Kaohoon Morning Brief – 5 October 2022

1) FSS expects SET Index to test 1,590 resistance, following bullish U.S. equity markets

Finansia Syrus Securities (FSS) expected the SET Index to extend its recovery to test the 1,590 level (+/-), in line with the market sentiment. It remains bullish after U.S. equity markets still recovered sharply. The market feels more optimistic that the Fed might hike its policy rates in 2023 less than expected due to increased recession concerns. As a result, the U.S. bond yields and Dollar Index retreated. It supported funds to flow back into risk assets. Upstream energy should lead the market, in line with continued crude price surges. At the OPEC+ meeting today, the market expects a daily output cut of over one million barrels or two in November.

On the domestic front, there is no significant change in the market. The economy would recover and accelerate in 4Q22 since it is the high season for the tourism industry and spending. It would be a boon for domestic and reopening plays.

FSS recommended its investors hold their mid-to-long-term investments after accumulating more bets on weakness.


2) US stocks set for November midterm rally

The U.S. stocks could be building for a November run as data showed that since 1942, S&P 500 has never delivered a negative return from November midterm election year through April of the following year.

Average return for the market is roughly 17%, while the worst performance is 0.7% in 1946.

During the rate hike cycles in the 70s and 80s inflation, S&P 500 surged around 20% in this period of time.


3) Musk back on Twitter deal

Tesla CEO Elon Musk made a surprise u-turn to get back on the Twitter deal with its original offering price that he proposed months ago.

The reversal move came just weeks before the two sides were due in court.

The share price of Twitter 22.24% to close at THB52 per share on Tuesday.