Hi all, welcome to this week’s Fresh Off The Oven (FOTO) newsletter where we talk everything about economies and markets around the world. This is for the week of 5 August – 9 August.

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Markets Fresh from the Oven

Malaysia (FBMKLCI): The Malaysian market is flat again for the week at 1,596 points with several colliding forces.

United States (S&P500): The US markets were steady for the week as initial jobless claims fell, softening some of the recession fears.

China (HSCEI): Up. The Chinese markets are up with the Hang Seng China Enterprise Index (HSCEI) rising by 0.7% for the week to close at 6,018 points.

Slicing the Economic Pie

This week, we focus on the economic news in Malaysia in anticipation of the release of gross domestic product later on. We also explore the implications of imports and inflation numbers for China.

Malaysia: The news is in. And it’s good for Malaysia. Industrial production growth has risen to 5.0% in June 2024 from 2.4% in May 2024, and this beat expectations of 4.7% in the market.

China: Consumption in China in recent months and years have kept everyone wide awake at night. You see, it’s trying to transition to a consumption-based economy because … well, it has the biggest population in the world (well, India has just recently overtaken but you get my point).

Pie in the Sky?

This week, we turn to the shores of the US and China to look at companies that have outperformed.

The US

Axon Enterprise: Share price rose by a whopping 25% for the week, and it doesn’t seem to be slowing down.

Expedia: Whowsies, Expedia’s share price went up by 12.6% for the week. Expedia is an online travel company that you can use to book your flights, accommodation and many other tourism-related activities.

Eli Lily: Share price grew by 10.2% for the week, culminating in an increased interest in the pharmaceutical company famous for their diabetic medications.

China

Li Auto: Li Auto’s share price rose by 5.4% for the week as its energy vehicle delivery reached a record high of 51,000 in July 2024.

JD Health: Not to be confused with JD.com. JD Health is the healthcare unit of JD.com and provides digital health services and resources. Share price rose by 4.1% for the week

Trip.com: Another tourism-related company on the cards here in China (after Expedia in the US). The share price for Trip.com rose by 4.4% for the week.

Digging the Bottom of the Barrel

On the same shores of the US and China, we want to highlight a few companies trading at low valuations.

The US

United Airlines Holdings: This is an airline company mainly operating in North America. United Airlines (UA) is currently trading at a price-to-earnings (PE) ratio of 4.5 times.

General Motors: General Motors (GM) makes and sells cars. It is now trading at a PE ratio of 4.4 times compared to the historical average of 8.5 times and is way below the US automobile manufacturer’s average of 54.4 times.

China

China Citic Bank: CCB is a commercial bank with operations mainly in China. It is now trading at a PE ratio of 4.8 times compared to its historical average of 4.4 times. Its peers meanwhile, are trading at 5.8 times.