A display shows the Kospi index and the exchange rate between the South Korean won and the U.S. dollar inside a trading room at Hana Bank in Seoul, South Korea, Monday, Dec. 16, 2024.
SeongJoon Cho | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
All eyes on the US jobs report
The US non-farm payrolls report for December will be released later on Friday. Economists expect it to show an increase of 155,000 jobsdown from 227,000 in November, and the unemployment rate will remain unchanged at 4.2%. Analysts from Goldman Sachs and Citigrouphowever, they think both numbers will be worse than consensus forecasts.
US markets dark, European markets close higher
American markets were closed on Thursday in honor of former US President Jimmy Carter, who died at the end of December at the age of 100. European regional Stoxx 600 the index added 0.42% after that. start the day in negative territory. Denmark’s Moller-Maersk fell 5.8% amid a bigger sell-off in shipping stocks after temporary employment contract American dock workers are stuck.
Fed governor says tapering in December should be ‘last step’
US Federal Reserve Governor Michelle Bowman said that the Fed December interest rate reduction was supposed to be his “last step in the policy recalibration phase.” This suggests that Bowman, who is a voting member of the Federal Open Market Committee, they may oppose further cuts this year. Other Fed officials who spoke this week were more optimistic about rate cuts.
Ubisoft explores ‘strategic and capitalistic opportunities’
French video game publisher Ubisoft said Thursday that he had been appointed “lead advisers” to viewing options “extract the best value for stakeholders.” Ubisoft’s founding family Guillemot and Tencent reportedly discussed the possibility in October taking over the company. With Ubisoft’s stock at a 10-year low, the company he faces questions about his future.
[PRO] Sweet spot for a jobs report
The US economy is in a delicate position between growth and inflation. The jobs report, released on Friday, shows the difficulty of this balancing act. Too hot, and Treasury yields could rise; too cold, and fears of an economic slowdown could stall stocks, Goldman Sachs said. But S&P 500 could gather if the report reaches the just the right range.
Conclusion
South Korea can’t catch a break. In the past month, the country has been placed under a state of emergency, the current — and replacement — president has been impeached, the second acting president (so far) and suffered a tragic plane crash.
How did these events affect the Korean market?
According to the Kospi index: not much. The index, which tracks all common stocks listed on the Korea Stock Exchange, is now higher than it was on Dec. 3, when impeached President Yoon Suk Yeol declared a state of emergency.
Its resilience can be traced to Korean political history and the swift — and perhaps fortuitous — actions of the Bank of Korea.
Yoon and Han Duck-soo are only the last two presidential figures to be impeached in Korean history. Before them, Roh Moo-hyun was impeached in 2004 (though overturned by a court), while Park Geun-hye was impeached in 2016 and removed from office the following year.
“Presidential impeachments are not unprecedented in Korea, and the country’s stocks, at least ultimately, did quite well during the last of 2016/2017,” Thomas Mathews, head of markets for Asia Pacific at Capital Economics, he said.
Uncertainties caused by Korea’s last two recalls “have subsided within three to six months,” Soohyung Lee, a member of the Bank of Korea’s Monetary Policy Committee, said. he told CNBC Jan. 2, so “it’s possible that the political turmoil may not take as much of a toll on the country’s economy.”
Actions by the Bank of Korea also appear to have calmed markets.
Within days of Yoon lifting the state of emergency, BOK announced urgent measures to calm the market and prevent volatility. Also, a a surprising rate cut of 25 basis points by the BOK at its November meeting, which was passed before Yoon declared a state of emergency in December, may have softened the blow.
Domestic factors may not be the biggest threat to the Korean economy and markets in the coming year. The negative risks imposed by US President-elect Donald Trump’s tariffs are more worrisome, especially for an export-oriented country like Korea, Lee said.
Korea’s recent troubles show that when one branch of government fails, other institutions can still support the country and its economy – but dealing with the governments of others is much more difficult.
— CNBC’s Lim Hui Jie and Lee Ying Shan contributed to this report.
