Group 1: Macroeconomic Outlook - The U.S. economy is expected to show resilience supported by fiscal expansion, but this may lead to higher inflation and interest rates, complicating the Federal Reserve's policy stance [1][2] - China's economy faces both challenges and opportunities due to evolving tariff dynamics, with a projected GDP growth of 5% for the year and a potential decline in the GDP deflator index to -1% [1][2] - The economic environment is characterized by strong supply but weak demand, leading to price pressures [1][2] Group 2: Fiscal and Monetary Policy - Fiscal policy is anticipated to shift from acceleration to strengthening, with an expected increase in fiscal tools by 500-1,000 billion yuan to support local finances [2][3] - Monetary policy will maintain a "moderately loose" stance, with potential interest rate cuts and reserve requirement ratio reductions to support economic growth [2][3] Group 3: Capital Market Dynamics - The domestic capital market is expected to see a gradual decline in bond yields, while A-shares may stabilize but lack upward momentum [3] - The international market is likely to continue the trend of de-dollarization, with U.S. equities expected to experience volatility [3] Group 4: Economic Predictions - China's GDP growth is forecasted to remain at 5.0% for 2025, with nominal GDP growth projected at 4.0% [4] - Key economic indicators such as retail sales and fixed asset investment are expected to show varied growth rates, with retail sales projected to grow by 4.8% [4] Group 5: Asset Allocation Strategy - Recommendations for asset allocation suggest a focus on A-shares, particularly in consumer and cyclical sectors, while advising against exposure to U.S. equities [5] - Fixed income strategies favor Chinese government bonds, while U.S. dollar-denominated assets are recommended for low allocation [5] Group 6: U.S.-China Trade Relations - The U.S.-China tariff situation has seen a significant reduction, with current tariffs approximately 41% compared to pre-trade war levels [7][8] - Future negotiations may lead to further tariff reductions, but risks of tariff increases remain [12][14] Group 7: U.S. Macroeconomic Conditions - The U.S. economy is experiencing steady growth despite high inflation concerns, with GDP growth projected to be stable [17][18] - Fiscal policies are shifting towards expansion, with a potential fiscal deficit rate above 6% [30] Group 8: De-dollarization Trends - The trend of de-dollarization is gaining attention, with a notable decline in the dollar's share in global reserves from 73% to 58% since 2001 [90] - Factors contributing to this trend include increased competition from non-U.S. currencies and the impact of U.S. financial sanctions [90]

Economic Overview - The internal momentum of the US economy is weakening, with the Atlanta Fed's GDPNOW model predicting a 0.4 percentage point decline in Q2 real GDP growth to 3.4% [2] - Personal consumption expenditure (PCE) growth has decreased by 0.6 percentage points to 1.9%, primarily due to a slowdown in the services sector [2] - Private investment growth (excluding inventory) has dropped by 0.8 percentage points to 0.4%, with significant contractions in real estate (-4.4%) and construction (-3.4%) [2] - The job market remains stable, with weekly initial jobless claims falling by 0.3 thousand to 245 thousand, aligning with seasonal levels [2] - The worsening situation in the Middle East is increasing inflationary pressures, as indicated by the Truflation daily inflation index rising by 8 basis points to 2.14% [2] Fiscal and Monetary Policy - Fiscal policy remains expansionary, with a weekly fiscal surplus of $18.5 billion, which is weaker than seasonal levels but stronger than historical averages [3] - The Federal Reserve maintained a wait-and-see stance during the June meeting, with the dot plot indicating that 7 out of 18 members do not expect rate cuts this year [3] Market Performance - Overseas markets showed muted performance last week, with the US dollar slightly rebounding and US Treasury yields fluctuating [4] - The US stock market was nearly flat, up 0.1%, with expectations that the most significant tariff impacts have passed, potentially leading to a renewed upward trend driven by corporate earnings resilience [4] - However, high valuations and increased tariffs may limit upward potential [4] - The strategy suggests maintaining a neutral position on US stocks with a balanced allocation [4] Chinese Economic Conditions - Domestic demand shows mixed signals, with strong automotive consumption but a slowdown in real estate transactions [6] - In June, average daily retail sales of passenger cars reached 48,000 units, a 17% year-on-year increase [7] - Real estate sales are declining, with new home transaction volumes in 30 major cities dropping by 8.6% year-on-year [7] - The land market is also cooling, with land supply and transaction volumes decreasing [7] External Demand and Trade - High-frequency data indicates a potential slowdown in China's export growth in June, with port cargo and container throughput growth rates declining [8] - Exports to the US may have seen some recovery, while exports to non-US regions are expected to decline from previous highs [8] Fiscal Performance - In May, fiscal revenue growth slowed, with public budget revenue increasing by only 0.1% year-on-year [9] - Tax revenue growth decreased to 0.6%, while non-tax revenue turned negative for the first time in 2024 [9] - Government spending growth was also slower, with a 2.6% increase year-on-year [9] Market Strategy - The bond market is showing strength, with short-term rates performing well due to a stable funding environment [10] - The A-share market experienced a slight decline, with uncertainties in corporate earnings and the need for further policy support for real estate and consumption [12] - The Hong Kong stock market is facing risks of correction, with high valuations and unstable fundamentals [12]

Core Viewpoint - The bond market has shown a strong performance recently, with various fixed-income products experiencing growth in returns, particularly those with embedded options [2][3][11]. Summary by Sections Fixed Income Product Performance - In the past month, the bond market experienced fluctuations, with rates generally declining. Various stable products saw an increase in net value, especially option-embedded fixed income products, followed by medium- and long-term bond funds [3][9]. - As of June 18, the monthly returns for different products were as follows: option-embedded bond funds at 0.54% (previously 0.62%), medium-term bond funds at 0.31% (previously 0.13%), short-term bond funds at 0.18% (previously 0.19%), high-grade interbank certificates of deposit index funds at 0.15% (previously 0.18%), and cash management products at 0.11% (unchanged) [3][10]. Bond Market Review - The bond market showed a pattern of weakness followed by strength, influenced by market sentiment and liquidity conditions. The tightening of liquidity in late May, combined with the U.S.-China trade meeting in early June, initially suppressed bond market performance. However, after the month transitioned, the central bank's supportive stance on liquidity led to a recovery [11][12]. - The one-year AAA interbank certificate of deposit rate fell to approximately 1.65%, a slight decrease from the previous month, indicating a shift towards a more favorable liquidity environment [12][15]. Market Outlook - In the short term, the bond market is expected to maintain a low-interest, low-volatility trend, with the 10-year government bond yield projected to fluctuate between 1.5% and 1.8%, centered around 1.7% [31][34]. - Credit bonds are anticipated to outperform interest rate bonds, with credit spreads likely to remain relatively low, minimizing the risk of significant widening [34]. Asset Management Industry Trends - The scale of wealth management products increased to 31.3 trillion yuan by the end of May, reflecting a 1.6% month-on-month growth. This growth is attributed to the decline in bank deposit rates, which has made wealth management products more attractive [36]. - On May 23, the National Financial Regulatory Administration released a draft for asset management product information disclosure, allowing for more flexible performance benchmark disclosures, which may influence investor behavior in the long term [36]. Investment Strategy Recommendations - For investors needing liquidity management, maintaining cash-like products and considering stable low-volatility wealth management or short-term bond funds is advisable [39]. - For conservative investors, holding pure bond products with a potential extension of duration is recommended, especially as the 10-year government bond yield approaches 1.7%-1.8% [40]. - For more advanced conservative investors, continuing to hold fixed-income plus products is suggested, with a focus on incorporating convertible bonds and equity assets into the strategy [41].

Economic Overview - The economic outlook has slightly deteriorated, with growth rate forecasts down by 0.3 percentage points and unemployment rate up by 0.1 percentage points compared to March predictions [2] - The PCE and core PCE inflation forecasts have been raised by 0.3 percentage points, with tariffs expected to push prices higher this year [2] Policy Insights - The dot plot indicates a "bimodal distribution" within the Federal Reserve, with one faction focused on the impact of tariffs on prices and another concerned about the economic growth implications [4] - Seven officials predict no rate cuts in 2025, while two expect only one cut this year, and eight anticipate two cuts [4] - Powell emphasized the uncertainty in the economic outlook and stated that no official can make a clear prediction on interest rate movements under current conditions [3][4] Market Strategy - The market reacted moderately to the Fed's meeting, with a neutral trading return at the close [5] - The OIS curve suggests a 48 basis point reduction in rates by 2025, approximately two cuts [5] - U.S. Treasury yields showed minimal changes, with the 2-year yield at 3.94%, 5-year at 3.99%, 10-year at 4.39%, and 30-year at 4.89% [5] - The dollar index increased by 0.06% to 98.878, with the offshore RMB exchange rate stabilizing around 7.19 [6] - The S&P 500, Nasdaq, and Dow Jones indices showed little movement, indicating a cautious market sentiment [7] - The 10-year yield above 4.5% and 5-year yield above 4.1% are seen as suitable entry points, with potential for a technical rebound in the dollar providing selling opportunities [7]

Core Viewpoint - The article discusses the impact of the recent US-China tariff changes on China's exports and economic growth, emphasizing the need for proactive fiscal policies to mitigate these effects and support local governments [6][8][12]. Group 1: Tariff Impact and Economic Growth - The current round of US tariffs on China is broader, faster, and higher than during the 2018 trade war, with an average tariff rate of approximately 41.2% [6][7]. - It is estimated that by 2025, China's exports to the US may decline by about 19.2%, resulting in a potential reduction of 720 billion in export scale, with overall export growth being dragged down by 1.1-2.0 percentage points [8][10]. - The high dependency of certain industries on US exports may lead to significant impacts on production investment and profits, further affecting consumer demand and employment [8][10]. Group 2: Fiscal Policy Adjustments - The total fiscal space for 2025 is projected to reach 41.6 trillion, a significant increase of 2.5 trillion from the previous year, marking the highest level in history [14][16]. - The target deficit rate for 2025 is set to exceed 4.0%, indicating a proactive fiscal stance [18][20]. - The budget revenue targets are conservative, with a growth target of only 0.1%, reflecting ongoing economic pressures [21][22]. Group 3: Budgetary and Debt Management - The budgetary expenditures are expected to grow significantly, with a combined growth rate of 9.2% for general public budgets and government fund budgets [26][28]. - Government bonds are identified as the primary source of fiscal revenue, with net financing expected to expand by nearly one-third compared to the previous year [26][28]. - The budget outside the fiscal framework is anticipated to open further, potentially reaching 7.8 trillion, which would account for 5.5% of nominal GDP [34][36]. Group 4: Local Government Financial Pressure - Local governments are facing significant financial pressures, with increasing reliance on central government transfers, which are expected to reach 11.6 trillion in 2025 [52][56]. - The overall debt burden for local governments is rising, with the debt ratio projected to reach 165.7% in 2024 [52][56]. - The article highlights the need for local governments to optimize spending and focus on essential services while managing debt repayment [57][60]. Group 5: Central Government Support - The central government is expected to increase its fiscal support, with a focus on enhancing local government capabilities and addressing debt issues [63][65]. - The issuance of special bonds and long-term bonds is set to increase, aimed at supporting investment and consumption [63][65]. - The central government's leverage capacity remains substantial compared to other major economies, allowing for further fiscal maneuvering [65][67].

Core Viewpoint - China is leveraging its advantages in the drone industry to establish a leading position in the low-altitude economy, focusing on the commercialization of application scenarios, particularly in logistics and transportation [1][2]. Group 1: Low-altitude Economy Development - The low-altitude economy is advancing towards electrification, intelligence, and connectivity, aiming to bypass Western technological barriers and establish standards and regulations [5][10]. - The current scale of China's low-altitude economy has exceeded 500 billion yuan, with a growth rate of 33.8%, and is expected to surpass one trillion yuan in the next three years [2][12]. - The commercialization of low-altitude economic application scenarios is progressing in phases, with consumer markets maturing and sectors like agricultural protection and industrial inspection entering commercial operations [1][12]. Group 2: Low-altitude Logistics Market - The low-altitude logistics market is projected to grow rapidly, reaching approximately 330.5 billion yuan in 2024 and potentially becoming a trillion-yuan market within five years [2][18]. - The penetration of drones in the last-mile delivery market has completed the "0 to 1" process, with expectations for large drones in trunk and branch logistics to follow [2][17]. - The demand for drones from logistics companies like SF Express and Meituan is expected to drive investment in the drone manufacturing and component sectors, reshaping the competitive landscape [2][46]. Group 3: Commercialization Pathways - The commercialization of low-altitude logistics will occur in two phases: expanding city and route coverage, followed by increasing flight density [25][37]. - The average delivery time for drone logistics is significantly reduced compared to traditional methods, with potential cost savings as drone usage scales up [27][31]. - The integration of drones into logistics is expected to enhance efficiency and reduce costs, making low-altitude logistics one of the most promising application scenarios [26][36]. Group 4: Industry Collaboration and Future Outlook - Major logistics companies are collaborating with startups to lead the development of the drone logistics industry, with significant procurement orders expected to reshape the competitive landscape [46][47]. - The future investment in the low-altitude logistics sector is anticipated to exceed 500 billion yuan, driven by the demand for drone procurement and operational infrastructure [43][44]. - The rapid growth of the express delivery and instant delivery markets presents substantial opportunities for drone logistics, with significant room for penetration in both sectors [38][39].

美国经济保持稳步扩张态势，美联储年内降息预期维持在2次（约50bp），降息终点预期维持在3.5%。 亚特兰大联储GDPNOW模型预测二季度美国实际GDP年化增速稳定在3.8%，投资扩张继续减速，长端利率上 行的紧缩效应再度显现。个人消费（PCE）增速稳定在2.5%，商品（3.0%）与服务（2.2%）同步扩张；私人 投资（不含库存）增速降至1.1%，主要来自地产（-1.6%）及建筑（-3.3%）分项的拖累。 失业率趋势企稳。周频首次申领失业金人数稳定在24.8万，结束了一轮上行趋势，符合季节性水平。通胀再起 波澜，中东局势恶化推升油价，Truflation日频通胀指数上行22bp至2.06%。 海外策略：美元延续弱势行情 财政保持扩张立场。周频财政赤字额达到$407亿，继续超出季节性水平。2025财年美国赤字水平将继续处于高 位。 基于"双目标"及经济、财政形势推演，美联储并无大幅调整政策的动机，维持年内降息不超2次（50bp）判 断，甚至可能不降息。 上周影响海外市场走势的逻辑有两条：一是美国通胀数据低于预期，市场交易偏鸽。二是伊以冲突升级，避险 情绪升温。在此背景下，美债、黄金表现较好，美元跌至年内最低，人 ...

Core Viewpoint - The economic data for May indicates a mixed performance, with supply-side growth remaining strong while demand-side indicators show signs of slowing down, particularly in investment and real estate sectors [1][5]. Supply Side: Strong Support - In May, the industrial added value for large-scale enterprises grew by 5.8% year-on-year, slightly above the market expectation of 5.7% [6]. - The manufacturing sector saw a marginal slowdown, with high-tech industries maintaining robust growth rates of 8.6% [6]. - The service sector production index increased by 6.2%, driven by recovering consumer demand and increased holiday travel [9]. Fixed Asset Investment: Real Estate Drag - Fixed asset investment grew by 3.7% year-on-year, below the expected 4.1%, with infrastructure and manufacturing growth rates declining [10]. - Real estate investment saw a significant decline of 10.7%, indicating ongoing challenges in the property market [10][14]. - The construction sector is under pressure due to local government debt and slow issuance of special bonds for projects [10][11]. Consumption: Accelerating Beyond Expectations - Social retail sales increased by 6.4%, significantly higher than the market expectation of 4.8%, with both goods and catering consumption reaching new highs for the year [19]. - The increase in consumption is attributed to policy effects, pre-scheduled shopping festivals, and high demand for electronics and home appliances [19][22]. Outlook: Stabilizing with Localized Pressure - The impact of tariff changes on the economy is expected to weaken, with the second quarter growth likely to exceed earlier market expectations [24]. - However, persistent low prices may continue to erode corporate profits and delay improvements in consumer expectations [24].

Group 1 - The article discusses the increasing uncertainty in global economic policies and the challenges investors face in wealth growth, particularly in the context of low interest rates in China and high volatility in equity assets [1][4] - It introduces two classic asset allocation models: the Permanent Portfolio and the All Weather Portfolio, which aim to create low-volatility investment strategies that can withstand economic cycles [1][4] - Historical data from 1971 to 2024 shows that both models have achieved annualized returns of 8-9% in the US market, with the Permanent Portfolio yielding 8.4% and the All Weather Portfolio yielding 8.7% [10][11] Group 2 - The long-term effectiveness of these models is attributed to three main reasons: economic growth and monetary expansion leading to positive returns on underlying assets, low correlation among assets reducing portfolio volatility, and diversification and rebalancing enhancing compound returns [2][19] - The article emphasizes that the long-term returns of various asset classes are generally positive, with equities outperforming other assets, which is crucial for the portfolio's ability to exceed nominal GDP growth [2][20][22] Group 3 - The article details the asset allocation ratios for both models, explaining that there is no optimal allocation ratio as it depends on individual risk preferences and return objectives [3][55] - It highlights the importance of understanding the long-term returns and volatility of underlying assets, as well as their correlations, to make informed allocation decisions [56][57] Group 4 - The article analyzes the performance of the Permanent and All Weather Portfolios in the US market, showing that both portfolios have lower volatility compared to individual asset classes while achieving returns close to equities [14][18] - It provides a detailed examination of the historical performance of these portfolios, including their maximum drawdowns and annual returns over the years [10][11][12]

Core Viewpoint - The article discusses the inflation trends in May, highlighting a slight decrease in CPI and a more significant drop in PPI, with implications for future economic conditions and policy responses [1][10]. Group 1: CPI Inflation - May CPI inflation was reported at -0.1% year-on-year, matching the previous value and exceeding market expectations of -0.2% [1][2]. - Energy prices have significantly dragged down CPI inflation, while core CPI showed slight upward support [2][6]. - Food prices experienced a mild decline, with a 0.2% drop month-on-month, which is less than the average decline of 1.4% over the past five years [5]. - Core CPI inflation rose slightly by 0.1 percentage points to 0.6% year-on-year, although month-on-month momentum has weakened [6][7]. - Service prices remained resilient, with travel prices increasing by 0.8% month-on-month, surpassing the five-year average of 0.2% [6]. Group 2: PPI Inflation - May PPI inflation was reported at -3.3% year-on-year, a decrease of 0.6 percentage points from the previous month, and -0.4% month-on-month, which is weaker than the historical average since 2017 [10][12]. - The decline in PPI is attributed to weak oil prices affecting the entire industrial chain and a slowdown in the construction sector due to adverse weather conditions [10][12]. - Despite the overall decline, there are signs of recovery in prices related to exports and new growth sectors, with textile prices narrowing their decline and some electronic prices turning positive [12][15]. Group 3: Forward Outlook - Looking ahead, energy prices are expected to remain weak, with Brent crude oil projected to fluctuate between $60 and $70 [9]. - The overall pace of CPI recovery is anticipated to be slow, influenced by policies aimed at boosting domestic demand and consumption [16]. - For the second quarter, CPI inflation is expected to stabilize around 0%, while PPI inflation may drop to approximately -3.0% [16].