Kaohoon Morning Brief – 29 June 2022

1) FSS expects SET Index to edge lower amid negative sentiment in the market

Finansia Syrus Securities (FSS) expected the SET Index to decline to 1,585-1,590 points due to the negativity in the market after the plummet in Wall Street last night amid returning concerns of recession as inflation expectations 12-month forward was at 8%. Meanwhile, the Fed would continue moving forward to raise interest rates.

The analyst noted that 3Q22 would be the period to monitor if the inflation has reached its peak or not.


2) US Confidence Data in June drops to lowest in more than a year

The U.S. Confidence Data in June dropped to the lowest level since February 2021 as expectations continue to decline amid fears of recession while the central bank is trying to slow down surging inflation with aggressive rate hikes.

The reading came in at 98.7 vs 100.4 expected and also down from 103.2 in May.

The Conference Board said that 12-month inflation expectations for its consumer confidence survey were at 8% for June, marking the highest level tracing bank to August 1987.


3) Morgan Stanley says the bear market level is not over

Morgan Stanley stated that the bear market level was not over, but said that it might feel like it was over the next few weeks as markets take lower rates as a sign the Fed can orchestrate a soft landing while also preventing a meaningful revision to earnings forecasts.

Strategists believed a retracement of 38-50% of the entire decline in the S&P 500 would not be out of line with prior bear market rallies, partially ones associated with a recession at the end.