The baht opened at 33.42 to the US dollar on Wednesday, weakening from Tuesday’s closing rate of 33.37.
The Thai currency is likely to move between 33.40 and 33.50 to the greenback during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the baht is likely to fluctuate as investors are in a cautious state because the dollar strengthened in the short term before the US Federal Reserve’s meeting.
Poon said that the market will be back in a risk-on state which will cause the dollar to go down if the result from the meeting is the same as the market expected or the Fed send a signal to increase the interest rate lower than the market expected.
Moreover, the gold price might go up which will cause the baht to strengthen if the Fed does not hasten to use the monetary policy as the market expected and the dollar weakens.
Poon said that the baht is likely to swing sideways or weaken before the Fed meeting but might strengthen after the meeting.
Poon said that the baht resistance level would be at 33.70 to the dollar while the support level might be at 33.30 which is the level that some investors will help the baht to not strengthen quickly unless foreign investors decide to invest more in the baht.
Krungsri Securities forecast the Stock Exchange of Thailand (SET) Index on Wednesday (December 15) would fluctuate between 1,620-1,640 points.
It said investors would delay their investment to follow the outcome of the US Federal Reserve’s meeting on quantitative easing tapering as the Producer Price Index in November has risen by 9.6 per cent year on year.
“Meanwhile, negative news of the first Omicron death would pressure the index,” Krungsri Securities said.
It also recommended buying of the following companies’ shares as an investment strategy: ▪︎ HMPRO, GLOBAL, DOHOME, CPN, CRC, SYNEX and COM7, which would benefit from the Cabinet’s move to launch additional economic stimulus measures. ▪︎ AWC, BANPU and HANA, which would be listed in SET50 Index. ▪︎ BLA, BPP, EPG, KEX, RCL, SIRI, STARK and TTA, which would be listed in SET100 Index. ▪︎ RCL, LEO, III, WICE, SONIC and JWD, which benefit from rising freight rate.
As the Federal Reserve gets ready to wrap up its final meeting of the year, another report showing inflation running hot sank some of the most-expensive pockets of the stock market.
Revered by investors during the pandemic for their solid balance-sheets, technology giants dragged down equities on Tuesday. Sentiment soured on concern that a jump in both producer and consumer prices will put pressure on the Fed to act more aggressively. While officials have given no signals they would rush to tighten policy, a hasty shift is seen as the biggest downside risk for stocks in 2022, according to an informal Bloomberg News survey of fund managers.
The S&P 500 dropped for a second day, with financial companies posting the only gain among 11 major industries. Treasury two-year yields topped 0.65%, while the U.S. dollar rose. Oil and gold retreated.
Comments:
–“Anytime there’s a risk of easy money being taken away, that will result in some of these very expensive areas of the market to pull back,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.
–“The pressure on the Fed to pick up the pace of tightening is only mounting. With higher prices permeating the marketplace, we could see a snowball effect when it comes to inflation challenges as more suppliers justify higher prices and more consumers begin to close their wallets,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.
–“The inflation trajectory remains worrisome. While we believe that price pressures will abate next year, the Fed is doing the prudent thing by tapering faster, so that it is well-positioned to hike rates if needed,” said Win Thin, global head of currency strategy at Brown Brothers Harriman.
A Goldman Sachs Group Inc. basket of the 50 most-shorted stocks has plummeted back into a bear market for the first time since June, ringing up gains for traders who sell shares they’d borrowed in hopes of buying them back at lower prices. The renewed selloff in the more speculative corners of the market adds more evidence of a waning appetite to take risks as a new variant of the coronavirus spreads and the Fed zeroes in on fighting inflation.
Corporate highlights:
–Elon Musk made more headway toward his pledge to sell 10% of his Tesla Inc. stake, and it may have cost the carmaker its $1 trillion valuation.
–Boeing Co. received 109 gross orders for 737 Max airliners last month, bringing its sales tally for the narrow-body jets to 692 this year, according to the planemaker’s website.
–3M Co. agreed to separate its food-safety business and join it with Neogen Corp. in a deal that would value the combined company at about $9.3 billion.
Here are some key events this week:
–China releases November industrial output, retail sales data, Wednesday.
–Fed rate decision, Wednesday.
–U.S. business inventories, retail sales, empire manufacturing, Wednesday.
The Stock Exchange of Thailand (SET) Index closed at 1,630.64 on Tuesday, up 4.81 points or 0.30 per cent. Transactions totalled 69.16 billion baht with an index high of 1,630.93 and a low of 1,616.51.
The index rose for the second consecutive day after rising by 7.60 points or 0.47 per cent on Monday.
The 10 stocks with the highest trade value today were KBANK, JAS, IVL, SCB, DELTA, EA, PTT, PTTGC, SCC and CPF.
Other Asian indices were on the fall:
Japan’s Nikkei Index closed at 28,432.64, down 207.85 points or 0.73 per cent.
China’s Shanghai SE Composite closed at 3,661.53, down 19.56 points or 0.53 per cent, while the Shenzhen SE Component closed at 15,136.78, down 75.71 points or 0.50 per cent.
Hong Kong’s Hang Seng Index closed at 23,635.95, down 318.63 points or 1.33 per cent.
South Korea’s KOSPI Index closed at 2,987.95, down 13.71 points or 0.46 per cent.
Taiwan’s TAIEX Index closed at 17,599.37, down 168.23 points or 0.95 per cent.
The baht opened at 33.39 to the US dollar on Tuesday, unchanged from Monday’s closing rate.
baht
The Thai currency is likely to move between 33.35 and 33.45 to the greenback during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the market is in a risk-off state which will cause the dollar to strengthen in the short term. Foreign investors are also not investing in Thai assets.
However, Poon believed that the booster dose of vaccines will reduce the spread of the Omicron variant of Covid-19 which will help foreign investors to hold Thai assets which will cause the baht to swing sideways in short term. He said the baht is also likely to strengthen if the result of the US Federal Meeting on Thursday is the same as the market expected.
Poon said that the baht is likely to strengthen as it was not weakened past the level of 34 to the dollar because it strengthen recently. The baht is likely to strengthen as exporters might sell the dollar at the end of the year.
Poon said that the baht support level might be from 33.30 to 33.40 to the dollar which is the level that some investors will help the baht to not strengthen quickly unless foreign investors decide to invest more in the baht.
The price of gold on Tuesday morning was unchanged from Monday’s close.
AGold Traders Association report at 9.23am said the buying price of a gold bar was THB28,200 per baht weight and selling price THB28,300, while the buying and selling price of gold ornaments is THB27,697.32 and THB28,800, respectively.
The spot gold price on Tuesday morning hovered around US$1,789 (THB59,788) per ounce after Comex gold at close on Monday rose by $3.5 to $1,788.3 per ounce due to support from the fall in US government bond yields and from buying gold as a safe-haven asset amid concerns over the Omicron Covid-19 virus.
Krungsri Securities forecast the Stock Exchange of Thailand (SET) Index on Tuesday (December 14) would fluctuate between 1,615-1,635 points.
It said negative news of the first Omicron death and investors’ move to delay investment to follow the US Federal Reserve’s decision on its quantitative easing programme would pressure the index.
“However, mass buy-ups of stocks which gained specific positive sentiment would help boost the index,” Krungsri Securities said.
It also recommended buying of the following companies’ shares as an investment strategy: ▪︎ HMPRO, GLOBAL, DOHOME, CPN, CRC, SYNEX and COM7, which would benefit from the Cabinet’s move to launch additional economic stimulus measures. ▪︎ AWC, BANPU and HANA, which would be listed in SET50 Index. ▪︎ BLA, BPP, EPG, KEX, RCL, SIRI, STARK and TTA, which would be listed in SET100 Index. ▪︎ RCL, LEO, III, WICE, SONIC and JWD, which benefit from rising freight rate.
Saudi Arabias energy minister warned traders against shorting oil prices, saying OPEC+ could react quickly to any fall in prices.
OPEC+, a 23-nation group led by Saudi Arabia and Russia, decided on Dec. 2 to raise daily oil output by 400,000 barrels in January. But it kept the meeting open and said it would be able to reconvene at short notice to change course.
“I call my friends every day, we chat and share notes,” Prince Abdulaziz bin Salman said in Riyadh, referring to fellow OPEC+ ministers. “So the meeting is truly not suspended. It continues to be in session.”
That strategy has helped bolster crude prices by making traders warier of taking short positions, according to analysts.
While oil’s soared about 45% this year with economies rebounding from the worst of the coronavirus pandemic, it slumped more than 10% on Nov. 26, the day after Thanksgiving. That was mainly due to the discovery of the omicron variant.
Brent crude has since recovered some of its losses, trading around $75 barrel on Monday.
“Thanksgiving was a Thanksgiving day for the speculators,” the minister said. “But let them dare to do another Thanksgiving. They will be ouching like hell.”
Markets around the globe prepared for a wave of central bank decisions, with traders weighing the potential impacts of less generous monetary settings amid coronavirus challenges and lofty equity valuations.
The S&P 500 dropped from a record, while the technology-heavy Nasdaq 100 underperformed major stock benchmarks. A gauge of megacap companies slumped, with electric-vehicle maker Tesla down about 4.5%. Apple fell after the iPhone maker approached a $3 trillion market value. Travel shares such as airlines, cruise operators and hotels sank. Bonds and the dollar climbed. A selloff in Bitcoin pushed the world’s largest cryptocurrency closer to a key technical level.
About 20 central banks are due to hold meetings this week, with the Federal Reserve seen winding down bond purchases and signaling an interest-rate liftoff in 2022 — heralding a historic pivot to counter the fastest inflation since the 1980s. The European Central Bank, the Bank of England and the Bank of Japan are also set to announce their monetary policy decisions.
The ghost of the tech bubble could soon come back to haunt investors as hefty valuations may be threatened by the likely tightening of monetary policy. The S&P 500’s long-term price-to-earnings ratio — which compares the current price with the 10-year average real earnings per share — has reached 37, a level last seen in 2000.
“Valuations are extremely high on almost any metric,” Deutsche Bank strategists said in a note.
Inflation expectations among U.S. consumers rose to a new high of 6% for the coming year, according to the latest consumer survey of the Federal Reserve Bank of New York. The study showed that Americans foresee faster price increases for items like rent and food, which take up a big chunk of household spending and can’t easily be substituted.
Some of the main moves in markets:
Stocks
–The S&P 500 fell 0.5% as of 3:15 p.m. New York time
–The Nasdaq 100 fell 0.8%
–The Dow Jones Industrial Average fell 0.6%
–The MSCI World index fell 0.5%
Currencies
–The Bloomberg Dollar Spot Index rose 0.3%
–The euro fell 0.2% to $1.1290
–The British pound fell 0.4% to $1.3220
–The Japanese yen was little changed at 113.54 per dollar
Bonds
–The yield on 10-year Treasuries declined six basis points to 1.42%
–Germany’s 10-year yield declined four basis points to -0.38%
–Britain’s 10-year yield declined four basis points to 0.70%
Commodities
–West Texas Intermediate crude fell 0.4% to $71.38 a barrel
Chinas efforts to build a thriving market for secondhand vehicles, pretty much from zero, are slowly starting to deliver results, including in the electric car segment.
Sales of pre-owned vehicles jumped by 30% in the first ten months of this year and are expected to reach 17 million units in 2021, according to the China Automobile Dealer Association, or CADA.
Trading in secondhand electric or hybrid models rose to 47,000 units last year, the organization’s data shows. While that’s still relatively small, it’s almost double the volume in 2017 and is expected to grow rapidly as China’s electric fleet begins to mature.
You could see – and actually feel – that rising level of interest in the pre-owned sector at CADA’s packed conference earlier this month in Haikou, a city with typically tropical temperatures on the southern Hainan Island. Event organizers were forced to continually boost the air conditioning as delegates crowded into sessions, including seminars focused on the valuation of used electrics.
Even with more than 270 million vehicles in circulation, China has long lagged behind developed markets on used-car trading. Annual sales of secondhand models are just over half the volume of vehicles fresh off the production line. That’s a huge difference from countries like the U.S. and Germany, where purchases of pre-owned cars can typically be double those of new automobiles.
There have typically been two major reasons for the disparity. China’s car market is still developing, and a 2019 McKinsey study showed that only 173 in every 1,000 people owned a vehicle, compared to 837 in the U.S. There’s also previously been a cultural factor too, with the purchase of a new car seen as a visible indicator of social status.
Those barriers are fast falling away. Consumers increasingly see the sense in spending less on a good quality, well performing secondhand vehicle that’s typically only a few years old, while some buyers favor the environmental benefits of extending the use of an existing model.
Authorities are spurring the market’s development. Beijing has cut taxes on used-car dealers, and this year removed obstacles around selling a vehicle outside the city in which it is registered.
At its Haikou conference, CADA launched tools to help dealers accurately value secondhand electric models. More than two-thirds of those being traded have been used for less than three years and the most popular price bracket is between $15,720 (100,000 yuan) and $24,000 (150,000 yuan), according to the organization’s data.
Li Auto’s lineup of extended range electric vehicles retained the most value after a year, and can recoup almost 80% of the original sticker prices, Pan Lei, an official with Beijing Jingzhengu, a company specializing in appraisals for the used car industry, told the conference. Nio models ranked second, retaining about 77% of value, with Tesla cars third at around 74%.
Tesla’s Model 3 and Xpeng’s P7 are the most popular used-car choices among mid-sized vehicles, while the budget SAIC-GM-Wuling’s Hongguang Mini is also holding value. The four-seater minicar, that usually sells for the equivalent of $5,000, is fetching almost 83% of its original price after 12 months, Jingzhengu data shows.
Those high valuations are enough to persuade Tony Xie, a Haikou resident who’s thinking about swapping his gas-powered black Toyota Camry for a zero-emissions vehicle, that used electric models are well worth considering. “The used car price shows how good and sound a car is,” Xie said.
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