New York and Shanghai markets likely to fluctuate depending on U.S. government shutdown negotiations

This week, the New York stock market is expected to move depending on the outcome of the U.S. federal government shutdown (temporary work stoppage) negotiations. On the last trading day of last week (7th), New York markets recovered most of their losses on hopes the shutdown would be lifted. After Democratic floor leader Chuck Schumer proposed a compromise, major indices returned to flat territory, and the S&P 500 and the Dow closed higher.

The market expects this week to be a 'period of volatility.' Mark Malek, Chief Investment Officer (CIO) of Siebert Financial, said, "Currently it is a period with little major data, so there is a lack of momentum to push the market up," and "investors should focus on individual stock risk management rather than direction." Craig Johnson, senior technical analyst at Piper Sandler, also said, "Large-cap tech stocks are likely to enter a correction phase," and "it is necessary to reduce the proportion of stocks that have broken their support levels." If the shutdown is lifted, major economic indicators, including the October consumer price index (CPI) on the 13th, the producer price index (PPI) and retail sales on the 14th, will be released in succession. However, if the shutdown continues, the releases will be delayed.

In China, October new loan data will be released on the 11th. This is the monthly change in bank loan balances issued to households and businesses, and it is a key indicator for gauging credit flow and economic momentum. The market expects it to be around 500 billion yuan, lower than the previous month (1.29 trillion yuan). That would mean low credit demand from companies and households, showing that private-sector investment and consumer sentiment have weakened. Therefore, if the figure falls significantly short of expectations, concerns about China's economic slowdown could resurface along with yuan weakness. On the 14th, October industrial production and the unemployment rate will be made public. If the industrial production growth rate is high and the unemployment rate is low, it acts as a factor supporting yuan strength.

Reporter Hye-in Lee hey@hankyung.com