降息交易退潮，布局通胀交易

Market Performance - Global stock markets showed relatively muted performance last week, with US indices fluctuating between 1% and 1.5%[2] - The German DAX rose by 1.3%, while the French CAC40 increased by 0.5%, and the UK FTSE 100 fell by 0.3%[2] - In the Asia-Pacific region, the Nikkei 225 gained 2.5%, and the Korean Composite Index rose by 1.1%[2] - Emerging markets lagged, with India's SENSEX30, Mexico's MXX, and Brazil's IBOVESPA indices declining by 0.4%, 0.4%, and 1.4% respectively[2] Inflation and Interest Rate Outlook - US inflation data remains on a moderate decline, with September CPI at +2.4% year-on-year, slightly above the expected +2.3%[3] - Core CPI year-on-year was +3.3%, exceeding both the expected and previous values of +3.2%[3] - The probability of a 25 basis point rate cut in November is currently at 89.5%, showing little change from the previous week[3] - Potential for short-term inflation rebound exists due to rising energy prices amid geopolitical tensions and increased Chinese policy measures[3] Election and Market Correlation - Historical data indicates that when the Dow Jones performs well in the 8-10 month period, the probability of the same party winning the election increases[3] - As of October 12, 2024, the Dow Jones has a cumulative increase of 4.9%, compared to a 4.2% increase in the Nasdaq, suggesting a favorable outlook for the Democratic Party[3] Investment Strategy - In light of potential inflation rebounds and increased stimulus from China, the recommendation is to focus on investment opportunities along the inflation chain, including upstream resource stocks and service consumption sectors in the US, as well as utilities and essential consumption in Hong Kong[4] - Risks include unexpected rebounds in overseas inflation, weaker-than-expected global economic conditions, and geopolitical tensions escalating beyond expectations[4]