Kaohoon Morning Brief – 15 November 2022

1) FSS expects bullish sentiment in SET Index after lower-than-expected U.S. PPI for October

Finansia Syrus Securities (FSS) expected the SET to move sideways-to-sideways-up within 1,623-1,640 points, supported by the bullish sentiment from the lower-than-expected U.S. PPI for October (+0.2% M-M, +8% Y-Y), in line with its CPI last week. As a result, the Dollar Index and the U.S. bond yields are still on their downward path, in line with the optimism that the Fed would slow down its rate hikes in the next three meetings.

Although the 3Q22 earnings were significantly lower than estimates, it was due to energy and petrochemical, while domestic and reopening plays recovered sharply. Hence, the market’s EPS should have a limited downside. Also, the market has looked past it to robust 4Q22-2023. Generally, FSS maintained its bullish view of the Thai economic outlook, the return of a current account surplus, and the rising Baht outlook, which supports mid-to-long-term fund inflows.


2) BofA says clients are selling energy stocks as sector remains cheap and underowned

The Bank of America says clients are selling energy stocks as the sector remains historically cheap.

The firm stated that clients were bigger buyers of stocks in cyclical sectors than defensive sectors, which was a reversal from the trend it had seen for the last two months.

The Bank of America’s tactical quant framework still favors energy (#1 sector for 17 consecutive months) and the sector remains historically cheap and underowned.


3) Amazon’s corporate and tech workforce are being laid off

Amazon began its layoff in corporate and tech workforce on Tuesday after it was widely reported that the company planned to cut about 10,000 jobs or 13% of its staff, mostly in retail, devices and human resources, including Alexa and the Luna cloud gaming unit, in an effort to reduce costs.

A mass hiring occurred during the early stage of Covid-19 outbreak after the company nearly doubled its workforce by the end of 2021 from 798,000 employees globally to 1.6 million.


4) US 3Q22 household debt soars at fastest pace since 2008

US household debt accelerated at the fastest annual pace since 2008 in the third quarter of 2022. Credit-card balances soared despite a multi-decade high of interest rates that lenders charge consumers.

According to the data released by the Federal Reserve Bank of New York, households added $351 billion in overall debt in the third quarter, representing an increase of 8.3% from the same period of last year, the fastest pace since a 9.1% rise in the first quarter of 2008. The figure reported on Tuesday had taken the total to $16.5 trillion.