Kaohoon Morning Brief – 1 July 2022

1) FSS eyes for stronger economic outlook in 3Q22

Finansia Syrus Securities (FSS) expected the SET Index to move in sideways trends on Friday, but there is a possibility that the index could continue to be weaker after falling below the support level of 1,575-1,580 points due to concerns of rising inflation and aggressive rate hikes that would lead to a recession in the future.

FSS forecast SET Index to remain fluctuate in 3Q22, but expected the Thai economy should be strong due to its up trends.


2) Wall Street closes out its worst performance in first half in 50 years

Wall Street just closed its worst first half in 50 years as concerns of investors on inflation and recession weighed the market down, leading to a withdrawal from risk assets.

S&P 500 closed 0.88% lower on the last trading day of June 2022. The index fell 16% for the quarter and 20.6% for the first half of 2022.

Dow Jones fell 0.82% on Thursday, fell 11.3% in the second quarter and 15% for the half. Meanwhile, Nasdaq Composite dropped 1.33% yesterday, fell  22.4% in the quarter and 29.5% this year.


3) Sri Lanka and IMF fail to reach a bailout package

Sri Lanka is plunging into a much worse situation after failing to reach the deal with the International Monetary Fund (IMF).

However, the IMF said that the discussion for a bailout package will continue.

“The discussions will continue virtually with a view to reaching a staff-level agreement on the extended fund facility or EFF arrangement,” the IMF said.

Sri Lanka is facing its worst financial crisis since independence in 1948, which led the country to be struggling to pay for fuel while gradually defaulting on some foreign debt.


4) Economists are revising down US economic growth in 2Q

Morgan Stanley economists are now expecting the U.S. economic growth to expand only at a 0.3% annualized rate in Q2, down sharply from 2% just days ago as revised data showed that demand earlier in the year was weaker than previously thought. Meanwhile, home sales and manufacturing surveys are also showing signs of trouble.

Federal Reserve Bank of Atlanta’s GDPNow estimate for 2Q22 GDP was lowered to a 1% decline, compared with a 0.3% increase earlier this week.