Kaohoon Morning Brief – 11 August 2022

1) FSS expects positive trading session after below-estimate U.S. inflation for July

Finansia Syrus Securities (FSS) expected the SET to move sideways-to-sideways up within 1,610-1,630 points after the below-estimate U.S. inflation for July (flat M-M, +8.5% Y-Y) signaled slower rate hikes in the future. It supported fund inflows into risk assets. Also, bond yields decreased.

In Thailand, the MPC’s in-line first policy rate hike of 0.25% after economic recovery supported banks in the mid-to-long run. The 2Q22 earnings season is about to end. So far, most reported in-line or below-estimate earnings results. They are in tandem with FSS’ view of a slight downward revision in 2H22.

Strategically, FSS still focused on stocks with a robust 2Q22 profit forecast and a consistently healthy outlook in 2H22. Also, FSS stated that it liked value and domestic plays that benefit from the domestic economic recovery. However, the SET’s swift and continued rallies to above 1,600+ narrow its upside compared to the target of 1,670 points. Hence, FSS recommended short-term profit-taking, particularly when international fund flows slow or when foreign investors go short to close their sizable long position on the Index Futures. Strategy: Bet on the 2Q22 earnings results and value plays. Sell some to take a profit at 1,600+ points.


2) US consumer price slows down in July

The Consumer Price Index (CPI) of the United States of America slowed down to 8.5% in July, beating economists forecast of 8.7% after hitting a fresh 40-year high of 9.1% in June.

Still, the annualized CPI remains around at its highest level in four decades.

Meanwhile, core CPI which excludes volatile food and energy prices remained at 5.9% on a yearly basis.

Investors are now speculating on the US central bank’s next move on its policy interest rate after a 75 basis point hike previously.


3) Disney reports better-than-expected results with subscription growth for Disney+

Disney posted better-than-expected results of its fiscal third quarter as earnings per share reached $1.09 per share, compared to 96 cents expected. Revenue was $21.5 billions vs. $20.96 billion expected. Meanwhile, the company reported growth in Disney+ subscriptions that rose to 152.1 million.