GS EUROPEAN EXPRESS： Copper | Cellnex | UK Inflation/Labour Market | Global Economics | China PBOC | US Equities

Investment Rating - The report maintains a "Buy" rating for Cellnex, indicating a positive outlook for the company [2]. Core Insights - The report highlights the potential for a strike at Escondida, the largest copper mine in Chile, which could impact copper supply and prices. Negotiations with Sindicato No.1 are ongoing, and historical patterns suggest a likelihood of industrial action [2]. - Cellnex's sale of its Austrian asset for €803 million is viewed positively, as it supports the company's deleveraging efforts and enhances the growth outlook for its remaining assets [2]. - UK inflation is expected to decelerate, with services inflation projected at 5.48% for July, slightly below the Bank of England's forecast [4][5]. - The People's Bank of China (PBOC) is maintaining an easing bias to support economic growth, with expectations for a 25 basis point cut in the reserve requirement ratio in Q3 [5]. - The report notes a rebound in the Japanese equity market, with a revised 12-month target for TOPIX set at 2,900, reflecting a constructive long-term outlook despite recent corrections [9]. - In the China Internet sector, Tencent and Alibaba are expected to report in-line results, with Tencent projected to see a 33% year-on-year growth in adjusted operating profit [10]. Summary by Sections Copper Industry - The potential strike at Escondida could add USc8/lb to unit costs in the second half of 2024, with a cash bonus of approximately $110 million being a significant factor in negotiations [2]. Cellnex - The sale of the Austrian asset for €803 million implies a valuation of 20x 2025E EV/EBITDAaL, which is below recent transaction multiples but supports Cellnex's deleveraging path and enhances organic revenue growth [2]. UK Macro - July inflation is expected to show a deceleration in services inflation to 5.48%, with core inflation projected at 3.38% [4]. - The unemployment rate is anticipated to edge up to 4.5% in the June labour market report [4]. Global Economics - The report discusses cross-country differences in the neutral real rate (r*), emphasizing the benefits of macroeconomic stabilization for lowering interest rates [4]. China Macro - The PBOC's supportive stance includes a forecast for a 25 basis point cut in the reserve requirement ratio in Q3 and a 10 basis point policy rate cut in Q4 [5]. US Equities - The S&P 500 ended flat after a recovery from a previous sell-off, with small-cap and tech stocks underperforming [7]. Japan Strategy - The TOPIX index has rebounded by 11% from recent lows, with a revised year-end target reflecting the impact of recent market corrections [9]. China Internet - Tencent is expected to report a 33% year-on-year growth in adjusted operating profit, while Alibaba's EBITA is forecasted to decline by 11% year-on-year [10]. GCC TMT - The GCC TMT sector shows attractive free cash flow outlooks and dividend potential, with growth expected in both consumer and B2B segments [11].