Unexpected 'Speed Adjustment' by Trump... Securities Firms Say 'No Need to React Emotionally'
- Securities firms recommend focusing on stocks with policy momentum rather than reacting emotionally, following President Trump's indication of 'speed adjustment' in tariff imposition.
- It is expected that the strong dollar trend will be adjusted as President Trump maintains a somewhat moderate tariff policy post-inauguration.
- Experts recommend an investment strategy centered on domestic K-specialized companies that are difficult to replace within the U.S.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Post-Inauguration Market Volatility Expands
Relief Over Statement "Universal Tariffs Not Ready Yet"
Won-Dollar Exchange Rate Hits 1,430 Won in a Month
"Respond with Policy Momentum and K-Specialized Companies"
After Donald Trump was inaugurated as President of the United States on the 20th (local time), domestic stock markets have seen mixed results across sectors, causing investor anxiety. Securities firms recommend focusing on stocks with policy momentum (upward momentum) rather than reacting emotionally, as President Trump has indicated a 'speed adjustment' in implementing existing pledges like tariff imposition, contrary to expectations.
"Universal Tariffs Not Ready Yet"
According to the Korea Exchange on the 25th, since Trump's inauguration, the KOSPI has risen by 0.74% and the KOSDAQ by 0.36%. Although these are lower than the 2.02% rise in the U.S. S&P 500 index and the 2.62% rise in Japan's Nikkei 225 index during the same period, they show an upward trend along with major global indices, unlike last year when they were sidelined.
Securities firms interpret the domestic stock market's rise post-Trump's inauguration as driven by expectations of a speed adjustment in the application of universal tariffs on the first trading day after his inauguration.
On his first day in office, President Trump stated, "I am considering imposing a 25% tariff on Mexico and Canada starting next month," but also mentioned, "Universal tariffs are not ready yet."
The market has been watching closely to see if the high tariff policy would be included, as Trump had declared during his campaign that he would sign over 100 executive orders on his first day in office. Particularly for us, with major stocks composed of export companies, Trump's tariff policy was of great concern. However, as Trump hinted at adjusting the speed of tariff imposition, the market seems to have temporarily relaxed.
On Wall Street, there is a prevailing view that President Trump will initially take a moderate approach. Morgan Stanley commented on Trump's inaugural address, saying, "No broad and immediate tariff imposition was announced," and while there is a possibility of tariffs on Mexico and Canada, the impact of tariff policy changes is likely to appear later this year.
Goldman Sachs analyzed that the tariff policy-related part of Trump's inaugural address was "more moderate than expected," noting that Trump's remarks on China were noticeably less aggressive and the risk of universal tariffs had decreased more than anticipated.
Investment analysis firm Wolf Research stated, "It may take longer than expected for Trump's tariffs to actually be applied," and "there are no specific details on tariffs at this time."
Respond with Policy Momentum and K-Specialized Companies
However, as President Trump has ordered a review of the abolition of electric vehicle subsidies promoted by the previous Biden administration and seems to be attempting to abolish the 'green energy' policy itself, stocks related to secondary batteries and eco-friendly energy have plummeted in the domestic market.
Jo Yeon-joo, a researcher at NH Investment & Securities, said, "The executive orders signed by President Trump over two days since his inauguration include 26 orders, 12 memos, and 4 proclamations, most of which are domestic policies, and foreign policies are still just words." She added, "He expressed 'consideration' for imposing tariffs on Mexico and Canada, and did not sign for imposing a 60% high tariff on China or a 10-20% universal tariff."
Ahn Hoi-soo, a researcher at DB Financial Investment, also stated, "It is fundamentally impossible to repeal a legislated bill or speak contrary to it through an executive order," adding, "It should be seen as the president, as the head of the executive branch, ordering the prioritization of executive work." He continued, "The judiciary (federal court, Supreme Court) can prohibit the implementation of executive orders, or the legislature can propose a bill to nullify an executive order."
Regarding secondary batteries, he particularly noted, "The 'Inflation Reduction Act' (IRA) was enacted, and detailed requirements for its implementation have been specified and announced by the IRS and the Treasury Department," adding, "While subsidy details and the definition of Foreign Entity of Concern (FEOC) may become stricter as they continue to be updated, the complete repeal and nullification of the act is impossible."
The won-dollar exchange rate has also fallen for five consecutive trading days, reaching the 1,430 won level in about a month.
Lee Min-hyuk, an economist at KB Kookmin Bank, said, "Initially, President Trump declared a 10% additional tariff on China, a 25% tariff on Mexico and Canada, and a 10-20% universal tariff on all imported goods worldwide," adding, "However, as radical tariff imposition ultimately burdens the overall economy, including rising U.S. inflation, President Trump is expected to adjust the pace of tariff increases, leading to an adjustment in the strong dollar trend."
Experts recommend focusing on domestic companies that are difficult to replace within the U.S. and have policy momentum from the Trump administration.
Park Yoon-chul, a researcher at iM Securities, said, "Finance (regulatory easing), defense (geopolitical conflict), and nuclear power (energy security) were favorable themes for President Trump in the previous term, and the returns were also favorable," citing cryptocurrency, finance, energy, infrastructure, and defense as sectors with policy momentum.
Yeom Seung-hwan, director of the retail business division at LS Securities, added, "As President Trump has already mentioned, the shipbuilding and memory semiconductor industries are essential for domestic companies as the U.S. cannot replace them alone," adding, "There are also opportunities in transformers, solar power, and electric vehicle batteries, where the U.S. lacks self-supply."
Noh Jung-dong, Hankyung.com journalist dong2@hankyung.com

Korea Economic Daily

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