Kaohoon Morning Brief – 16 June 2022

1) FSS expects SET Index to rebound after pricing in Fed’s rate hike

Finansia Syrus Securities (FSS) expected SET Index to bounce back in today’s session to around 1,610-1,615 points, following short-term positive sentiment in the market after investors had priced in the Fed’s rate hike to suppress rising inflation while giving a target at 2%. The Fed also signaled for another 50-70bp hike in July.

The analyst recommended “speculate” for investors that had exposure to rate hike “speculate” and advised investors to invest in value and defensive stocks related to essential products and services as well as tourism stocks for short and long-term investment.


2) Fed hikes rate by 75bp and cuts economic growth to 1.7%

The Federal Reserve on Wednesday raised its benchmark interest rates by 75 basis point, the most since 1994, in an attempt to bring down surging inflation. The policy rate is now at a range of 1.5%-1.75%.

The chairman noted that although he sees a 50-70 basis point increase in the meeting in July, decisions will be made meeting by meeting.

According to the dot plot of individual members’ expectations on the Fed funds rate, the U.S. central bank’s benchmark rate will finish 2022 at 3.4%, an upward revision of 1.5 percentage points from the March estimate.

The Fed also significantly cut its outlook for 2022 economic growth to 1.7%, down from 2.8% from the March outlook.


3) Bitcoin was down 10% yesterday and nearly lost the grip to hold above $20,000

Bitcoin was close to drop below $20,000 level on Wednesday after falling as much as 10% to $20,166 intraday. The world’s largest trading cryptocurrency is currently trading at $22,428.

Global digital currencies are on a downfall as of late in fear of the central bank’s aggressive rate hike and liquidity issues at a key player in the crypto space.


4) US retail sales unexpectedly fell in May

U.S. retail sales unexpectedly fell in May, dropping 0.3% last month compared to 0.1% forecast to increase and adjusted 0.7% expansion in April. 

New York Fed Manufacturing contracted 1.2, compared to a forecast of 2.3 increase and a 11.60 contraction in the previous month.

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged in May.