Kaohoon Morning Brief – 20 July 2022

1) FSS expects SET Index to bounce back following positive session in Wall Street

Finansia Syrus Securities (FSS) expected the SET to recover to trade with 1,540-1,550 points, in line with the easing sentiment after U.S. equity markets surged due to above-estimate 2Q22 earnings results. It supported funds to flow back into risk assets, particularly stocks and crypto. Also, they poured out of bonds, making it possible for bond yields to increase. However, the inverted yield curve persisted, reflecting concerns over inflation and short-term rate hikes. Also, the prospect of a recession in 2023 remains. Tomorrow, investors should keep a close eye on the ECB meeting. The market expects it to raise its policy rates for the first time in over a decade. It supports the euro to rise, while the BoJ should maintain its benchmark rates.

In Thailand, FSS still focused on banks’ 2Q22 earnings season. FSS anticipated the SET to recover after testing its crucial support at 1,520 points (+/-). The securities company recommended its investors hold their bets, waiting for recovery. Also, FSS focused on value plays with less demanding valuation than their pre-COVID period.


2) Netflix jumps 5.6% after fewer-than-expected subscribers loss

Netflix’s share price closed 5.61% higher at $201.63 per share after a better-than-expected performance from 2Q results. Netflix only lost approximately 970,000 subscribers in the second quarter of 2022, far fewer than what the company had forecast back in the first quarter for a loss of two million.

Earnings per share was $3.20 vs $2.97 expected by Refinitiv. Meanwhile, revenue was slightly lower at $7.97 billion vs $8.03 billion by Refinitiv.

The company revealed that it plans to release a lower-cost, ad-supported tier in early 2023.


3) Gas flows via Nord Stream 1 resume briefly

Gas flows via Nord Stream 1 to Europe resumed briefly on Tuesday after being closed earlier for its annual maintenance.

However, concerns are rising among European countries after Russian Gazprom sent out letters to its clients in Europe declaring a force majeure, excusing it from contractual obligations.

Some were speculating that the Russian government will take this opportunity to cut gas supply to the bloc.