SINOLINK SECURITIES(SH:600109) SINOLINK SECURITIES·2025-10-08 10:02Group 1 - The report highlights that the narrative of a "weak dollar" has become deeply ingrained in the market, influencing global asset prices, particularly benefiting emerging markets over developed markets since September [2][10] - The performance of global stock markets has shown a clear trend where emerging markets, particularly Brazil and South Korea, have outperformed developed markets due to their sensitivity to the dollar index and the effects of AI and metal mining [2][10] - Precious metals, especially gold and silver, have emerged as the strongest sectors under the weak dollar narrative, outperforming industrial metals like copper [2][22] Group 2 - The report discusses two potential paths for the U.S. economy: one led by the service sector, which could lead to recession and a rebound in the dollar, and another led by manufacturing, which could result in a soft landing and a more gradual weakening of the dollar [31][34] - The divergence between the service and manufacturing sectors in the U.S. has been the longest since 2000, with the service sector showing resilience while manufacturing struggles under high interest rates [31][33] - The report suggests that if manufacturing leads the recovery, the extent of the dollar's weakness will depend on the comparative strength of the U.S. economy versus non-U.S. economies [34] Group 3 - For Chinese assets, the report outlines two scenarios: one where a rebound in the dollar due to increased risk aversion could lead to capital outflows from non-U.S. markets, and another where a recovery in U.S. manufacturing could bolster export demand for Chinese goods [3][49] - The report emphasizes that despite recent gains, Chinese assets still have a significant valuation gap compared to developed markets, suggesting potential resilience in the face of dollar fluctuations [3][45] - The potential recovery of global manufacturing could lead to improved export orders for China, supporting domestic demand and corporate profitability [3][51] Group 4 - The report indicates that the reliance on the weak dollar narrative may not sustain a long-term bull market for Chinese equities, suggesting that a shift in market dynamics may be necessary [3][57] - It recommends investors prepare for changes driven by domestic improvements and global economic shifts, focusing on sectors like upstream resources and capital goods that could benefit from a recovery in manufacturing [3][58] - The report also highlights the potential for consumer sectors, particularly travel-related industries, to see a rebound as travel data improves compared to previous years [3][62]