2 from 69.1 last month, but it was raised from the preliminary 65.6. Expected inflation for one year was lowered from 3.3% to 3.0%. Despite slowing expected inflation after the announcement of related indicators, government bond yields expanded their range after turning upward thanks to an upward revision of consumer sentiment.

In particular, the fact that both Biden and Trump are concerned about an increase in government bond issuance amid Trump's victory in the first debate of the U.S. presidential election also increased interest rate hikes. In addition to the supply and demand factors of investors at the end of the year, increasing volatility. As such, the impact of the presidential election and the supply and demand at the end of the year affects the financial market as well as individual stocks, expanding volatility in the stock market

* Features: Big tech stocks turn lower

Alphabet (-1.84%) held its target price at $181, amid forecasts that Rosengreen will lose its search market share to BING due to the AI industry, but fell after it downgraded its investment opinion to neutral from buy. MS (-1.30%) was strong, but turned lower in the aftermath of supply and demand at the end of the year. Amazon (-2.32%) continued to strengthen after announcing policies to respond to Temu and Shein recently, but fell in the aftermath of supply and demand at the end of the year. Meta Platforms (-2.95%) has been sluggish in Australia, selling together with other large tech stocks such as Apple (-1.63%) due to the suspension of news services

NVIDIA (-0.36 percent), TSMC (+1.27 percent), Broadcom (+1.19 percent), AMD (+1.72 percent), Qualcomm (+2.07%), Micron (-0.53%) and Intel (+1.24 percent) showed sluggish performance recently, but today, they rose due to backlash. However, as government bond rates shifted upward, Nvidia and Micron increased volatility due to the end-of-quarter supply and demand, and eventually turned downward, while other semiconductor stocks remained elevated. As a result, the Philadelphia Semiconductor Index rose 0.94 percent

As the first U.S. presidential debate highlighted that the market ended up winning Trump, Tesla (+0.23 percent), Rivian (-7.26 percent), Nio (-5.24 percent), and QuantumScape (-2.19 percent) were sluggish. Of course, Tesla has turned upwards due to supply and demand at the end of the year. Solar energy stocks such as First Solar (-9.79 percent), Sunnova (14.29 percent), Enphase Energy (-5.25 percent), wind energy such as Nextra Energy (-3.95 percent), HCA Health (-6.41 percent), and Universal Health Service (-3.46 percent) were sluggish as well. On the other hand, managed medical companies such as Humana (+3.19 percent) and United Health (+4.69 percent) are bullish on Trump's policy.

Nike (-19.98 percent) plunged after citing sluggish performance and economic downturn and negative outlook on its future. U.S. foot rockers (-2.35 percent) as well as European sneaker stocks fell. JPMorgan (+1.55 percent), BOA (+1.32 percent), Citigroup (+3.10 percent), and Wells Fargo (+3.43 percent) rose after passing stress tests as concerns over regulations eased, including a reduction in dividends.

* Related to the Korean stock market

The MSCI Korea Stock Exchange ETF rose 0.46 percent and the MSCI Emerging Index ETF rose 0.19 percent. The Philadelphia Semiconductor Index rose 0.94 percent, the Russell 2000 index rose 0.46 percent and the Dow Transportation Index rose 0.98 percent. Night futures were down 0.45 percent. The one-month NDF dollar/won exchange rate, which affects the dollar/won exchange rate, hit 1,378.00 won on Friday. Changes are expected depending on the results of economic indicators, including the release of statistics on Korea's imports and exports and the manufacturing index of China and the United States on Monday (7/1)

* FICC: Corn, wheat plunges Vs. National long-term Treasury yields jump

International oil prices have been on the rise recently on concerns of a military clash between Israel and Hezbollah, but turned downward on the possibility of a slowdown in demand due to concerns over a slowdown in U.S. consumption. Gasoline fell sharply. Meanwhile, U.S. natural gas continued to be in stock after concerns over a hurricane eased the previous day