[Morning Briefing] Trump "Will not remove US troops from Poland"…New York stocks strong as Alphabet soars

◆ Trump "Will not remove US troops from Poland…considering other countries"

President Donald Trump said he has no plan to withdraw or reduce US troops stationed in Poland, a NATO ally, but that he is considering that for other countries. At a meeting with Polish President Karol Nawrocki at the White House on the 3rd (local time), President Trump answered "Yes" when asked whether US troops would remain in Poland. He said, "If Poland wants, we will leave more troops," adding, "Poland has wanted more US troops for a long time." He said, "We have a very special relationship," and "We have never even considered the idea of removing (remove) troops from Poland. We are thinking about that with regard to other countries." The Trump administration is reviewing options to adjust global US troop deployments to match the changed security environment, and this comment is interpreted as reaffirming that stance. Therefore, it is possible that President Trump is considering complete withdrawal or reductions of US forces and related troop redeployments in other countries. In that context, South Korea, where about 28,500 US troops are stationed, will likely need to closely monitor the situation.

◆ New York stocks close mixed as Alphabet surge boosts tech stocks

The three major US stock indexes closed mixed. Technology stocks led gains after Alphabet shares jumped on news that Google does not need to sell its Chrome internet browser. On the 3rd (U.S. Eastern Time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed down 24.58 points (0.05%) at 45,271.23. The S&P 500 rose 32.72 points (0.51%) to 6,448.26, and the Nasdaq Composite gained 218.10 points (1.02%) to close at 21,497.73. A US federal court ruled after the market close that Google does not have to divest Chrome, one of its core businesses. The court found that Alphabet cannot enter into exclusive search contracts and must share search data with competitors, but does not need to divest. On that news, Alphabet surged more than 9%. It was the largest one-day gain since April 9, when the stock jumped 9.68% during a sharp market rebound.

◆ 'Fed chair candidate' Waller: "Expect several rate cuts over the coming months"

Christopher Waller, a current Fed governor considered among the candidates for Fed chair, said on the 3rd (local time) that the Fed should begin cutting rates at the upcoming monetary policy meeting this month and that he expects several rate cuts over the coming months. In an interview with CNBC on the day, Waller said, "When the labor market starts to deteriorate, it deteriorates very rapidly," and "Therefore we think it is necessary to begin cutting rates at the next meeting." The Fed will hold a Federal Open Market Committee (FOMC) meeting to set the policy rate on the 16th–17th. Waller noted that the current US policy rate of 4.25–4.50% is about 1.0–1.50 percentage points above neutral, so he believes multiple rate cuts will be needed over the coming months. The neutral rate refers to the real interest rate level that can maximize employment without increasing inflation. Waller said, "There is a chance we will see multiple rate cuts over the next 3–6 months," and added, "Whether rate cuts will be decided at every meeting depends on upcoming economic indicators."

◆ Ceasefire further away…Russia bombs Ukraine while Putin attends China’s Victory Day

While Russian President Vladimir Putin attended China's 80th Victory Day parade, Russia launched a massive airstrike across Ukraine that injured five people. Ukraine's air force said on the 3rd (local time) that of 502 drones launched by Russia, 430 were shot down or neutralized, and of 24 missiles, 21 were shot down or neutralized, but the remaining drones and missiles struck 14 locations. Reuters and AFP reported that regional authorities said residential homes and civilian infrastructure, mainly in central and western regions, were damaged by the strikes. Four railway workers in Znamianka, Kirovohrad Oblast, were injured and taken to hospital, and dozens of flights were delayed by up to seven hours. The attack took place while President Vladimir Putin stood alongside Chinese President Xi Jinping and North Korean leader Kim Jong Un at the 80th Victory Day parade in China, displaying an "anti-Western front."

◆ Last year 734 newborns born into wealth…received about 100 million won at birth

It was revealed that newborns last year inherited close to 100 million won on average. According to gift tax decision data submitted by the National Tax Service to Park Seong-hoon, a People Power Party member of the National Assembly's Planning and Finance Committee, there were a total of 734 gifts made to 0-year-olds last year, amounting to 67.1 billion won. That is an average of about 91.41 million won per person. Compared with the previous year (636 cases, 61.5 billion won), the number of gifts increased by 98 cases and the asset value increased by 5.6 billion won. The total gift value to 0-year-olds was about 9.1 billion won in 2020 but surged to 80.6 billion won in 2021 and 82.5 billion won in 2022 amid asset price rises during the COVID-19 period. In 2023 it fell to 61.5 billion won and then rose again last year. By asset type, gifts to 0-year-olds last year were led by financial assets at 554 cases and 39.0 billion won, an increase of 102 cases and 10.1 billion won from 2023 (452 cases, 28.9 billion won). The average gifted asset value per person was highest at age 16 at 147.19 million won, followed by age 17 (110.63 million won) and age 18 (110.11 million won).

◆ International gold hits record highs for third straight day as safe-haven demand continues

International gold prices continued their rally, setting record highs for the third consecutive trading day on the 3rd (local time). On the New York Mercantile Exchange, September delivery gold futures closed at $3,593.20 per ounce, up 1.2% from the previous close. With this rise, gold futures set record highs for three consecutive trading days on a front-month basis. Gold futures have surged 37% so far this year. Spot gold also broke its record high again. According to Reuters, spot gold was $3,576.59 per ounce as of 2:25 p.m. Eastern Time, up 1.2% from the previous close. Spot gold rose intraday to $3,578.50 per ounce, setting a new intraday record. Concerns about fiscal soundness in major advanced economies have increased volatility in global bond markets, and investment demand for gold, a representative safe-haven asset and inflation hedge, is contributing to the recent gold price rally.

◆ Scattered rain and showers…Gangwon central and southern east coast to get only around 5㎜

On Thursday the 4th, rain is expected mainly around the Seoul metropolitan area and Gangwon Province, and showers will fall in southern regions. The central regions will be mostly cloudy, while southern regions and Jeju Island will be mostly cloudy. According to the Korea Meteorological Administration, occasional rain is expected in Gangwon Province, the east coast of North Gyeongsang Province, and the northeastern mountains of North Gyeongsang. The Seoul metropolitan area and northern Chungcheong Province will see occasional rain until daytime, and from morning to evening showers are expected in southern Chungcheong, Chungcheong Province, southern regions except the east coast of North Gyeongsang, and Jeju Island. Expected precipitation amounts are: Seoul metropolitan area 10–60㎜, northern Chungcheong west coast 5–60㎜, inland and mountains of Gangwon 5–40㎜, Gangwon's northern east coast and inland northern Chungcheong and northern Chungcheong, southern Chungcheong west coast, east coast and northeastern mountains of North Gyeongsang 5–20㎜, Ulleungdo and Dokdo around 5㎜. The severely drought-stricken central and southern east coast of Gangwon Province is forecast to receive only around 5㎜ of light rain. Daytime high temperatures will range from 25 to 33 degrees, higher than usual. In southern regions, the maximum perceived temperature will rise to around 33 degrees, making it very hot. Tropical nights may occur on the west and south coasts and Jeju Island. Fine dust levels nationwide are expected to be "Good" due to smooth atmospheric dispersion and the influence of precipitation.

Cha Eun-ji, Hankyung.com reporter chachacha@hankyung.com