Key Points Summary Group 1: Macro Economic Insights - The report indicates a shift towards a more dovish stance in the short term, with expectations of a 25 basis point rate cut in September and another potential cut in December, while maintaining a neutral long-term outlook [5][16]. - Powell's assessment of the labor market has shifted to focus on downside risks, suggesting that the labor market is cooling and that there is an increasing risk of layoffs and rising unemployment [12][13]. - The report highlights that tariffs are expected to have a one-time impact on inflation, with Powell indicating that the effects will be temporary and not likely to create a wage-price spiral [12][14]. Group 2: Key Economic Data - In the U.S., new housing starts exceeded expectations at 1.428 million units, while existing home sales showed a slight increase to 4.01 million units, with a median home price of $422,400 [20][22]. - The report notes that the UK is experiencing increased inflationary pressures, with July CPI rising to 3.8% year-on-year, driven by food and service costs [26][27]. - Germany's GDP was revised down to a seasonally adjusted -0.3% for Q2, indicating economic contraction, while the Eurozone's construction output fell by 0.8% [28][29]. Group 3: Market Reactions and Trends - The market has shown a rebound following Powell's dovish comments, with a resurgence of easing trades observed around the Jackson Hole meeting [11][17]. - The report outlines various trading patterns, indicating that easing (rate cuts) typically leads to increases in stock and bond markets, while tightening (rate hikes) results in declines [18]. - The report also notes a mixed performance in the manufacturing sector, with the U.S. PMI data exceeding expectations, while the Eurozone's manufacturing PMI showed a slight recovery [20][28].

Group 1 - The global stock market has experienced a significant rally since April, with major indices reaching historical highs despite concerns over economic slowdown due to trade wars [3][9][10] - The S&P 500, Dow Jones, and Nasdaq have seen increases of 22.6%, 32.1%, and 43.2% respectively since their lows in April, while European and Japanese indices have also shown strong performance [9][10] - The market's optimism is attributed to the "winning theory" which has mitigated concerns over tariffs and geopolitical risks, alongside expectations of lower inflation and potential interest rate cuts by the Federal Reserve [3][11][12] Group 2 - Recent economic indicators from the US show signs of weakness, with existing home sales falling below expectations and durable goods orders declining [4][18][21] - The PMI data presents a mixed picture, with manufacturing PMI in the US dropping below the expansion threshold, while service sector PMI remains stable [21][24] - In Europe, PMI indices have shown an overall recovery, indicating improved consumer confidence and economic sentiment [24][26] Group 3 - The US-China trade relationship appears to be stabilizing, with recent agreements on tariffs and a potential extension of the tariff truce, which has positively influenced market sentiment [12][13] - The upcoming earnings reports from US tech companies are expected to shift market focus back to corporate fundamentals, particularly regarding the sustainability of profit growth amid economic fluctuations [13][14]

Group 1: Macroeconomic Indicators - The US CPI increased by 2.7% year-on-year in June, up 0.3 percentage points from May, while the core CPI rose by 2.9%, slightly below the expected 3.0%[10] - The actual tariff rate in June was approximately 10%, up from 2.4% in March, indicating a significant increase in tariff impact on core goods[12] - The UK CPI unexpectedly rose to 3.6% in June, exceeding expectations by 0.2 percentage points, while the core CPI reached 3.7%[15] Group 2: Inflation Contributions - The contribution of core goods to the CPI has expanded for three consecutive months, with June's contribution at 0.14 percentage points[11] - A 1 percentage point increase in the actual tariff rate is estimated to raise the year-on-year contribution to core goods CPI by approximately 0.017 percentage points[12] - Future tariff effects could push the US core CPI to 3.1%, 3.2%, and 3.3% under average tariff rates of 20%, 25%, and 30% respectively[13] Group 3: Market Reactions - The S&P 500 index was at 6296.79, reflecting a weekly increase of 0.59%[3] - The Nasdaq index rose by 1.51% to 20895.66, indicating a positive market sentiment despite inflation concerns[3] - The US dollar index increased by 0.60% to 98.4600, suggesting a strengthening dollar amidst rising inflation expectations[3]

Group 1 - The report indicates a temporary easing of the de-dollarization trend, with U.S. assets showing stability as major stock indices rose and bond yields declined [4][11] - The U.S. economy demonstrates resilience, with GDPNow predicting a 3.8% annualized growth for Q2 2025, driven by a significant drop in imports and strong personal consumption [4][13] - Inflation pressures are subsiding, as evidenced by the PCE price index showing a year-on-year increase of 2.1%, down from 2.3% in March, and core PCE at 2.5%, marking a new low since March 2021 [12][24] Group 2 - In Europe, the economic sentiment is improving, with the Eurozone's industrial confidence index rising to -10.3 from -11.0, and the economic sentiment index increasing to 94.8 from 93.8 [31][29] - France's GDP growth was slightly revised down to 0.3% year-on-year, indicating a modest economic performance [29] - Japan's core CPI in May rose to 3.6%, reflecting ongoing inflationary pressures, while industrial production showed a decline [32][34]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the intertwining expectations of recession and stagflation in the US economy, with significant market divergence observed in global trading [2][10] - Recent macroeconomic indicators, including lower-than-expected CPI and PPI, suggest a decline in short-term demand and increasing economic downturn pressure [2][10] - The report emphasizes that inflation expectations are rising despite short-term inflation pressures decreasing, indicating a complex economic landscape [12][28] Summary by Sections Weekly Focus - The US stock market indices, including the S&P 500, Nasdaq, and Dow Jones, experienced declines of 2.3%, 2.4%, and 3.1% respectively, while European markets also turned bearish due to recession concerns [10] - The US CPI for February increased by 2.8% year-on-year, lower than the expected 2.9%, indicating a cooling in inflation [10][23] - Core CPI also showed a year-on-year increase of 3.1%, which was below the anticipated 3.2% [10][23] Key Data - The US labor market shows signs of weakening, with January wholesale sales declining by 2.3% for durable goods and 0.3% for non-durable goods [28] - The Michigan Consumer Sentiment Index dropped significantly from 64.7 to 57.9, reflecting decreased consumer confidence [28] - The report notes that the labor market has reached a near-equilibrium state, with job openings and labor shortages being adjusted downwards [11][21] Important Events - The US Congress passed a short-term spending bill to avoid a government shutdown, maintaining federal operations until September 30, 2025 [49] - The EU has implemented countermeasures against US tariffs, indicating ongoing trade tensions [10][49] - Japan's wage growth reached its highest level since 1992, highlighting significant economic shifts [10][49] Market Trading Patterns - The report identifies a mixed trading pattern in recent days, with recession and inflation themes dominating the market [15][20] - The bond market reflects investor concerns about long-term inflation, with rising inflation expectations despite short-term indicators showing a decline [12][28] Economic Outlook - The report anticipates that the impact of tariffs on inflation will be stronger than in 2018, as producers face limited capacity to absorb costs [13] - The interplay between rising inflation and economic slowdown will be crucial in determining the future trajectory of recession versus stagflation [13]

Investment Rating - The report indicates a positive outlook for the consumer sector, particularly in optional goods and dining, with a focus on structural improvements in retail sales [3][7]. Core Insights - Retail sales in January and February showed a year-on-year increase of 4.0%, slightly below the consensus expectation of 4.5%. Excluding automobiles, the growth rate was 4.8% [3][7]. - The performance of optional goods such as clothing, cosmetics, and jewelry has improved, with year-on-year growth rates of 3.3%, 4.4%, and 5.4% respectively [4][16]. - The dining sector experienced its best performance since the second half of 2024, with overall dining revenue increasing by 4.3% [5][12]. - The government has introduced measures to boost consumption, particularly in dairy products, trendy retail, and leading sports footwear companies [5][12]. Summary by Sections Retail Sales Performance - In January and February, retail sales grew by 4.0% year-on-year, with optional goods and dining showing significant improvement [3][7]. - The growth in retail sales of optional goods was driven by strong performance in clothing, cosmetics, and jewelry, alongside a high growth rate in sports and entertainment-related services [4][16]. Durable Goods - The report highlights that the national subsidy policy has positively impacted the performance of communication equipment and furniture, with year-on-year growth rates of 26.2% and 11.7% respectively [4][17]. - Despite a decline in the growth rate of home appliances due to installation issues during the Spring Festival, production data suggests that the subsidy effects are still present [4][17]. Essential Goods - The demand for beverages and tobacco remains relatively weak, with year-on-year growth rates of 11.5% for food, -2.6% for beverages, and 5.5% for tobacco [4][17]. Government Initiatives - The Central and State Council have issued a "Special Action Plan to Boost Consumption," focusing on establishing childcare subsidies, promoting domestic trendy products, and optimizing approval processes for cultural and sports events [5][12]. Online Retail and Logistics - Online retail sales growth has slightly decreased to 5% year-on-year, while express delivery volumes continue to show strong growth at 22.4% [30][32].

Investment Rating - The report indicates a positive outlook for the consumer sector, particularly in optional goods and dining, with a focus on structural improvements in retail sales [3][7]. Core Insights - Retail sales in January and February showed a year-on-year increase of 4.0%, slightly below the consensus expectation of 4.5%. Excluding automobiles, retail sales growth was stronger at 4.8% [3][7]. - The dining sector experienced its best performance since the second half of 2024, with overall dining revenue increasing by 4.3% year-on-year [5][12]. - The report highlights the effectiveness of national subsidies in boosting durable goods, with significant growth in categories such as communication equipment and furniture [4][17]. Summary by Sections Retail Sales Performance - In January and February, retail sales of optional goods such as clothing, cosmetics, and jewelry showed recovery, with year-on-year growth rates of 3.3%, 4.4%, and 5.4% respectively [4][16]. - The sports and entertainment category continued to thrive, achieving a year-on-year growth of 25.0% [4][16]. - The overall retail sales growth for goods and dining was recorded at 3.9% and 4.3% respectively [3][7]. Durable Goods and Subsidies - National subsidies have positively impacted the performance of communication equipment and furniture, with year-on-year growth rates of 26.2% and 11.7% respectively [4][17]. - Despite a decline in the growth rate of home appliances due to installation issues during the Spring Festival, production data suggests that the subsidy effects are still strong [4][17]. Consumer Behavior and Trends - The demand for essential goods such as beverages and tobacco remains relatively weak, indicating a need for further recovery [4][17]. - The report notes that online retail sales growth has slightly decreased to 5% year-on-year, while express delivery volumes continue to show strong growth at 22.4% [30][32].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report discusses the impact of Trump's policies on the U.S. economy and China's external demand, highlighting significant changes in trade, immigration, fiscal policy, and international relations [1][3] Summary by Sections Section 1: Trump's Policy Expectations - Trump's administration has signed 140 official documents in the first 52 days, significantly more than previous administrations, indicating a proactive approach to governance [4][5] Section 2: U.S. Economic Shift and Narrative Change - The report notes a record trade deficit of $1,568 billion in January, which is expected to negatively impact GDP growth by approximately 3% [17] - Consumer confidence has declined, with the Michigan Consumer Sentiment Index dropping to 64.7, reflecting concerns over government spending cuts and economic policies [23] Section 3: Impact of Tariffs on China - Trump's tariff policies have become more complex and targeted, with a focus on imposing tariffs on specific industries such as steel, aluminum, and automotive, aiming to protect U.S. manufacturing and reduce fiscal deficits [8] - The report outlines a series of tariffs imposed on imports from China and other countries, indicating a shift towards a more aggressive trade stance [8] Section 4: Immigration Policy - The administration's immigration policies have faced legal challenges, particularly regarding the birthright citizenship issue, which has been deemed unconstitutional by several judges [9] - Efforts to deport illegal immigrants have been initiated, but the costs and legal hurdles present significant challenges to implementation [9] Section 5: Fiscal Policy and Tax Cuts - The report highlights a focus on fiscal balance, with plans to save $1 trillion through government efficiency measures, while tax cuts are positioned as a secondary priority [10] - The administration aims to reduce the federal deficit, with proposals to cut spending and reassess foreign aid [10] Section 6: International Relations - Trump's foreign policy has been characterized by a series of withdrawals from international agreements and organizations, emphasizing an "America First" approach [11] - The report notes significant diplomatic tensions, particularly regarding the Ukraine crisis and relations with NATO allies [11] Section 7: Energy and Environmental Policy - The administration has reversed many of the previous administration's environmental policies, focusing on traditional energy production and reducing regulatory burdens on the energy sector [12] - The withdrawal from the Paris Agreement and the push for increased fossil fuel production are key components of the energy strategy [12]

Group 1: Trump Administration's Policy Actions - Trump signed 89 executive orders, 18 presidential statements, and 23 other documents within the first 52 days of his administration, a threefold increase compared to the same period in 2017[4] - The establishment of the Department of Government Efficiency (DOGE) aims to save $550 billion, with 84,500 federal employees affected by buyout plans and layoffs[7] - The administration's trade protection measures include a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum, with further tariffs on various products expected[8] Group 2: Economic Indicators and Trends - The U.S. trade deficit reached a record $156.8 billion in January, contributing to an estimated 2.4% contraction in Q1 GDP[17] - Consumer confidence indices have declined, with the Michigan Consumer Sentiment Index dropping to 64.7 in February, down from 71.7[23] - Retail sales showed a seasonally adjusted month-on-month decline of 0.9% in January, indicating a slowdown in consumer spending[26] Group 3: Employment and Labor Market - The U.S. unemployment rate increased slightly to 4.14% in February, with government layoffs not yet fully reflected in the data[35] - The government sector added only 11,000 jobs in February, with significant layoffs expected due to the DOGE's efficiency measures[32] - The impact of government layoffs could potentially raise the unemployment rate by 1.1 percentage points if 20% of federal employees are affected[35] Group 4: Real Estate and Inflation - Rising interest rates have led to a cooling real estate market, with new home sales down 10.5% month-on-month in January[38] - Inflation indicators show a slight decrease, with the CPI for all items at 2.8% year-on-year in February, down from 3.0% in January[41]

Investment Rating - The report assigns a "Buy" rating to the company 361 Degrees (1361.HK) with a target price of HKD 5.63, indicating a potential upside of 22.7% from the current price of HKD 4.59 [3][8]. Core Insights - The company is expected to achieve a revenue growth of 20% and a net profit growth of 19% for 2024, aligning with expectations. The end-of-period inventory increased by 56% to HKD 2.1 billion due to early stocking for the Spring Festival [5][6]. - The company plans to expand its "super product stores" to 100 by the end of 2025, aiming to create a store model similar to "Uniqlo" in the sports industry [7][8]. - The report anticipates a revenue growth of 10-15% for 2025, with a net profit margin projected between 10-12% [8]. Financial Performance - For 2024, the company reported a revenue of HKD 10.07 billion, with a gross profit margin of 41.5% and a net profit margin of 11.4% [5][9]. - The forecast for 2025E-2027E indicates revenues of HKD 11.24 billion, HKD 12.41 billion, and HKD 13.66 billion, representing year-on-year growth rates of 11.5%, 10.4%, and 10.1% respectively [8][9]. - The net profit for the same period is expected to be HKD 1.28 billion, HKD 1.41 billion, and HKD 1.57 billion, with growth rates of 11.3%, 10.5%, and 11.0% respectively [8][9]. Market Position and Strategy - The company has seen strong performance in its running and basketball categories, with year-on-year growth rates of 30% and 20% respectively. High-end products have also made significant contributions to sales [6][8]. - The company is focusing on enhancing its inventory management and improving cash flow, with a projected operating cash flow of HKD 70 million for 2024 [5][8].