Kaohoon Morning Brief – 27 January 2023

1) KSS expected selloff in the stock market prior to the U.S. PCE announcement

Krungsri Securities (KSS) expected Thailand’s SET Index to move between 1,660 – 1,680 points. Even with a positive sentiment from a better-than-expected U.S. GDP in the fourth quarter rose 2.9%, which should ease concerns on recession fears, the analyst expected a weak outlook of Real Sector’s earnings in 4Q22 such as power generators and financial stocks. In addition, the analyst expected investors to pull out to lower the risk from U.S. PCE that will be released later today.


2) US GDP bear expectations in 4Q to rise 2.9%

The U.S. economy expanded faster than expected in the fourth quarter of 2022 as consumers in the world’s largest economy maintained a solid pace of spending.

In the fourth quarter, the U.S. economy grew at a 2.9% annualized rate, according to the data released by the Commerce Department on Thursday. The growth beat economists expectations by Reuters poll that forecast a 2.6% growth.

Even with rising spending in the fourth quarter, data showed that momentum had shifted to a snail pace by the end of the year amid higher interest rates that eroded consumers’ demand.

For 2022, the U.S. economy grew 2.1%, down from the 5.9% in 2021.


3) Oil prices rose on optimism of recovering demand

Oil prices increased more than 1% on Thursday in response to optimism in the market over positive U.S. economic data and China’s reopening that spurred hopes for investors that demand would recover.

The international benchmark Brent crude rose $1.35 or 1.6% to close at $87.47 a barrel. The U.S. West Texas Intermediate (WTI) rose $0.86 or 1.1% to settle at $81.01 per barrel.

Oil prices continued to edge slightly higher on Friday with Brent crude gained 0.22% to $87.66 and WTI rose 0.28% to $81.24 per barrel.