Kaohoon Morning Brief – 7 December 2022

1) FSS says economic slowdown and recession risk will pressure the market until end of 2023

Finansia Syrus Securities (FSS) expected the SET Index to remain on its downward path, in line with global equity markets. It should move within 1,620-1,635 points. Besides the market concerns over the Fed’s rate hike, the economic slowdown and recession risk will pressure the market from now until the end of 2023. The CEO of several U.S. corporations and banks had expressed concerns. Also, some may need to lay off some employees. Oil, especially upstream, should continue to weigh on the market in line with crude prices, which tumbled for the second day to US$74.25 a barrel due to demand concerns. However, it would be a boon for anti-commodity, such as power, building materials, and petrochemical, owing to decreased costs. On the  local front, investors should monitor the inflation for November. The market expects the headline and core at +5.86% Y-Y and +3.2% Y-Y, respectively. If they are lower than expected, it will support the sentiment, particularly for domestic and consumption plays.


2) JPMorgan CEO says inflation will erode consumer spending power

JPMorgan CEO Jamie Dimon said in an interview with CNBC that inflation will erode consumer spending power, stating that the elevated consumer spending of 2022 will not last much longer. He reiterated the risk posed by continuous rate hikes by the U.S. Federal Reserves to slow down inflation.

Nevertheless, he noted that the U.S. economy is the strongest in the world today.


3) China is seeing some decline in Covid cases and government aims to ease protocol

China reported 4,351 local symptomatic cases and 20,764 asymptomatic cases for December 6, a sharp decline from two weeks ago.

Earlier, Chinese state media CCTV issued another authoritative interpretation, saying some Covid-19 patients can be treated at home.


4) Philippines’ Ferdinand Marcos Jr. believes the country is on track to strong performance

The Philippines’ inflation rate soared further to a 14-year high in November 2022 at 8%, rising from 7.7% in October 2022 and 3.7% in November 2021.

President Ferdinand Marcos Jr. on Tuesday admitted that inflation is running rampant and out of control, but he believed that his country is on track to maintain a strong economic performance.