Kaohoon Morning Brief – 30 January 2023

1) KSS expected fluctuating movement in SET Index amid 4Q22 earnings outlook and weakening crude oil prices

Krungsri Securities (KSS) expected Thailand’s SET Index to move within the 1,675 – 1,690 range, boosted by Fed’s smaller rate hike of 25 basis points in the meeting this week as PCE for December slowed down to 5%.

The analyst stated that 4Q22 earnings outlook and weakening crude oil prices could cause the index to fluctuate.


2) Recession remains investors main concerns, BofA says

The Bank of America revealed its January 2023 Credit Investor Survey, showing that recession remains the investor’s main concern, followed by Inflation and geopolitical risk.

From the survey, most respondents expected 2023 US earnings growth of -5 to -10% (47%) or 0 to -5% (33%).

Personal consumption expenditures excluding food and energy for the last month of 2022 increased 4.4% from a year ago, down from the 4.7% reading in November and also in line with the Dow Jones estimate. The increase in December was the slowest annual rate of increase since October 2021.

On a monthly basis, core PCE rose 0.3%, which was also in line with estimates.

Meanwhile, headline inflation rose 0.1% on a monthly basis and 5% from a year ago.


3) Eyes on central bank meetings

Investors will put more focus on the meeting of major central banks around the world to see their stance on inflation outlook.

The market is fully expected the U.S. Federal Reserve to increase rates by 25 basis points to 4.50-4.75% on Wednesday.

On Thursday, the Bank of England should hike interest rates by 50 bps to 4% as 13 of 42 analysts surveyed by Reuters only looked to 25 bps.

The European Central Bank is expected to raise rates by 50 basis points to 2.5% on the same day as BoE. Christine Lagarde, the President of ECB, noted earlier that the central bank will continue to increase rates to bring inflation to the target.