Group 1: Major Asset Classes & Overseas Events & Data - Equity assets have risen across the board, while gold prices have significantly corrected. The S&P 500 increased by 1.9%, and the Nasdaq index rose by 2.3% [1][3] - The 10-year U.S. Treasury yield remained flat at 4.02%, while the dollar index rebounded by 0.4% to 98.9. Offshore RMB slightly appreciated to 7.13 [1][3] - WTI crude oil surged by 6.9% to $61.5 per barrel, while COMEX gold plummeted by 3.1% to $4104.2 per ounce [1][33] Group 2: U.S. Economic Indicators - The U.S. September CPI was weaker than market expectations, with the core CPI rising only 0.2% month-on-month, below the expected 0.3%. Employment remains a key concern for future Fed rate cuts [1][65][66] - The Markit manufacturing and services PMIs for October rose to 52.2 and 55.2, respectively, indicating stronger performance compared to Europe, Japan, and the UK [1][76] Group 3: Trade Relations and Tariffs - The U.S. has initiated a 301 investigation into the Phase One trade agreement with China, examining compliance with the agreement [1][48] - A meeting between U.S. President Trump and Chinese officials is scheduled for October 30 in South Korea [1][48] Group 4: U.S. Fiscal Deficit - As of October 23, the cumulative fiscal deficit for the U.S. in 2025 reached $1.38 trillion, with total expenditures at $6.59 trillion and total tax revenues at $4.16 trillion [1][51] Group 5: Federal Reserve Outlook - The market anticipates two rate cuts by the Fed in 2025 and three in 2026, influenced by the weaker-than-expected CPI data [1][60] - The upcoming Fed meeting on October 29 is being closely monitored for potential rate changes [1][60] Group 6: Commodity Prices - Most commodity prices have increased, with WTI crude oil up by 6.9% and Brent crude by 7.6%. However, precious metals like gold and silver have seen declines of 3.1% and 4.4%, respectively [1][33][39]

Core Viewpoint - The article discusses the review of the "14th Five-Year Plan" and the prospects for the "15th Five-Year Plan," emphasizing the importance of high-quality development, institutional reform, and industrial transformation as key themes for the upcoming planning period [9][10]. Deep Dive Topics - The "15th Five-Year Plan" period is seen as a critical phase for consolidating the foundations for achieving the 2035 long-term goals, focusing on high-quality development and economic resilience [9]. - The article highlights the rapid increase in AI capital expenditure in the U.S., questioning whether this trend indicates a bubble and how long the capital expenditure expansion cycle can last [13][14]. - The "14th Five-Year Plan" review indicates that significant reforms and modernization efforts are necessary to achieve the goals set for 2035, including a doubling of GDP compared to 2020 levels and a substantial reduction in carbon emissions [10][16]. Hot Topics - The article outlines the expectations for the new "Five-Year Plan," focusing on high-quality development, institutional reforms, and industrial upgrades as the three main lines of action [10][12]. - It discusses the outcomes of the 20th Central Committee's Fourth Plenary Session, which emphasizes the need for a robust economic foundation and the importance of maintaining strategic confidence in the face of challenges [16][24]. - The article also addresses the implications of the U.S. government shutdown and its potential impact on global markets, particularly in relation to interest rates and gold prices [20][21]. Economic Insights - The article provides insights into the resilience of the economy in the third quarter, attributing this to both short-term factors and medium-term strengths that support reasonable growth [18][23]. - It notes that the current cycle of AI investment is significantly faster than previous technological revolutions, with AI-related sectors contributing 1.5% to GDP in the current cycle compared to lower percentages in past cycles [14][15].

Core Viewpoint - The article emphasizes the importance of focusing on domestic issues and continuing the narrative of rapid economic development and long-term social stability in China, amidst a backdrop of strategic opportunities and risks [3][4][12]. Economic Development - The meeting highlighted that China's development is currently characterized by both strategic opportunities and challenges, with an increasing number of unpredictable factors [3][12]. - It was stated that the goal for the "14th Five-Year Plan" period is to achieve significant results in high-quality development and greatly enhance the level of technological self-reliance [3][13]. - The meeting reiterated the commitment to achieving the annual economic and social development goals, with a solid foundation for a 5% economic growth target supported by nearly 300 billion yuan in policy financial tools and 500 billion yuan allocated from local government debt limits [4][12]. Modern Industrial System - The meeting placed greater emphasis on building a modern industrial system and explicitly stated the need to maintain a reasonable proportion of manufacturing [5][12]. - It stressed the importance of integrating technological innovation into industrial practices and promoting collaboration between traditional and emerging industries [5][12]. - The meeting called for enhancing the internal dynamics and reliability of domestic circulation and breaking down barriers to the construction of a unified national market [5][12]. Technological Development - The meeting underscored the importance of achieving high-level technological self-reliance and leading the development of new productive forces [6][14]. - It proposed a coordinated development of education, technology, and talent, while also emphasizing the advancement of digital China [6][14]. Economic System Reform - The meeting highlighted the critical role of economic system reform, upgrading the focus from "comprehensive deepening of reform" to "economic system reform as a driving force" [7][15]. - It emphasized improving the macroeconomic governance system and enhancing the effectiveness of macroeconomic governance [7][15]. Social Welfare and Green Development - The meeting focused on increasing efforts to improve people's livelihoods and promoting common prosperity, with a specific emphasis on employment, income, and housing [7][15]. - It called for a comprehensive green transformation of economic and social development, with a focus on achieving carbon peak and carbon neutrality [8][15]. Regional Development - The meeting proposed optimizing regional economic layouts and promoting coordinated regional development, emphasizing the need for a synergistic effect of various regional strategies [8][16].

Group 1: Policy Updates - The 20th Central Committee's Fourth Plenary Session will be held from October 20 to 23 in Beijing, which is expected to provide more guidance on the "14th Five-Year Plan" [1][19] - The State Council's 16th special study focuses on "anti-involution," emphasizing standard upgrades to promote high-quality economic development [2] - An economic situation symposium hosted by Premier Li Qiang highlighted the need for effective implementation of counter-cyclical adjustments and enhancing development momentum [3][4] Group 2: Economic Measures - The Ministry of Finance announced adjustments to the Hainan duty-free shopping policy, expanding the range of duty-free items and allowing unlimited purchases for eligible travelers [5][6] - The National Healthcare Security Administration is advancing the reform of instant settlement for medical insurance funds, aiming for 80% of regions to achieve this by 2025 [7][8] - Two types of incremental funds have been implemented to address fiscal spending pressures, with a total of 500 billion yuan allocated to support local government debt and investment projects [9][10] Group 3: Future Planning - The "15th Five-Year Plan" is expected to focus on high-quality development, institutional reform, and industrial upgrading as key themes [21][22] - The plan may prioritize emerging pillar industries and future industries, with a focus on digital economy and service consumption [23][24] - The upcoming plan is likely to reflect the need for a balanced approach to economic growth, emphasizing both quantity and quality in development [20][22]

Core Viewpoint - The article discusses the signals and implications from the recent Central Political Bureau meeting regarding the upcoming "15th Five-Year Plan," emphasizing themes such as fairness, localized development, high-level openness, and the integration of effective markets with proactive government roles [3][10]. Group 1: Signals from the September Central Political Bureau Meeting - The meeting highlighted the importance of "people" and "fairness," as well as the need for localized development and high-level openness [3][10]. - It emphasized the combination of effective markets and proactive government roles, indicating a shift in how these elements will be addressed in the "15th Five-Year Plan" [11]. - The meeting also reinforced the concept of "bottom-line thinking," stressing the importance of security in economic and social development [11][12]. Group 2: Main Lines of the "15th Five-Year Plan" - The "15th Five-Year Plan" is expected to focus on high-quality development, institutional reform, and industrial upgrading as its three main lines [5][18]. - It serves as a critical phase in the continuous process towards achieving the 2035 modernization goals, acting as both a deepening of the "14th Five-Year Plan" and a mid-term evaluation of the 2035 objectives [5][18]. - To meet the 2035 goals, the economy may need to maintain an average growth rate of around 4.4% during the "15th" and "16th" phases [21][26]. Group 3: Key Reform Tasks and Directions - The 20th Central Committee's third plenary session outlined over 300 reform tasks to be completed by 2029, indicating that the next five years will be crucial for comprehensive reforms [29]. - Key reform areas include market-oriented reforms, the cultivation of new productive forces, green low-carbon transitions, and improvements in social welfare systems [29][30]. - The focus on industrial transformation and upgrading is seen as a key means to achieve the core objectives of the five-year plan [31]. Group 4: Potential Industry Focus Areas - The "15th Five-Year Plan" is likely to prioritize the cultivation of "new productive forces," continuing the framework established in the "14th Five-Year Plan" [7][33]. - Emerging pillar industries such as artificial intelligence, marine economy, and low-altitude economy are expected to be highlighted in the plan [8][38]. - The plan may also address the integration of the digital economy with the real economy, emphasizing the need for a robust industrial structure [35][38].

Core Viewpoint - The economic growth in the third quarter is supported by short-term factors and medium-term resilience, maintaining reasonable growth [2][8][42] GDP - The GDP growth rate for the third quarter is 4.8%, matching expectations, with contributions from service consumption, improved external demand, and strong construction activity [2][44] - Service consumption remains resilient, contributing 2.7 percentage points to GDP [2][8] - External demand has improved, with net exports contributing 1.2 percentage points to GDP [2][8] - Construction activity surged in September, with a 22.9% increase, boosting property sales and supporting capital formation in GDP [2][8] Production - Industrial value-added growth increased to 6.5% in September, driven by specific industries like automotive production [2][13] - The automotive sector saw a 7.6% increase in value-added, contributing to an overall production growth of 0.4% [2][13] - Downstream production showed significant improvement, while upstream production remained weak due to declining investments [2][14] Retail Sales - Retail sales below the quota showed a decline, but service consumption continued to grow at a rate of 5.2% [3][20] - Retail sales of automobiles improved due to anticipated adjustments in subsidy policies, while home appliances saw a decline [3][20] - The overall retail sales growth in September was 3.0%, down 0.4 percentage points from the previous month [3][20] Real Estate - The "guarantee delivery" and "existing home sales policy" have been implemented, leading to a significant increase in construction activity [3][24] - Property prices in 70 cities showed a slight year-on-year increase, but still negative on a month-on-month basis [3][24] - The construction growth rate surged to 1.5% in September, driven by policy support [3][24] Investment - Fixed asset investment growth remains low, with a year-on-year decline of 6.5% in September [4][33] - Other expenses saw a significant increase, while construction and installation investment dropped sharply [4][33] - The acceleration of debt repayment has occupied funds for fixed investment, contributing to the ongoing decline in investment growth [4][33] Summary - Economic pressures are increasing, but policies are actively countering these effects, with expectations for resilience in the fourth quarter [4][42] - Short-term factors like "production rush" may fade, leading to potential downward pressure on industrial production [4][42] - The implementation of 500 billion yuan in local special bond quotas is expected to alleviate the impact of debt repayment on fixed asset investment [4][43]

Core Viewpoint - The article discusses the recent trends in major asset classes, highlighting the decline in overseas risk-free interest rates and the significant rise in gold prices, alongside the performance of various stock indices and the implications of political events in the U.S. and Japan [2][4][77]. Major Asset Classes & Overseas Events & Data - Overseas risk-free interest rates have uniformly declined, with the 10-year U.S. Treasury yield falling by 3 basis points to 4.02%. The S&P 500 rose by 1.7%, and the Nasdaq increased by 2.1%. The dollar index decreased by 0.3% to 98.6, while offshore RMB strengthened to 7.13. WTI crude oil dropped by 2.3% to $57.5 per barrel, and COMEX gold surged by 6.2% to $4,234.9 per ounce [2][4][77]. - In developed markets, stock indices showed mixed results, with the French CAC40, Nasdaq, and S&P 500 rising by 3.2%, 2.1%, and 1.7%, respectively. Conversely, the Hang Seng Index, German DAX, and Nikkei 225 fell by 4.0%, 1.7%, and 1.1% [4]. - The U.S. government shutdown has entered its third week, with expectations that it may last over 30 days. The Polymarket predicts a shutdown duration of over 30 days, while the Kalshi market estimates it could last up to 42 days [55][56]. - The Japanese Liberal Democratic Party (LDP) is seeking a coalition with the Japan Innovation Party after the Komeito party withdrew from their long-standing alliance. The new LDP president, Sanae Takaichi, is negotiating for majority support [50]. - Federal Reserve Chairman Jerome Powell indicated that the balance sheet reduction (QT) may end in the coming months, as liquidity indicators show signs of tightening. He noted that the economic situation has not changed significantly since the September meeting [62][77]. Sector Performance - In the U.S., all sectors of the S&P 500 saw gains, with communication services, real estate, information technology, consumer staples, and consumer discretionary rising by 3.6%, 3.4%, 2.1%, 2.0%, and 1.9%, respectively. The financial sector remained flat due to regional bank turmoil [10]. - In the Eurozone, most sectors also experienced increases, with consumer staples, technology, and consumer discretionary rising by 7.1%, 4.1%, and 3.7%, while financials and industrials fell by 2.1% and 1.0% [10]. - The Hang Seng Index saw a decline across most sectors, with the Hang Seng Tech Index, Hang Seng Index, and Hang Seng China Enterprises Index dropping by 8.0%, 4.0%, and 3.7%, respectively. The information technology, healthcare, and consumer discretionary sectors fell by 8.2%, 6.9%, and 5.7% [14]. Currency and Commodity Trends - The dollar index fell by 0.3% to 98.56, with most currencies appreciating against the dollar. The euro, British pound, and Japanese yen rose by 0.2%, 0.5%, and 0.4%, respectively. Emerging market currencies also saw appreciation, with the Mexican peso rising by 1.2% and the Brazilian real by 2.2% [25][32]. - Commodity prices mostly declined, with WTI crude oil and Brent crude both down by 2.3%. However, coal prices increased by 1.6% to 1,179 yuan per ton, while rebar prices fell by 2.1% to 3,037 yuan per ton [35][41]. - Precious metals saw a significant increase, with COMEX gold rising by 6.2% to $4,234.9 per ounce and COMEX silver increasing by 6.3% to $50.4 per ounce [41].

Group 1 - The article discusses the significant rise in AI capital expenditure in the US over the past few years, which has strongly supported the US capital markets and economic growth. It questions whether this investment boom signals a "bubble" and how long the capital expenditure expansion cycle can continue [2][7]. - From a micro perspective, the capital expenditure of major US tech companies is approaching $100 billion by Q2 2025, doubling from three years ago with a year-on-year growth rate of 64.8%. The public's interest in AI technology and investment has surged dramatically [8][11]. - From a macro perspective, AI investment is expected to contribute 1.0 percentage points to economic growth in the first half of 2025, nearly on par with consumer spending, but the negative impact of imports on net investment cannot be overlooked [3][22]. Group 2 - The article highlights that while AI has shown some potential to boost productivity, the overall effect remains limited. The probability of the US being in a "low growth" phase for productivity is still high at 85% as of Q2 2025 [4][26]. - Historical comparisons indicate that the current AI investment, productivity, and cost performance are lagging behind the internet revolution of the 1990s, suggesting that the AI revolution is still in its early stages [4][46]. Group 3 - The article raises concerns about the sustainability of the current AI capital expenditure cycle, noting that while the financial metrics of major tech companies are stronger than during the internet bubble, potential headwinds include declining free cash flow, pressure on profits, and rising electricity demands [5][60]. - It suggests that the macroeconomic environment remains favorable for AI capital expenditure, with expectations of continued Federal Reserve rate cuts and potential economic recovery supporting the capital expenditure cycle [5][69].

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first three quarters of 2025, highlighting a slowdown in broad fiscal spending and the need for monitoring the progress of new fiscal funds [1][8]. Group 1: Fiscal Revenue and Expenditure Overview - In the first three quarters of 2025, the national general public budget revenue reached 163,876 billion yuan, a year-on-year increase of 0.5%, while expenditure was 208,064 billion yuan, up 3.1% year-on-year [1][8]. - Broad fiscal revenue showed a year-on-year increase of 3.2% in September 2025, recovering by 2.9 percentage points compared to August, while broad fiscal expenditure decreased by 2.3% year-on-year, down 3.8 percentage points from August [2][9]. Group 2: Budget Completion and Trends - The budget completion rate for broad fiscal revenue in the first three quarters was 68.9%, slightly below the five-year average of 69.9%, and for broad fiscal expenditure, it was 67.1%, also below the five-year average of 68.5% [2][9]. - The decline in broad fiscal spending is attributed to the end of large-scale government debt financing support, with a total issuance of 10.3 trillion yuan in net financing and new bonds by September 28, 2025, achieving an issuance progress of 87% [2][14]. Group 3: Incremental Fiscal Funds and Future Outlook - To address the weakening fiscal expenditure pressure in the fourth quarter, two types of incremental funds have been established, including a new policy financial tool of 500 billion yuan, with over 100 billion yuan already allocated to sectors like digital economy and artificial intelligence [3][19]. - The upcoming meeting of the National People's Congress Standing Committee in late October may involve discussions on new government debt limits, which could impact the allocation of fiscal resources [3][23]. Group 4: Revenue Improvement and Spending Trends - Broad fiscal revenue showed marginal improvement, with general fiscal revenue increasing by 2.6% year-on-year in September 2025, while government fund revenue rose by 5.6% [4][28]. - Government fund expenditure continued to decline, contributing to a further drop in broad fiscal expenditure growth, which was 2.3% year-on-year in September, down from August [4][51].

Group 1: High-Frequency Tracking - The uncertainty surrounding tariffs has increased again, impacting global risk assets, with a notable rise in safe-haven assets like gold and U.S. Treasuries [10][11]. - September exports exceeded expectations due to a combination of low base effects and improved external demand [12]. - Domestic industrial production has shown signs of decline, while infrastructure construction has weakened, although travel activity remains high [13]. Group 2: Data Commentary - Inflation has surpassed expectations, driven by rising prices in commodities, which have significantly influenced upstream PPI, and increases in gold and appliance prices affecting downstream CPI [14]. - The surge in M1 growth may be partially attributed to accelerated fiscal spending [15]. Group 3: Hot Topics - The article discusses the potential future direction of U.S. tariffs from an American perspective, providing a framework for understanding the implications of tariff strategies [9]. - The transition period between old and new economic forces is highlighted, raising questions about the impact of external factors on strong export performance and the evolving domestic demand pressures [8].