Ping An Securities·2025-09-22 04:10Core Views - The Federal Reserve has lowered interest rates by 25 basis points as expected, leading to a mixed performance in overseas assets, with US stocks and gold reaching new highs while the dollar and US Treasury bonds experienced profit-taking [2][20] - The MSCI Global Index rose by 0.99%, with US, South Korean, Indian stocks, and Chinese tech stocks leading the performance. The Dow Jones, Nasdaq, S&P 500, and Russell 2000 indices increased by 1.0%, 2.2%, 1.2%, and 2.2% respectively [2][20] - The 10-year and 2-year US Treasury yields rose by 8 basis points and 1 basis point to 4.14% and 3.57% respectively, while the dollar index increased by 0.03% to 97.65 [2][25] Economic Fundamentals - In August, US retail sales were flat compared to the previous month, recording a 0.6% increase, which was higher than the expected 0.2%. Key contributors included online retail, clothing, and sporting goods, while furniture and grocery store sales were major drags [3][9] - The Michigan Consumer Sentiment Index fell from 58.2 to 55.4, indicating that while consumer resilience remains strong, there are potential risks due to slowing employment and rising prices [9] Policy Developments - The Federal Reserve's decision to lower rates was accompanied by a mixed internal consensus, with the median forecast for rate cuts raised to 75 basis points for the year. The Fed has also adjusted its economic growth and unemployment rate forecasts upward while maintaining its inflation predictions for 2025 [10][15] - The Fed's economic projections indicate a GDP growth forecast of 1.6% for 2025, with an unemployment rate of 4.5% [11][15] Market Performance - The US stock market saw significant gains, particularly in small-cap stocks and the Nasdaq, driven by a favorable interest rate environment and strong narratives around AI. The S&P 500 index's price-to-earnings ratio (TTM) is at 29.51, close to the upper limit of its historical range [30][26] - Sector performance within the S&P 500 was mixed, with communication services, information technology, and consumer discretionary leading, while real estate and consumer staples lagged [36]