Recent economic updates: EU and US

Let's take a look at the recent economic statistics.

The EU PMI is still in a contractionary zone (below 50).

Due to the contractionary PMI, EU stocks are expected to decline in 2022.

The US Q3 GDP growth was 2.6% but the true economic conditions underlying the headline growth were bleak.  Why?

The Q3 GDP growth was propped up by net exports which contributed 2.77% to the overall growth.  This meant that the other 3 GDP factors (Government spending, Investment and consumption) contributed to a net growth of -0.17%.

GDP Growth = (G+I+C)+Net exports

2.6% = (-0.17) + 2.77

Thus, 3/4 of the economists projected an impending US recession in the foreseeable future.

As the US is still unable to contain its sky-high inflation, it will continue to raise its Fed rates.  The Fed terminal rate is projected to be at 5% in 2023 compared to the current rate of 3-3.25%.

Since the Fed rates will continue to climb, the US mortgage rates will also rise accordingly.  The recent 30-year mortgage rate had already breached the 7% mark.

Furthermore, the Fed will reduce its balance sheet by a few trillion which is considered an insidious rate hike.

Thus, the US outlook is indeed very bleak.

Baltic dry index - 1534

Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count (weekly) - 768

Related stock: Sembcorp Marine & Cosco.

MS Holdings - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
10/03/22	Lim & Tan	MS Holdings	0.06	0	Reject offer	Takeover price $0.07

MM2 Asia - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
06/07/21	UOB Kay Hian	MM2 Asia	0.068	0.095	Buy	Sum of parts
08/31/21	DBS Vickers	MM2 Asia	0.057	0.067	Buy	Sum of parts, PER10x FY22
02/14/22	UOB Kay Hian	MM2 Asia	0.05	0.115	Buy	Sum of parts
05/31/22	Lim & Tan	MM2 Asia	0.057	0.12	Buy
06/01/22	DBS Vickers	MM2 Asia	0.056	0.06	Hold	Sum of parts
06/10/22	UOB Kay Hian	MM2 Asia	0.056	0.115	Buy	Sum of parts
07/14/22	Lim & Tan	MM2 Asia	0.053	0.0875	Buy
09/26/22	Lim & Tan	MM2 Asia	0.048	0.09	Buy
10/13/22	UOB Kay Hian	MM2 Asia	0.042	0.098	Buy	Sum of parts

Micro-Mechanics - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
09/30/21	Lim & Tan	Micro-Mechanics	3.19	0	High-Risk
11/01/21	Lim & Tan	Micro-Mechanics	3.31	0	Hold
12/07/21	DBS Vickers	Micro-Mechanics	3.17	4.05	Buy
05/04/22	DBS Vickers	Micro-Mechanics	3.17	3.42	Hold	PER27x FY22
09/01/22	DBS Vickers	Micro-Mechanics	3.14	3.42	Hold
10/18/22	DBS Vickers	Micro-Mechanics	2.73	2.97	Hold

Stock calls for 28 october 2022

Date	Analyst	Company	Last	Target	Call	Valuation
10/28/22	DMG & Partners	AIMS AMP Cap Ind Reit	1.24	1.48	Buy	DDM
10/28/22	Kim Eng	Civmec	0.58	0.94	Buy
10/28/22	DBS Vickers	Far East Hospitality	0.58	0.7	Buy
10/28/22	UOB Kay Hian	First Resources	1.49	1.7	Buy
10/28/22	UOB Kay Hian	Ifast Corp	3.96	3.62	Hold	PER30x FY23
10/28/22	Citi Research	Ifast Corp	3.96	3.8	Sell
10/28/22	CIMB	Ifast Corp	3.96	3.8	Hold
10/28/22	UOB Kay Hian	Keppel Corp	6.65	10.11	Buy
10/28/22	DMG & Partners	Keppel Reit	0.92	1.15	Buy
10/28/22	Citi Research	Keppel Reit	0.92	1.42	Buy
10/28/22	DBS Vickers	Mapletree Commercial	1.92	2.3	Buy
10/28/22	OCBC	Mapletree Industrial	2.25	2.64	Buy
10/28/22	UOB Kay Hian	Sembcorp Marine	0.122	0.156	Buy
10/28/22	CIMB	Sembcorp Marine	0.122	0.19	Add
10/28/22	Citi Research	Sembcorp Marine	0.122	0.08	Sell
10/28/22	OCBC	Sembcorp Marine	0.122	0.12	Hold
10/28/22	DBS Vickers	Sheng Siong	1.61	1.76	Buy
10/28/22	DBS Vickers	Singtel	2.41	3.24	Buy
10/28/22	DBS Vickers	Starhill	0.515	0.68	Buy
10/28/22	DBS Vickers	UOB	26.02	34.2	Buy
10/28/22	OCBC	UOB	26.02	33	Buy
10/28/22	Lim & Tan	UOB	26.02	33.5	Accumulate