SWHY(SZ:000166) Shenwan Hongyuan Securities·2025-10-09 14:42Core Insights - The report analyzes the impact of the U.S. government shutdown on asset prices and provides a forecast for Q4 2025, indicating that the shutdown is expected to lead to a decline in economic growth and increased market volatility due to delayed key economic data [3][14] - The probability of the government reopening after October 15, 2025, is estimated at 75% according to Polymarket [11][12] Economic Impact - The government shutdown is projected to reduce economic growth by 0.2 percentage points per week, equating to a loss of approximately $15 billion weekly, and could result in an additional 43,000 unemployed individuals per month [14][11] - Delayed publication of critical economic data, such as the September non-farm payrolls, will create uncertainty for the Federal Reserve's next interest rate decision and affect corporate investment decisions [14][3] Asset Price Analysis - Short-term expectations for interest rate cuts are reinforced by the government shutdown, while mid-term concerns about U.S. government credit are heightened [4][16] - Gold prices surged to over $4,000 per ounce following the shutdown, while the U.S. dollar showed slight recovery, and U.S. equities and 10-year Treasury yields remained volatile [4][16] Historical Performance Review - Historical data from 1976 shows that during previous government shutdowns, the S&P 500 had an average change of 0.02% with a 55% probability of increase, while the U.S. dollar index typically declined [5][19] - The average increase in gold prices during shutdowns was 0.4%, with a 50% probability of increase, indicating a stronger performance compared to other assets [19][21] Post-Shutdown Asset Price Trends - Following the end of government shutdowns, there is a higher probability of increases in gold prices and U.S. equities, with the S&P 500 showing an average increase of 1.2% in the two weeks post-shutdown [6][24] - Over a month, the S&P 500 and gold prices are expected to continue rising, with the dollar index also showing a tendency to increase [6][24] Q4 2025 Asset Price Forecast - The report anticipates a bullish outlook for U.S. equities and the dollar in Q4 2025, with a steepening yield curve for U.S. Treasuries and a long-term upward trend for gold prices [7][32] - The combination of fiscal expansion and a potential reduction in short-term interest rates is expected to support equity markets, particularly in the context of AI industry growth [7][32] Interest Rate and Inflation Expectations - The 10-year U.S. Treasury yield is projected to fluctuate between 4% and 4.5%, with expectations of a further steepening of the yield curve due to ongoing fiscal pressures [34][36] - The Federal Reserve is anticipated to have room for two rate cuts totaling 50 basis points in 2025, with inflation expectations remaining subdued [36][37] Currency Dynamics - The report suggests that the U.S. dollar may experience short-term strength due to preemptive rate cuts and the economic policies of Japan's new Prime Minister [41][42] - If the government shutdown eases, gold prices may see a short-term correction, but the long-term trend remains upward due to persistent debt risks in the U.S. and Europe [43][44]