[This Week’s Stock Predictions] Nvidia, Fed Minutes, and more to come.

On the afternoon of the 16th, the KOSPI and the won/dollar exchange rate are displayed on the status board of the dealing room at Hana Bank’s main branch in Jung-gu, Seoul. Yonhap News

Major domestic securities firms have predicted that the domestic stock market will enter a breathing phase this week. As the fear of long-term tightening in the U.S. has decreased, the stock market has rebounded, but there is less chance of showing a clear direction as there are no special events. The securities market is looking forward to the third-quarter results of Nvidia, which will be announced on the 21st (local time), and the release of the minutes of the Federal Reserve System (Fed) could provide a short-term momentum.

According to the Korea Exchange on the 20th, the KOSPI index closed at 2469.85, up 60.19 points (2.50%) from 2409.66 a week ago on the 10th. The KOSDAQ closed at 799.06, up 9.75 points (1.24%) from 789.31 during the same period. During this period, foreigners and institutions net purchased 859 billion won and 1.4077 trillion won in the KOSPI, while individuals net sold 2.2825 trillion won. In the KOSDAQ, foreigners and individuals bought 223.8 billion won and 46 billion won, respectively, while institutions sold off 282.2 billion won.

On the 14th, the U.S. Consumer Price Index (CPI) for October was released, showing a stable figure of 3.2%, lower than the market forecast (3.3%), which quickly improved investor sentiment. The U.S. 10-year Treasury yield, which had been looking over 5%, fell to the 4.4% range, and the global stock market, including the U.S., made a surprise rebound. Market participants are expecting the Fed to cut interest rates in the first half of next year after freezing interest rates in December.

Investment experts predict that the domestic stock market will remain quiet this week. There are no major economic indicators scheduled to be announced in the U.S., and the market is likely to adjust its speed due to fatigue. The minutes of the Federal Open Market Committee (FOMC) meeting in November will be released, but it is unlikely to be a major variable as Jerome Powell, chairman of the Fed, has already strongly expressed his position on monetary policy. The U.S. stock market will be closed on the 23rd for Thanksgiving and will close early on the 24th for ‘Black Friday,’ effectively opening for 3.5 days this week.

Jensen Huang, CEO of Nvidia. Seoul Economy DB

The direction of semiconductor stocks is expected to be determined by Nvidia’s third-quarter results, which will be announced on the 21st (local time). As Nvidia has recorded strong performance this year, sparking an AI investment boom, there is anticipation that the third-quarter results could boost the upward trend in the semiconductor industry. The securities industry’s outlook is favorable. The market expects Nvidia to record an EPS of $3.37 and revenues of $16.19 billion in the third quarter. This is slightly higher than Nvidia’s previously stated revenue guidance of $16 billion and more than triple the $5.9 billion in revenue in the third quarter of last year. Investors are also expected to focus on Nvidia’s future earnings guidance.

The possibility of a stock market rebound if the situation in the Middle East stabilizes following reports that Israel and Palestine may cease fighting has also been raised. The Washington Post, a U.S. daily, reported on the 18th (local time) that Israel, the U.S., and the Palestinian armed group Hamas are close to an agreement to release dozens of women and children held hostage in the Gaza Strip instead of ceasing fighting.

NH Investment & Securities predicts that the KOSPI will move within the range of 2430-2560 points this week. This implies no significant movement from the current level of 2469.85. Factors for the rise include U.S. inflation stability, extension of the U.S. Congress’s temporary budget, and expectations for the U.S. year-end shopping season, while potential factors for the decline include the possibility of Fed officials’ remarks to respond to expectations of a rate cut.

The securities industry has mentioned semiconductors, which are gradually improving their performance, internet and IT solutions, pharmaceuticals and bio, entertainment and games, overseas construction and machinery, cosmetics and clothing as recommended industries. “There is a need to focus on fundamentals (basic strength), and the stock price trend by industry will vary depending on the export situation,” said Choi Yoo-jun, a researcher at Shinhan Investment Corp. “If semiconductors show a visible recovery in exports, they will solidify their leading position.”