Kaohoon Morning Brief – 9 March 2023

1) FSS expects a technical rebound in the SET Index after a series of decline

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in sideways direction with a crucial support level of 1,600 points, while there is a possibility for a technical rebound in the short-term after a series of decline in recent days. The analyst recommended selecting stocks with individual catalysts. For the mid and long-term investment, the analyst recommended accumulating stocks at the index point around 1,600 or lower.


2) Fed has no exit strategy for rate cycle until economy enters recession

The Fed Fund Futures now has a 53% probability of a 50 basis point rate hike in March by the Federal Reserve. Just a month ago, the chance for a 50bps rate hike was only 1% and the peak rates were expected at 5.25%.

The market is now expecting a 35% chance for the rate to go to 6.00% this summer.

TS Lombard Chief U.S. Economist Steven Blitz noted that the Fed could not estimate its rate ceiling until the economy entered a recession.

Meanwhile, Goldman Sachs raised its terminal rate target range forecast to 5.5-5.75% after Powell’s statement to the Congress, which is in line with the market consensus.


3) Private payrolls rose more than expected in February

Private payrolls in February increased by 242,000, compared to an estimate of 205,000 and above the 119,000 in January, according to the ADP National Employment Report on Wednesday.


4) Biden to tax more on riches while doubling capital gain tax for investors

The U.S. President Joe Biden is reportedly planning to unveil a series of major tax hikes on billionaires, investors, and those making above $400,000 a year as part of his administration’s aim to cut deficits by nearly $3 trillion over the next decade, according to Bloomberg.

The budget request reportedly called for a 25% minimum tax on billionaires and would nearly double the capital gains tax rate from 20% to 39.6%.