U.S. stock markets successfully turn higher as end-of-quarter buying flows in

10/01 U.S. stock markets successfully turn higher as end-of-quarter buying flows in

U.S. stock markets started lower amid concerns over shutdowns. In addition, banks and Russell 2000 index remained sluggish amid heightened anxiety caused by sluggish economic indicators, while pharmaceutical and economic defense stocks remained strong. In particular, Nvidia (+2.60%) was strong following the previous day, but most technology stocks were also weak. However, major investors’ buying spree to confirm their quarterly earnings flowed in ahead of the closing of the market, showing the power to reduce the drop or shift upward around M7 stocks, and succeeded in shifting upward. It returned gains just before the closing of the market after hours and is down 0.2% from the closing price (Dow +0.18%, Nasdaq +0.31%; S&P 500 +0.41%; Russell 2000 +0.05%, Philadelphia Semiconductor Index +0.87%)

*Factors to Change: Employment Insecurity Continues, Shutdown Issues

According to the JOLTs job search report in August, the number of job openings increased slightly from 72.08 million to 72.27 million. While leisure and hospitality businesses (+9.7 million) and education and healthcare (+9.4 million) increased, construction businesses (-11.5 million) decreased. The number of jobs per job seeker fell less than one-fold from the previous month, and the hiring rate also fell 0.1 percentage point to 3.2%, continuing jitters over the job market. In September, the consumer confidence index recorded 94.2, which was slower than 97.8. Both the expectation index (-1.3p) and the current situation index (-7.0p) fell. The employment-related abundant jobs fell 3.3 percentage points to 26.9%, while the difficulty in finding jobs remained at 19.1%. As a result, the employment gap fell 3.3 percentage points to 7.87 percentage points, leaving the job market jittery. One-year expected inflation expectations fell 0.3 percentage points to 5.8 percent. In general, consumers’ assessment of the economic situation has changed significantly recently.

In the meantime, the market is burdened by the fact that the government shutdown is only a few hours away. In particular, both President Trump and Vice President Barnes mentioned that shutdowns are inevitable. However, since there have been many cases where an agreement was reached right before the deadline in the past to avoid shutdowns, market impact is limited. Regarding the current budget bill, it is not easy to pass the Senate as some Republicans oppose the withdrawal of the Democratic Party’s budget cuts for Medicare and some Republicans oppose the reduction of fiscal spending. When the shutdown is implemented, it only affects discretionary spending, which accounts for about 25% of federal spending, and compulsory spending such as social security and Medicare continues. The shutdown usually ended briefly, especially when the military payday (October 15) is critical.

Economists say that GDP growth is revised down by 0.15%p per week and unemployment rises by 0.2%p per week in the wake of the shutdown. In addition, the announcement of economic indicators has been delayed and anxiety has increased due to the expansion of information asymmetry. The direction of the financial market is not clear, but the interest rate on government bonds and the dollar are weak. If the stock market was weak before the shutdown, it rose over time after the shutdown, while other changes in the stock market were not significant. If the index has shown a rebound, some adjustments have been seen, but the impact is limited to the extent that it is limited.

*Featured Stocks: Nvidia, Pharmaceuticals Strong

Semiconductors: Nvidia Continues Higher on Target Shares’ Upward News
Nvidia (+2.60%) rises as KeyBank raises target price to $250 from $230, saying it will maintain an edge over its rivals. In addition, as the company announced cooperation to introduce AI-based automation in the work of sensitive companies in cooperation with UI Pass and OpenAI, the market rose reflecting expectations for the expansion of AI service sector. The market tends to pay more attention to supply and demand areas, such as being sensitive to small positive factors. Broadcom (+0.61%) showed limited fluctuations despite the news of an upward target stock price, but ended up shifting higher ahead of the market close along with AMD (+0.27%). Micron (+2.09%) continued to rise on the back of rising NAND prices in the fourth quarter. Intel (-2.70%) continued to fall amid controversy over investment by TSMC (+2.22%). The Philadelphia Semiconductor Index weakened, but closed 0.87% higher after an upward shift ahead of the market close

AI Servers: Coreweave Rises On News Of Huge Contract With Meta Platforms
Coreweave (+11.70%) rose on the news that Evercore has signed a $14.2 billion contract to supply computing power with Meta Platforms, with its target stock price of $175. As the expectation of AI server expansion is raised, AI servers and hardware companies such as Super Microcomputer (+3.41%) and Dell (+5.88%) as well as Arista Network (+1.63%) and Seagate (+3.34%) are showing strong performance. Meanwhile, AI service company UI Pass (+6.53%) surged on the news that it will work with Nvidia and OpenAI to build a workflow. On the other hand, C3AI (+0.12%) fell and turned upward just before the market closed. Most technology stocks are buying due to the effect of supply and demand at the end of the quarter right before the market closes

Cars: Tesla Falls Amid Concerns Over Ending Tax Credit
Tesla (+0.34%) fell during the day due to rising concerns over slowing sales in the U.S. as the tax credit ended. However, with 19,300 new insurance registrations recorded in China last week, the news that the total sales in the third quarter increased 27% quarter-on-quarter to 16.5350 units is positive. Meanwhile, Canadian investment company Canaccord raised its target price from $333 to $490. Although it was weak due to concerns over U.S. sales during the day, it turned upwards based on such favorable materials, and supply and demand also rose, such as the inflow of buying right before the market closed. Electric vehicles such as Rivian (-3.74%) and Lucid (-1.33%), as well as GM (-0.25%) and Ford (-1.08%) are sluggish. Quantumscape (-0.48%) fell despite the news that it signed a cooperation agreement with Corning (+2.21%) to develop and commercialize separators for all-solid batteries. Lithium-related stocks, such as Albemarle (-6.68%), continued to fall following the previous day as they digested for sale following the recent rise. Especially, concerns about performance were highlighted

Pharmaceuticals and Healthcare: Rising, Reflecting Tariff Avoidance Expectations Despite Concerns Over Lower Drug Prices
Pfizer (+6.83%) rises as it claims it received a three-year tariff moratorium amid announcing price cuts.Mer