Kaohoon Morning Brief – 22 September 2022

1) FSS expects weak market outlook after Fed’s tighter-for-longer monetary policy

Finansia Syrus Securities (FSS) stated that it expected the SET Index to extend its weakness to 1620 points (+/-) due to the bearish sentiment. Although the FOMC increased its policy rate by 0.75% yesterday, as expected, their view of a tighter-for-longer monetary policy, which would pressure the 2022-2023 economic growth to slow significantly, caused the Dollar Index to surge as a safe haven. Also, the 2Y U.S. bond yield soared to 4.08%, widening the inverted yield gap to -0.54%. It pressured risk assets and extended the sell-offs. However, FSS noted that it still believed that the Thai equity market would see a lower loss. Also, it would outperform its global peers due to its accelerating economic outlook, which breaks rank from other regions. Also, the SET should have a positive sentiment from tourism, which is about to see its high season in 4Q22. FSS said that it believed domestic and reopening plays would outperform the market. If the SET decreases to 1,600-1,610 points (+/-), it will provide an opportunity to accumulate mid-to-long-term bets.


2) Analysts are now seeing 4.50-4.75% terminal rate for Fed

After another 75bps rate hike by the U.S. Federal Reserve on Wednesday, analysts are now seeing a terminal rate of 4.50-4.75% by next year with another 75bp hike in November, followed by a 50 bp in December and another 25bp hike in February.

The Fed’s Chairman Jerome Powell said that the central bank is strongly resolved to bring inflation down to 2%, and will keep at it until the job is done.


3) China calls Russia and Ukraine to ceasefire through dialogue and consultation

China called for a ceasefire through dialogue and consultation for both Russia and Ukraine. The statement came after Russia’s President Valadimir Putin ordered a partial military mobilization on Wednesday and warned the West of potential consequences if they kept threatening Moscow with Nuclear weapons.


4) Meta cuts significant numbers of staff for cost reduction

The Wall Street Journal reported that Facebook’s parent, Meta, has begun cutting significant numbers of staff and reorganizing teams in an effort to cut costs through restructuring.

The Journal wrote that Meta apparently does not want to make it as layoffs, which led to the company quietly nudging out a significant number of staffers as it prepares for more significant cuts.