Summary of Key Points from the Conference Call Industry Overview - **Global Consumer Staples** underperformed the wider market by -1% last month, with European Staples up by +3% and US Staples by +2% [1] - **Tobacco and Food Retail** sectors led the group with increases of +6% and +5% respectively, while **Beverages** faced challenges, declining by -1% in both the US and Europe [1] European Beverages & Tobacco - Small adjustments to European Beverage estimates ahead of Q4 earnings due to muted outlooks from early reporters like Rémy [2] - Sub-sector valuations are at long-run lows, suggesting potential for stock rallies if Q4 results meet expectations [2] - Positive outlook for **Carlsberg** and support for **ABInBev** and **CCEP** due to buybacks [2] - **Tobacco** remains resilient, bolstered by regulatory changes from the new administration [2] - Buy recommendations for **Imperial**, **BAT**, and **PM** [2] European Food & HPC - Caution regarding Q4 results as the sector polarization from 2024 may not change significantly [3] - Preference for companies with self-help stories or those in late-stage turnarounds, such as **Beiersdorf** and **Henkel** [3] - Concerns about **Nestlé** due to trade-offs between EBIT and volume recovery amid COGS inflation [3] - Risks identified for **L'Oréal** regarding market growth and Q1 guidance [3] U.S. Beverages & HPC - General softness observed in the 4Q24 earnings season with pricing deceleration and subdued volumes [4] - Increased FX headwinds and commodity inflation are additional risks [4] - Suggested barbell investment approach focusing on high-quality names like **Coca-Cola** and **Colgate**, alongside recovery potential names like **Keurig Dr Pepper** [4] U.S. Food - US food stocks started 2025 slowly, with large-cap median declining by 5% in January compared to SPX +3% [5] - Concerns about inflation in commodities and potential disappointing outlooks from companies like **Hershey** and **Mondelez** [5] - Caution expected from companies like **J.M. Smucker** and **General Mills** at the upcoming CAGNY Conference [5] Investment Ratings and Recommendations - **Coca-Cola**: Buy, with a market cap of $273 billion and a target price of $85 [10] - **PepsiCo**: Buy, target price of $195 [10] - **Monster**: Buy, strong long-term growth story [10] - **Kraft Heinz**: Buy, under-appreciated growth prospects [10] - **Nestlé**: Neutral, with earnings downside risk [10] - **Danone**: Buy, potential for margin accretion [10] - **Philip Morris**: Buy, strong pricing power and diversification into Next Gen Products [10] Additional Insights - The report highlights the importance of macroeconomic factors such as interest rates, commodity prices, and currency fluctuations on the consumer staples sector [8] - Analysts emphasize the need for investors to remain cautious and selective in their investment choices, particularly in the current economic climate [4][5][10]

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 22 Nov 2024 05:00:00 ET │ 34 pages V i e w p o i n t | Global Healthcare Citi's 2024 Global Healthcare Conference: Key Debates Across the | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

Viewpoint | Citi Research 09 Aug 2024 16:10:46 ET | 25 pages US Economics Weekly Rising unemployment is not "transitory" CITI'S TAKE The rise in the unemployment rate is the clearest sign yet that rather than achieving a "soft landing" the US economy is more likely to slide into recession. Attempts to explain away softer labor market data as a weather- related distortion are reminiscent of claims that elevated inflation would prove to be "transitory." Standard macroeconomics provides a more straightforward ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it [6]. Core Viewpoints - The report discusses key macro events for the week ahead, including central bank meetings and economic data releases, indicating a cautious market outlook [6][8]. - It highlights that inflation has fallen below central bank forecasts but remains above targets, which may influence central bank decisions [8]. - The report suggests that the market may be underestimating the potential for earlier rate cuts by central banks, particularly the Norges Bank [8]. Weekly Highlights - The report notes that August often marks a peak in richness for Bunds, indicating potential market dynamics to watch [10]. - It emphasizes that market pricing is skewed towards a front-loaded cycle for interest rate changes, with implications for future monetary policy [12]. - The report provides expectations for EGB spreads under different economic scenarios, indicating a current BTP-Bund spread of 143 basis points [13]. Supply Insights - The report outlines upcoming supply from various countries, including Germany and France, with specific issuance details such as the size and type of bonds [20][21]. - It mentions that the UK DMO will issue £3 billion of 3.75% gilt Jan38s, indicating active market participation [20]. - The report includes RV metrics for this week's nominal auctions, providing insights into valuation and yield changes [22][23].

Investment Rating - The report maintains a bearish view on risk in the G10 FX market, indicating a cautious stance towards upcoming catalysts [3][4]. Core Viewpoints - Recent market volatility has led to unwinds in crowded FX positions, creating a cleaner setup for upcoming catalysts, with a focus on labor market data over inflation metrics [3][4][5]. - The report emphasizes that US retail sales and initial claims will be more significant for the risk backdrop than CPI in the near term, with expectations of softer retail sales growth [4][5]. - The report highlights a shift in market focus from inflation to labor market dynamics, suggesting that the trading environment has become increasingly tactical [4][5]. Summary by Sections Market Sentiment - The report indicates that G10 FX will continue to trade based on risk sentiment, with a noted inflection point in the market [4][5]. - The report suggests that the recent NFP print has accelerated the bearish view on risk, leading to a repricing of the probability of a hard landing in the US economy [3][4]. Economic Indicators - Citi Economics expects a 0.2% month-over-month increase in total retail sales and a mere 0.1% increase in control group sales, with downside risks highlighted [4][5]. - Initial claims data is flagged as critical, with expectations that they will either align with leading job cut announcements or continue to rise due to labor market weakness [4][5]. Currency Strategies - The report recommends buying AUDNZD on dips, anticipating a dovish pivot from the RBNZ, which could create a favorable entry point for long positions [7]. - GBP is noted to be poised for a rebound, with positioning now cleaner after recent unwinds, and the report suggests selling EURGBP on rallies [8]. - The report discusses potential tactical support for JPY following a recent earthquake, which historically leads to USDJPY weakening due to repatriation expectations [9]. Central Bank Outlook - Citi Economics has revised its Fed call, expecting 125 basis points in cuts through year-end, which contrasts with market pricing of approximately 100 basis points [5]. - The report highlights dovish risks for Norges Bank, with recent data indicating falling inflation and rising unemployment, suggesting potential policy shifts [10].

CitiFX Wire Market Commentary - FXLM - Intended for Institutional clients only Europe Open - Gentle breeze By Naveen Nair A quieter day for markets in Asia with Japan observing a local holiday. Interbank FX volumes are ~60% lower than 30d averages according to our etraders. DXY trades flat, with JPY down 0.4% on the day though we flag no news behind this. The rest of the G10 FX complex trade in tight ranges. Elsewhere, US stock futures are flat, while cash US treasuries are closed on account of the Japan ho ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or companies discussed [1]. Core Insights - The report highlights that US core CPI data may provide some comfort to Federal Reserve officials while keeping them focused on labor and economic trends [2][3] - Key economic indicators to watch include US retail sales, consumer earnings, and jobless claims, which will be critical in assessing economic health [2] - Geopolitical factors are noted as ongoing risks, particularly in relation to Chinese equity earnings and US political developments [2] Summary by Relevant Sections Economic Indicators - US core CPI is expected to influence Fed policy, with retail sales and jobless claims being significant indicators for the week [2] - In the G10 region, the RBNZ and Norges Bank may adopt dovish stances due to macroeconomic conditions [2][3] - Chinese economic data, particularly equity earnings, will be crucial for local sentiment [2] Market Commentary - The report discusses the potential for a dovish shift in monetary policy from central banks in response to economic conditions [2][3] - It emphasizes the importance of monitoring labor market data, including initial and continuing jobless claims, as they may indicate rising unemployment risks [2][3] Currency and Trade Insights - The report notes expected changes in various currencies, with specific attention to the Eurozone and G10 currencies [2][3] - It highlights the anticipated trade balance for Indonesia, projecting a surplus increase due to resumed exports [2][3]

Investment Rating - The report maintains a pro-growth tone with expectations of incremental monetary easing, including a forecasted 10-20bps cut in the Loan Prime Rate (LPR) for the remainder of the year [6][19]. Core Insights - The People's Bank of China (PBoC) is balancing short-term growth support with long-term risk prevention, indicating a cautious approach to monetary policy [5][6]. - The PBoC's Monetary Policy Report (MPR) for Q2 2024 emphasizes countercyclical monetary policies to support growth, particularly in the second half of the year [7][8]. - Concerns regarding inflation remain low, with the PBoC expecting a moderate increase in the Consumer Price Index (CPI) and a gradual narrowing of Producer Price Index (PPI) contraction [8][9]. - The report highlights a sharp credit slowdown but notes that monetary policy remains supportive, with significant growth in loans to small and medium-sized enterprises (SMEs) and manufacturing sectors [9][10]. - The PBoC's relending tool for housing buyback has seen limited progress, with only RMB 24.7 billion extended for housing buyback by the end of June, against a total quota of RMB 300 billion [11][12]. - Concerns about bond yields are explicitly mentioned, with the PBoC noting that the 10-year China Government Bond (CGB) yield has deviated from reasonable levels, indicating accumulated financial risks [14][15]. - The report discusses the external constraints on monetary policy, particularly regarding exchange rate stability and the impact of U.S. monetary policy on the PBoC's decisions [18][19]. - A new monetary policy mechanism is emerging, with the 7-day reverse repo becoming the major policy rate, allowing the PBoC to better manage short-end market rates [20][22]. Summary by Sections Monetary Policy Outlook - The PBoC is expected to implement incremental easing, with a focus on countercyclical adjustments to support growth [6][7]. - The inflation outlook remains stable, with expectations of moderate CPI increases supported by seasonal consumption patterns [8][9]. Credit and Lending Environment - Total Social Financing (TSF) grew by 8.1% year-on-year, with M2 growth at 6.2% as of June, indicating a reasonable growth in financial aggregates [9][10]. - Lending rates have reached all-time lows, with the average loan rate at 3.68% in June, which may lead to increased mortgage prepayments [10][11]. Property Market Support - The PBoC's efforts in the housing market through relending tools have been slow, with only a fraction of the total quota utilized [11][12]. - The report suggests that more focused support may be necessary to address ongoing challenges in the property market [12][13]. Bond Market Concerns - The PBoC has expressed concerns about the rising bond yields and the associated financial risks, indicating a need for careful monitoring [14][15]. - The report suggests that while the PBoC's concerns are valid, the effectiveness of its measures to influence long-term yields remains uncertain [15][19]. New Monetary Policy Framework - The report outlines a shift towards a new interest rate framework, with the 7-day reverse repo as the primary policy tool, indicating a simplification of the interest rate system [20][22]. - The coexistence of multiple policy rates may create some confusion in the interim, necessitating further adjustments to the monetary policy framework [22][23].

Investment Rating - The report indicates a positive outlook for the Philippines with a slight increase in the GDP growth forecast from 5.9% to 6.0% for 2024, suggesting a favorable investment environment [10]. Core Insights - The Philippines' Q2 GDP growth was reported at 6.3% YoY, which is an improvement from Q1's 5.8% YoY, although the growth was attributed to a low base effect. Sequentially, the GDP expanded by 0.5% QoQ SA, marking the slowest pace in four quarters due to subdued household consumption [10]. - In China, despite CPI and PPI readings beating expectations in July, concerns about deflation persist. The CPI increase was primarily driven by supply-side factors for food and seasonal travel demand, while core inflation showed a slight decline [11]. - The report anticipates a 25bps rate cut by the Bangko Sentral ng Pilipinas (BSP) starting from the August 15 policy meeting, despite a temporary spike in inflation in July [10]. Summary by Sections Philippines - Q2 GDP growth of 6.3% YoY was stronger than previous forecasts, but the sequential growth of 0.5% QoQ SA was the slowest in four quarters. The BSP expects a negative output gap to persist, and inflation is projected to decline from August onwards [10]. China - CPI and PPI readings in July exceeded expectations, but the report suggests that this may not alleviate deflationary concerns. Policy efforts are deemed essential for sustainable reflation, with recent measures being insufficient [11]. India - The report notes that July CPI is expected to be around 3.8% YoY, influenced by base effects, with core inflation projected at 3.4% YoY. Industrial production is anticipated to decline sequentially due to lower manufacturing activity [7][10].

V i e w p o i n t | Prepared for Philip Hu CNB minutes, Turkish inflation forecast CITI'S TAKE 09 Aug 2024 06:25:02 ET │ 20 pages It has been an incredible week in global macro. After the recent trigger of Sahm's rule and the unexpected BoJ hike, we believe that this higher volatility may not normalise as fast as some expect, suggesting a potential re-calibration higher in EM risk premium. We are entering a mini regime of rising investing uncertainty, whereby the start of Fed easing almost overlaps with US ...