16 May 2025 | 4:25PM EDT +1(212)902-6781 | david.kostin@gs.com Goldman Sachs & Co. LLC Ben Snider +1(212)357-1744 | ben.snider@gs.com Goldman Sachs & Co. LLC Ryan Hammond +1(212)902-5625 | ryan.hammond@gs.com Goldman Sachs & Co. LLC Jenny Ma +1(212)357-5775 | jenny.ma@gs.com Goldman Sachs & Co. LLC Daniel Chavez +1(212)357-7657 | daniel.chavez@gs.com Goldman Sachs & Co. LLC Kartik Jayachandran +1(212)855-7744 | kartik.jayachandran@gs.com Goldman Sachs & Co. LLC US Weekly Kickstart Large-cap outperformance s ...

Jan Hatzius +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC Alec Phillips +1(202)637-3746 | alec.phillips@gs.com Goldman Sachs & Co. LLC David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC 17 May 2025 | 10:29PM EDT US Daily: Tracking Trade with High-Frequency Data (Peng) Manuel Abecasis +1(212)902-8357 | manuel.abecasis@gs.com Goldman Sachs & Co. LLC Elsie Peng +1(212)357-3137 | elsie.peng@gs.c ...

市场洞察 - Marquee --- Market Insights - Marquee Market Insights | Markets | Equities 市场洞察 | 市场 | 股票 Equities - Alpha 股票 - 阿尔法 A lot has happened in the last month – reciprocal tariff pause, US-UK trade deal, US-China détente, Indo- Pak ceasefire, Trump's Saudi trip deal announcements, back & forth in Russia-Ukraine peace talks & Iran nuclear deal 过去⼀个⽉发⽣了许多事情——互惠关税暂停、美英贸易协议、美中缓和、印巴停⽕、特朗普沙特之⾏及 协议宣布、俄乌和平谈判反复以及伊朗核协议 Left tail in equities got priced out and right tail has been left to imagination 股票市场的左尾⻛险已被剔除，右尾⻛ ...

Investment Rating - The report indicates a positive outlook for China's trade flows, particularly in exports, driven by significant tariff reductions and recovering import growth [2][32]. Core Insights - Export-led growth has been a crucial driver of China's economy, contributing to over half of the 5% real GDP growth in 2024 [3][32]. - The report emphasizes the importance of timely monitoring of trade flows using shipping data due to high uncertainty surrounding China's trade dynamics [4][32]. - Vessel traffic data is highlighted as an effective tool for tracking trade flows, with seaborne trade accounting for 67% of US imports from China [9][10]. Summary by Sections Seaborne Trade's Significance for China - Seaborne imports from China represent 67% of US imports and 60% of EU imports, indicating a strong reliance on maritime transport for trade [11][10]. - The share of seaborne exports to the US has increased from 62% in 2017 to 69% in Q1 2025, with higher-value goods often transported by air [10][11]. High-Frequency Shipping Data - The report discusses the development of high-frequency shipping data, which allows for daily and weekly tracking of trade flows, contrasting with the monthly release of official trade statistics [15][20]. - Elane's data is noted for its accuracy in tracking year-over-year growth for both exports and imports, outperforming other datasets [27][31]. Month-to-Date Tracking - As of mid-May, the month-to-date tracking indicates resilient export growth and recovering import growth, with expectations of further upside due to US-China trade talks [32][34]. - The report suggests that the significant tariff reductions and the 90-day pause on reciprocal tariffs could enhance China's export performance in the coming months [32][34].

Investment Rating - The report indicates a mixed sentiment on equities, with a notable improvement compared to previous bearish views, but still reflects uncertainty in the market [2][6]. Core Insights - Following the US-China trade truce, investors have significantly adjusted their recession expectations, with nearly 60% now assigning a 30% or lower probability of a recession occurring within the next 12 months, a stark contrast to the previous month where nearly half expected a 50% or higher probability [4][6]. - Despite improved sentiment, volatility is anticipated to remain elevated throughout the year, with 60% of respondents expecting the VIX index to reach 30 or higher by year-end [3][13]. - A majority of investors (70%) expect the S&P 500 to end the year above 5,800, a significant increase from only 25% who held this view last month [6]. Summary by Sections Market Sentiment - Risk sentiment has improved on the margin, but investors still expect more bouts of elevated volatility this year [2][13]. - 48% of respondents now expect the Fed funds rate to end the year above 3.75%, up from 31% last month [17][20]. Equities Outlook - The current sentiment on equities is mixed, with 36% bullish and 30% bearish [6]. - The S&P 500 is currently at 5,896, with expectations for year-end values significantly higher than previous estimates [8]. Interest Rates - Investors expect the next Fed rate cut to occur in September, with a slight bull steepening anticipated in the yield curve [20][24]. - 59% of respondents expect 2-year yields to be below 3.4% by year-end [20]. Currency Expectations - There has been a notable shift in sentiment regarding the euro against the dollar, with 46% expecting EUR/USD to end the year above 1.15, compared to only 22% last month [25].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - A-share trading volume reached a year-to-date low in mid-April, influenced by pre-holiday caution and uncertainties regarding domestic stimulus and US/China trade negotiations [4] - Post-Labor Day, trading volumes rebounded approximately 20% from pre-holiday levels, indicating a recovery in market liquidity, with an average daily volume of $181 billion in May, a 10% increase compared to April [4] - Volatility peaked after Liberation Day but has since decreased as trade-related concerns eased [4] - Average spreads narrowed by approximately 1-1.5 basis points in May compared to April, with the most significant reduction occurring in the first 30 minutes of trading [4] - The average quote size at the top of the order book increased by roughly 20% compared to April, suggesting lower transaction costs due to tighter spreads and deeper liquidity [4] - CSI300 stocks' volume participation rose from 18% to 25% after the Labor Day holidays [4][16] - Onshore Equity ETFs saw the largest weekly inflows during the week of April 11, primarily driven by CSI300 ETFs, although these inflows were followed by three weeks of net outflows [4] - Chinese Equities experienced moderate net buying activity for four consecutive weeks, with A-shares accounting for 70% of net buying flows [4] - Gross allocation to China has decreased from year-to-date highs, currently at 4.7%, while net allocation has increased to 8.6% [4] Summary by Sections Liquidity Overview - A-share trading volume dropped to a year-to-date low in mid-April due to investor caution [4] - Recovery in liquidity was observed post-Labor Day with a significant rebound in trading volumes [4] Foreign Positions & Flows - The report indicates a moderate net buying activity in Chinese equities, with A-shares dominating the flows [4] Sector Performance - Industrial, Finance, and Technology sectors saw the largest month-over-month volume increases, while Property and Utilities experienced reductions [4]

市场洞察 - Marquee --- Market Insights - Marquee Market Insights | Markets | Equities 市场洞察 | 市场 | 股票 markets / macro 市场 / 宏观 S&P went wire-to-wire this week ... convincingly recovered the 200-day moving average ... and, having rallied 20% o the April lows, now sits just 3% from the February highs. 标普本周⼀路上涨……令⼈信服地收复了 200 ⽇均线……⾃四⽉低点反弹了 20%，现距⼆⽉⾼点 仅 3%。 a market framework: ⼀个市场框架： i. locally, the administration put a few more points on the board (witness price action in the stocks most levered to the ME deals). i. ...

Investment Rating - The investment rating for iFlytek is Neutral, with a 12-month price target of Rmb55.30, indicating an upside potential of 15.9% from the current price of Rmb47.70 [9]. Core Insights - iFlytek has initiated a diverse AI monetization strategy targeting ToC, ToB, and ToG clients, focusing on API token fees, industry-specific AI solutions, and SOE/government projects [2][3]. - The company launched an "On-Prem LLM All-in-One solution" for enterprises, allowing clients to deploy multiple AI models on a single machine, enhancing operational efficiency [3]. - iFlytek's AI models are being integrated into automotive solutions, with applications in smart cockpits and audio systems, showcasing the company's expansion into the automotive sector [4][6]. Summary by Sections AI Monetization Strategy - iFlytek's AI monetization strategy includes the Spark LLM API token fee, industry solutions in education, healthcare, and automotive, and customized AI model services for SOE/government projects [2]. - The upgraded Spark reasoning model X1 was released in April 2025, with plans for continued in-house development of AI foundation models to optimize performance [2]. Enterprise Solutions - The "On-Prem LLM All-in-One solution" launched in April 2025 supports multiple AI foundation models for enterprise clients, allowing for customized solutions across various industries [3]. - Key features of the solution include Spark Insight for sales conversation analysis, OceanDoc for presentation generation, and Spark Wallex for integrating AI into hotel software applications [3]. Automotive Applications - iFlytek showcased its smart cockpit and smart audio solutions at the Autoshow Shanghai, with AI models adopted by over 16 automotive brands [4][6]. - The AI agents in the smart cockpit can summarize user-generated content and provide tailored recommendations, enhancing the passenger experience [6]. Financial Projections - Revenue projections for iFlytek indicate growth from Rmb23.34 billion in 2024 to Rmb41.02 billion by 2027, with EBITDA expected to rise from Rmb2.53 billion to Rmb6.39 billion in the same period [9]. - The company is expected to achieve an EPS of Rmb0.24 in 2024, increasing to Rmb1.95 by 2027, reflecting strong growth potential [9].

Investment Rating - The report raises the S&P 500 return and earnings forecasts, indicating a positive outlook for the index with new 3- and 12-month return forecasts of +1% and +11% respectively [2] Core Insights - The report highlights that lower tariff rates, improved economic growth, and reduced recession risks have led to an upward revision of S&P 500 earnings and return forecasts [2][4] - The revised S&P 500 EPS forecasts are $262 in 2025 and $280 in 2026, reflecting a growth of +7% year-over-year for both years [2][4] - The current P/E ratio of 21x is in the 90th percentile since 1990, with a forecasted 12-month P/E valuation of 20.4x, indicating reduced uncertainty and faster earnings growth [2][8] - The report emphasizes the importance of focusing on stocks with high pricing power to maintain margins amid elevated input costs [2][22] Summary by Sections Earnings Forecast - The report revises the S&P 500 EPS growth estimates to +7% for both 2025 and 2026, up from previous estimates of +3% and +6% respectively, due to a better-than-expected economic outlook [4][5] Valuation - The current P/E of 21x is noted to be 5% below the peak of 22x earlier this year, with an updated fair value estimate reflecting lower inflation and renewed confidence in fundamentals [2][8] Positioning - The report indicates that light equity investor positioning suggests potential for continued near-term market upside, with the US Equity Sentiment Indicator registering -1.5 standard deviations [2][14] Pricing Power - The report continues to recommend stocks with high pricing power, as they are expected to outperform in environments of weakening profit margins due to increased tariff rates [22][27] Big Tech and AI Stocks - The report anticipates that AI stocks will regain momentum as tariff-related volatility diminishes, with strong earnings growth profiles expected from AI-exposed equities [3][27]

Investment Rating - The report indicates a neutral stance on equities, shifting from an underweight position previously [10]. Core Insights - A better-than-expected outcome from US/China trade talks has led to a reduction in tariff tensions, prompting multiple global forecast revisions [2][6]. - Regional equity market earnings have been raised due to a more favorable growth outlook, with expected earnings growth for the MSCI Asia Pacific ex-Japan index at 9% for both 2025 and 2026 [14][18]. - The report anticipates moderately higher returns driven by improved earnings and a favorable macro backdrop, with a 12-month target for the MSCI Asia Pacific index set at 660, implying an 8% total return [18][28]. Summary by Sections US/China Trade Talks - The US and China announced a 90-day pause in tariffs, reducing the US effective tariff rate on Chinese exports to 39% from 107%, and the China effective tariff rate on US exports to around 30% from 144% [3][6]. - Following the announcement, the regional index gained 3.2% in three trading days, with significant gains in Taiwan, China Offshore, and India markets [3][4]. Global Forecast Revisions - The reduction in tariffs has led to an increase in the US real GDP growth forecast for 4Q from 0.5% to 1.0% and a decrease in the probability of recession from 45% to 35% [6][11]. - In China, GDP growth forecasts for 2025 and 2026 have been raised to 4.6% and 3.8%, respectively, with a corresponding increase in MSCI China index earnings growth forecasts [7][11]. Regional Earnings Growth - Earnings growth for the MSCI Asia Pacific index has been revised up by 2 percentage points for 2025 and 2026, primarily due to better macro growth expectations in China and US-exposed markets [14][18]. - Individual market revisions include a cumulative +5pp for China, +4pp for Hong Kong, Taiwan, and Korea, and +3pp for Japan and China A [14][15]. Return Expectations - The report expects 3-month and 12-month returns for the MSCI Asia Pacific ex-Japan index of 0% and 8% in USD price terms, driven by better earnings growth and a higher target P/E multiple of 13.4x [18][28]. - The report emphasizes the importance of alpha opportunities over beta, given that markets have already priced in much of the tariff relief [28][29]. Market Allocation and Themes - The report favors China and Japan, with a domestic sector tilt, and highlights themes such as resilience in a challenging macro context, AI beneficiaries, and shareholder yield [29][30]. - The report also notes the impact of USD depreciation on market differentiation, identifying winners and losers [32][29].