Kaohoon Morning Brief – 13 December 2022

1) FSS says market remains optimistic even after US PPI for Nov. was higher-than-expected

Finansia Syrus Securities (FSS) expected the SET to move sideways-to-sideways-up within 1,618-1,630 points. Although there was pressure late last week from the higher-than-expected U.S. PPI for November, the market remains optimistic. It keeps a close eye on U.S. CPI for November tonight for a continuously declining outlook, which would convince the Fed to make a smaller rate hike of 0.50% at a meeting this week, the last of this year. Also, crude prices recovered. They should support energy recoveries after sharp falls last week. In China, the market has a catalyst from the easing lockdown restrictions, which should help the Chinese economy recover next year. On the local front, the market still lacks fresh catalysts. Hence, it would continue to pay attention to Thailand’s accelerating economy. In particular, consumption and tourism recover well. They should outperform exports, which risk a global recession next year. FSS maintained its focus on investing in domestic and consumption plays.


2) Goldman Sachs expects three additional 25bps rate hikes in 2023

Goldman Sachs stated that it continued to expect three additional rate hikes in 2023, bringing the U.S. Federal Reserve’s terminal rate to the range of 5-5.25%, up by half a percentage point from its last projection.

In his latest comment, Fed’s chairman Jerome Powell insisted on the plan to hold rates at a high level for some time to ensure that inflation has been brought down completely.


3) JPMorgan reduces recommended stocks allocation amid weak economic outlook until end of 1Q23

JPMorgan’s strategist downgraded its recommendation on equity allocation as the firm saw downside risk for the stock market between now and the end of the first quarter of 2023 due to a soft economic outlook.

The firm downgraded stocks from “overweight” to “moderate underweight” and also trimmed its risk exposure in commodities, while increasing its allocation to corporate bonds and cash.


4) Oil prices rise amid concerns over outage of Keystone pipeline

Oil prices edged higher as investors assessed supply risks from the ongoing Keystone outage and China’s slowly relaxing Covid measures.

The potential that the outage in TC Energy Corp’s Keystone crude oil pipeline could drag on more than expected helped fuel oil prices since late last week.

Brent and West Texas Intermediate closed up about $2 a barrel on Monday, while gaining around $1 on Tuesday morning of Asian trading hours.