TISCO Center for Economic Analysis and Strategy expects the US Federal Reserve The meeting on the night of 26-27 Jan still signaled the direction of tightening monetary policy. dragging US stock prices Down as cheap as ’18 Pointed out as a spoon to buy shares of the Metaverse group into the portfolio. receive a variety of positive factors in the future
On January 26, 2022, Mr. Komsorn Prakobphon, Head of TISCO Center for Economic Analysis and Strategy, revealed that during the past week, the US stock index (S&P 500) has continued to decline. Because of concerns about the US Federal Reserve (Fed) preparing to raise the policy rate and move forward with tighter monetary policy The continuous decline makes the current share price (Valuation) interesting to start considering buying shares again.
And although the Fed has yet to officially announce its tight monetary policy move, But TISCO Center for Economic Analysis and Strategy expects The yield on the 10-year US Treasury Bond and the share price are likely to have already heard the news quite a lot.
It is expected that the forward price-to-earnings (Forward P/E) rate of the S&P 500 has a chance of a decrease of only 2 – 5% from the present due to factors that depress stock prices such as US Treasury yields. The rise from about 1.4% in December to 1.8% currently reflects a trend of very tight policy and limited opportunities for hikes. As interest rate futures markets reflect, the Fed is already raising interest rates to 2%.
“If the Fed meeting, which will take place on the night of January 26-27, signals a tightening of monetary policy, The TISCO Center for Economic Analysis and Strategy estimates the S&P 500 will drop to a forward P/E ratio of 18.5-19x, just 2-5x lower than its current level. The yield on 10-year government bonds (Bond Yield) may rise slightly to 2.0 – 2.1%, so the stock market’s valuation is now at an attractive level.
The spread between the S&P 500 yield minus the U.S. 10-year Treasury Yield Gap rose to 3.4%, close to the upper limit during 2018 as the Fed continued to shrink its balance sheet. (Quantitative Tightening or QT),” said Mr. Komsorn.
For the forecast of the results of the Fed meeting that will be held on the night of 26 – 27 January 2022 in Thailand time Most investors expect the Fed to signal three issues: 1. The Fed may signal four faster rate hikes this year; 2. The Fed will end its monetary policy easing (QE) in March. and 3. The Fed may identify ways to further downsize its balance sheet.
However, if the Fed signals a faster tightening of monetary policy, such as raising interest rates by 0.50% (50bps) from the usual 0.25% (25bps), or announcing the end of QE at this meeting. As the market started talking about It may cause the stock market to recede again. But not much compared to the current price level.
Mr. Nuttakrit Taweesup Senior Director of TISCO Wealth Investment Advisory TISCO Bank Public Company Limited (Mr. Nattakrit Laotaweesap, Head Of Wealth Advisory of TISCO Bank Public Company Limited) revealed that investors are advised to rely on the timing sent by the Fed. Signs of strict monetary policy Gradually buy shares in Metaverse theme (Metaverse)
The Metaverse theme stock is currently down 25-30% from its November 2021 peak, giving it a chance to profit from the upside, Bloomberg consensus analysts estimate. The market capitalization of Metaverse related businesses will soar from $180 billion in 2021 to $800 billion by 2024, representing a 3.4-fold growth over four years.
In addition, many of the larger stocks in the sector trade in the S&P 500 indices, such as Apple, Microsoft NVIDIA and Meta (Facebook), which are the new S-curve significant in future earnings. Let the company grow in the digital era that is emerging in the society according to the image of the megatrend of the world.
