"Shutdown lift imminent" U.S. stocks surge…Will there be an 'additional rate cut' in December? [Morning Briefing]

◆ 'Shutdown lift' optimism boosts New York stocks

Major U.S. stock indices closed higher. On the 10th local time, the Dow Jones index rose 0.81% from the previous close to 47,368.63, the S&P 500 index climbed 1.54% to 6,832.43, and the Nasdaq index also jumped 2.27% to 23,527.17. Palantir, which had fallen amid talk of an 'AI bubble,' surged nearly 9%, and AI- and semiconductor-related stocks broadly recovered. With the year-end shopping season approaching from Thanksgiving to Christmas, optimism that the federal government's shutdown (temporary work stoppage) being lifted is imminent — meaning local travel demand and future consumption would not suffer major shocks and could improve — was reflected in the market.

◆ U.S. central bank divided over an additional rate cut in December

Within the U.S. central bank (Fed), opinions are split over the need for an additional rate cut. After cutting rates twice this year by 0.25% each to 3.75–4.00%, the question is whether there will be another cut in December. St. Louis Federal Reserve President Alberto Musalem expressed skepticism about an additional rate cut, while San Francisco Federal Reserve President Mary Daly called for a more flexible approach. Steve Myron, a Fed governor appointed by President Trump, reiterated a demand for a 0.5% point cut next month, saying, "Additional easing is essential because inflation is falling rapidly and the labor market is weakening," and financial markets are increasingly pricing in a higher likelihood of a December cut.

◆ 'Bull market' pushes the five largest groups' market cap up…Concentration in large caps

As the KOSPI remained strong, a concentration of large-cap stocks accounting for more than half of the total market capitalization became apparent. Leaders Index analyzed the market caps of 368 listed companies belonging to conglomerates subject to disclosure and found that total market capitalization rose from 1,661.7387 trillion won at the start of the year (January 2) to 3,030.5177 trillion won as of the 3rd of this month, an increase of 82.4%, and the share held by the top five groups by market cap — Samsung, SK, Hyundai Motor, LG, and HD Hyundai — also rose from 45.9% to 52.2%, an increase of 6.3 percentage points. In particular, supported by the semiconductor supercycle mood, Samsung Electronics and SK Hynix stock prices surged, with the combined market cap share of Samsung and SK groups approaching 40% of the entire market, and Hyundai Motor climbed from fourth to third in market cap, swapping places with LG.

◆ People Power Party to visit prosecution, justice ministry to protest 'giving up Daejang-dong appeal'

The People Power Party plans to visit the Supreme Prosecutors' Office and the Ministry of Justice today (11th) to protest the prosecution's decision to forgo an appeal in the Daejang-dong case. They are reportedly planning to demand the resignation of Justice Minister Jeong Seong-ho, accusing him of exerting outside pressure. Jang Dong-hyeok, leader of the People Power Party, sharply criticized, saying yesterday, "If it was reported up to (Lee Jae-myung) the president and tolerated, it is grounds for impeachment," and, "No one would believe that the justice minister was completely unaware of or uninvolved in blocking such an appeal." The party also held a caucus to discuss follow-up measures at the party level, including pushing for a standing special prosecutor.

◆ Below-freezing cold on the commute…Large day-night temperature differences

On Tuesday, some regions will see temperatures drop to below freezing, making for a chilly morning commute. With added wind, the felt temperature will be even lower, and the diurnal temperature range will widen to around 15 degrees, so take care of your health. Skies will be occasionally cloudy and gradually clear in the afternoon, with daytime temperatures of 13–18°C, and fine dust concentrations nationwide are forecast to be at 'good' or 'normal' levels.

Bonggu Kim, Hankyung.com reporter kbk9@hankyung.com