Kaohoon Morning Brief – 17 October 2022

1) FSS expects volatility in the market after US inflation, recommending investors to keep an eye on 3Q22 earnings season

Finansia Syrus Securities (FSS) expected the SET to move sideways to test its support at 1,556 points (+/-) after foreign equity markets’ volatile response to the U.S. inflation for September. Since it extended its gradual decrease and remained substantially above the Fed’s target, the consensus increased the prospect of aggressive policy rate increases. It supported U.S. 10-year bond yield to surge past 4% and the Dollar Index to extend its strength. They pressured risk assets and triggered funds outflows. In Thailand, the market still lacks fresh catalysts. The spotlight is on the 3Q22 earnings season, which will start with banks this week, followed by the preview of the real sector.

Although they are generally unexciting since the rainy season is a low season, FSS maintained its bullish view of domestic and reopening plays in 4Q22 when tourism and spending resumes their high season. Also, the economy should accelerate in 2023. It would diverge from the West, which risks a recession.


2) People take to street in Paris to protest against soaring prices

Thousands of angry protesters took the streets in Paris on Sunday to call out the government on soaring costs of living amid the ongoing refinery workers strike.

The law enforcement confronted the protesters with teargas canisters and batons.

This year’s Nobel Prize winner for Literature, Annie Ernaux, also attended the protest along with the leader of hard-left party La France Insoumise (France Unbowed), Jean-Luc Melenchon.

There are also protests in Paris calling the country to withdraw from being a member of the North Atlantic Treaty Organization (NATO) as well.


3) JPMorgan CEO expects more controversial events in UK

JPMorgan CEO Jamie Dimon stated that investors should expect more negative events after a crash in U.K. government bonds last month from the mini-budget controversy nearly caused the collapse of hundreds of that country’s pension funds if the Bank of England had not stepped in.

The CEO said that markets will continue to be volatile so long as the U.S. Federal Reserve is hiking rates and tightening its massive balance sheet.