Kaohoon Morning Brief – 14 December 2022

1) FSS expects more relaxation in equity market after slowing down US CPI and weakened Dollar Index

Finansia Syrus Securities (FSS) expected the SET Index to move sideways-up within 1,620-1,635 points. The sentiment is more relaxed after U.S. CPI for November was lower than expected. As a result, bond yields tumbled. Also, the Dollar Index weakened to reflect the fund outflows from the U.S. dollar to other assets. Energy, particularly upstream and midstream, should support the market in line with the sharp crude price recoveries of 3%. Technology may recover due to optimism that the Fed will slow its rate increases from December 2022 to March 2023. In the future, the focus should move to an economic slowdown next year, a crucial risk. Asia still has a catalyst from the easing restrictions in China.

On the local front, the main driver remains domestic consumption recovery. In particular, Thailand will hold its general election early next year. Also, tourist arrivals are recovering. They should help offset exports, which risk a slowdown due to the global economy. FSS stated that it focused on investing in domestic and consumption plays.


2) US inflation for November came in slower-than-expected at 7.1%

The consumer price index for November increased 0.1% on a monthly basis while slowing down to 7.1% on a yearly basis. After excluding the volatile energy and food prices, the U.S. core CPI increased 0.2% last month and 6.0% from last year.

According to the Labor Department, gasoline prices dropped 2.0% after rising 4.0% in October, while the cost of natural gas and prices for electricity also fell. However, food prices rose 0.5% after a 0.6% increase in October, driven by rises in prices of fruits and vegetables, cereals and nonalcoholic beverages. On the other hand, prices for meat, fish and eggs fell last month.


3) Morgan Stanley upgrades forecast for China’s economy in 2023

Morgan Stanley upgraded its forecast for China’s economy in 2023 in a report published on Wednesday.

“We lift our already above-consensus GDP growth forecast to 5.4%,” strategists and economists said in the paper. The company had previously predicted 5% growth for next year.

“We had previously expected a rebound in activity to materialize from late 2Q23. Now we are projecting mobility to improve from early March,” it said.