On the 13th, the balance of CMA was recorded at 84 trillion 249.6 billion won, marking an all-time high due to uncertainties surrounding the Fed’s interest rate cuts and a wait-and-see sentiment. Attention is focused on whether the market expectations for the U.S. April CPI will be met, with expectations that if it aligns with forecasts, easing sentiments will calm down and lead the KOSPI towards 2800.
According to Finance Investment Association on the 15th, the total assets managed by Comprehensive Management Accounts (CMA) as of the 13th were 84 trillion 249.6 billion won. It surpassed the previous all-time high of 83 trillion 841.1 billion won recorded on the 7th, setting a new record just 6 days later. This is the highest figure since the related statistics were compiled in 2006. In just this month, it has increased by more than 2 trillion won, showing a rapid upward trend.
CMA is a financial product where securities firms receive deposits from investors to invest in financial products such as commercial paper, government bonds, and certificates of deposit to generate profits. With the uncertainties surrounding the Fed’s interest rate cuts in the U.S., funds that have not found suitable investment destinations are being funneled into waiting positions. The fact that leading domestic stock market items such as semiconductors have been trading sideways, coupled with robust economic indicators in the U.S. undermining expectations for interest rate cuts in the first half of the year, are factors contributing to investors’ wait-and-see attitude.
As a result, there is a high possibility that the direction of idle funds will be determined by the release of the U.S. April CPI results on the night of the 15th (Korean time). Depending on the CPI results, the path of the Fed’s interest rate cuts could change. The U.S. Labor Department’s release of the U.S. April Producer Price Index (PPI) earlier showed a 0.5% increase from the previous month, surpassing the market expectations of 0.3%, indicating persistent inflationary pressures.
The key factor lies in how closely the April CPI aligns with market expectations. The Wall Street Journal estimated that the U.S. April CPI could increase by 0.4% from the previous month and 3.4% from the previous year, a deceleration compared to the 3.5% annual increase in March. If the April CPI meets market expectations, it is expected to be a positive catalyst for the stock market even though it would indicate a slowdown in inflation.
Analysts suggest that if the April CPI is in line with expectations, it may revive expectations for disinflation, stabilize market interest rates, and lead the KOSPI towards the 2800 level. However, there are also concerns that even if the April CPI meets market expectations, it could act as a negative factor in the market. This means there is a high possibility that it could shake the expectations for interest rate cuts, especially considering the negative impact of the March CPI on the market sentiment.