Industry Investment Rating - The report does not explicitly mention an investment rating for the industry [1][2][3] Core Viewpoints - The European automotive industry is making steady progress in developing automated vehicles, with significant investments yielding results [3] - Automation in mobility is expected to bring tangible benefits to European society, including lower transport costs, reduced environmental impact, improved working conditions, and better-served transport needs [3] - Supporting R&D in automation will enable European firms to remain competitive in the future of transport and encourage high-quality connectivity [3] - The roadmap aims to help European policymakers and stakeholders navigate the transition to automated mobility [3] Levels of Automated Driving - Assisted driving includes basic systems that recommend actions to drivers or provide additional sensory perception (e g blind spot detection) [3] - Advanced active safety systems intervene automatically, faster, and more reliably than humans (e g automated emergency braking systems) [3] - Automated driving technology can perform all dynamic driving tasks in specific scenarios (e g autopilot function for motorways) [3] - Autonomous driving aims to enable the vehicle to handle the full driving experience without human input [3] Uses of Automated Driving Technology - Highly automated heavy trucks can carry freight over medium and long distances, optimizing routing and scheduling for efficiency [5] - Commercial vehicles in confined areas (e g harbours, airports) allow for earlier adoption of self-driving technology due to controlled environments [5] - Automated last-mile delivery can alleviate strain on road networks and businesses caused by increased online shopping demand [5] - Automated passenger services can provide crucial mobility services, especially for people with disabilities and the elderly [5] - Automated valet parking systems save time, enhance safety, reduce energy consumption, and optimize parking space usage [6] - Private vehicles on highways are evolving from assisted driving to full automation, with each development stage lasting around a decade [6] - Hub-to-hub freight transport can operate on request around the clock, reducing wasteful trips and improving traffic flow [7] Benefits of Automated Mobility - Innovation capabilities: Cutting-edge research and engineering create and retain know-how in Europe, attracting a highly skilled workforce [10] - Competitiveness: Automated mobility allows Europe to leverage public-private cooperation and balance intelligent infrastructure with intelligent vehicles [11] - Workforce and skills: Automation can address the shortage of commercial vehicle drivers and improve working conditions [12] - Sustainability: Optimal vehicle usage leads to less congestion, lower speeds, and more efficient transport operations [13] - Road safety and comfort: Automated systems reduce human error, react faster, and remain vigilant, enhancing safety and comfort [14] - Accessibility and inclusion: Automation provides new mobility solutions for those with reduced mobility, improving access to healthcare and work [15] Recommendations for Deploying Automated Vehicles - Foster R&D in automated driving technologies and standards [17] - Simplify national and cross-border pre-deployment testing of automated systems on open roads across the EU [17] - Upgrade, adapt, and harmonise digital infrastructure for automated driving [18] - Establish European minimum standards for high-quality physical road infrastructure [18] - Update and harmonise road traffic rules to allow for high-level automation [18] - Cooperate with the industry on guidelines for remote vehicle supervision [18] - Grant access to public traffic data [18] - Update Europe's type-approval scheme to remove restrictions on automated vehicle registrations [19] - Expand the number of automated vehicle applications allowed in Europe [19] - Support the adoption and harmonisation of national operation, licensing, and traffic regulation [19] - Foster harmonisation of legislation on a global scale [19] - Create a European funding scheme for automated passenger and freight services [19] - Inform and establish a dialogue with the general public and future drivers and passengers of automated vehicles [20] - Adapt labour regulations for commercial vehicle drivers and operators [20] Roadmap - Commercial operation for each use case will start within the indicated time range (2022-2030) [21][22]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's fiscal sector is experiencing both near-term and long-term challenges, with slower public sector activity negatively impacting economic growth [2] - The government has maintained an expansionary fiscal stance, with a deficit around 7% of GDP, but local fiscal spending has contracted due to declining tax and land sales revenue [2][7] - A budget revision is deemed necessary, as fiscal spending may drop by an additional -2.5% YoY without policy changes, while an increase in the deficit could allow for a 3% YoY increase in spending [2][25] Summary by Sections Fiscal Challenges - The revenue-to-GDP ratio in China has declined by almost 10% over the past decade, now at approximately 22% of GDP, significantly lower than G7 (36%) and OECD (39%) averages [15] - The public sector's growth was only 3.4% in H1 2024, the second lowest among all sectors, indicating a slowdown in public sector activity [5] - Fiscal revenue dropped by -5% YoY in the first seven months of 2024, attributed mainly to an -18% YoY decline in land sales and a -5% YoY decline in major taxes like VAT and corporate income tax [10][13] Long-term Strategies - Broadening the tax base on high-end consumption is suggested as a practical approach to reverse the downward trend in fiscal revenue [3] - Local government financing has become increasingly reliant on borrowing or central government transfers, highlighting the need for reforms to boost local revenues [20] - The government's plan to increase revenue through consumption tax is seen as prudent, with current consumption tax revenue at 1.3% of GDP, below the OECD average of 2.9% [27]

J P M O R G A N Global Quantitative & Derivatives Strategy 27 August 2024 US Equity Financing and AIR TRF Monitor Aug 27, 2024 • Short-dated implied financing rates increased on the S&P 500, Nasdaq 100, and Russell 2000 w/w, leading to a flattening of the funding term structure. • Pricing on the S&P 500 AIR TRFs increased 1 bp on the Sep'24 contract, 4 bps on the Dec'24 contract, 3 bps on the Mar'25 contract, and were little changed across the rest of the curve w/w. • Volumes on S&P 500 AIR TRFs totaled ~$8 ...

Investment Rating - The report does not explicitly provide an investment rating for the industry [1]. Core Insights - The report anticipates that Bank Negara Malaysia (BNM) will maintain its current policy stance due to unexpected growth and rising inflation, which is expected to narrow the real policy rate from 1% in the coming months [2][3]. - Inflation rates in South Korea, Thailand, and Vietnam are projected to decrease to 2.1%, 0.5%, and 4.1% YoY respectively, influenced by favorable base effects on food prices [2]. - Philippine inflation is expected to drop significantly to 3.7% YoY in August, returning within the central bank's target range due to tariff reductions easing rice price pressures [2]. - Indonesia's CPI inflation is forecasted to rise slightly to 2.2% YoY in August, while Taiwan's CPI is expected to remain high at 2.4% YoY, driven by rising food prices due to adverse weather conditions [3]. - Advanced Asian economies are experiencing eased financial conditions, primarily due to rebounds in local equity and sovereign bond markets [3]. Summary by Sections Economic Performance - India's GDP growth slowed to 6.7% YoY in Q2, down from 7.8% in Q1, which is below both the report's and the Reserve Bank of India's forecasts [4][5]. - Singapore's industrial production grew by 1.8% YoY in July, driven by electronics and related manufacturing, despite volatility in the biomedical sector [5]. - South Korea's industrial production contracted by 3.6% MoM in July, marking the worst monthly performance since May 2020 [6]. Inflation Trends - The report highlights that inflation in various Asian countries is showing a downward trend, with specific figures for July and August indicating a general easing of price pressures [2][3]. - The report notes that the inflation trajectory will be closely monitored, particularly in light of potential subsidy rationalizations in Malaysia [2]. Trade and Exports - Hong Kong's exports increased by 13.1% YoY in July, driven by strong demand from mainland China and the US, while imports rose by 9.9% YoY [6].

ab 28 August 2024 Global Research and Evidence Lab China Economic Perspectives Home Destocking Debate and Property Forecast Downgrade Economics China Where are we now in the property downturn? China's property activities have not bottomed since the unprecedented sharp downturn in 2021. The decline in urban housing prices has accelerated since H2 2023 amid elevated inventory pressure, weighing on household home purchase intention, consumption confidence and local government finances. China has eased property ...

Investment Rating - The report indicates a neutral investment rating with the BofA Bull & Bear Indicator at 6.2, suggesting a balanced market sentiment [29]. Core Insights - The report highlights a structural shift back to a 5% inflation environment, driven by factors such as globalization reversal, low debt, and demographic changes, indicating the beginning of a commodity bull market [3][10]. - It notes that China is increasingly relying on exports as domestic consumption slows, with retail sales growing only 3% annually since 2020 compared to 13% in the previous decade [3][10]. - The report emphasizes the importance of monitoring US hiring trends, as historical data shows that a decline in private sector job share below 40% often precedes a recession [3][4]. Summary by Sections Market Performance - Year-to-date performance shows gold at 22.4%, stocks at 15.4%, and cryptocurrencies at 14.3%, with cash and government bonds yielding minimal returns [2]. - The report notes significant inflows into cash ($24.5 billion) and bonds ($20.7 billion), while equities saw inflows of $13.7 billion [6][18]. Economic Indicators - The report suggests that if the ISM manufacturing index exceeds 49, it could lead to a rise in long-term bond yields, indicating better opportunities in Q4 [2][8]. - The ratio of new orders to inventories is highlighted as a leading indicator for ISM manufacturing PMI, with expectations of an ISM reading of 52 by October 2024 [8][14]. Sector Analysis - The report indicates that the financial sector experienced the largest inflow in six weeks, while utilities faced the largest outflow in ten weeks [7][18]. - It also notes that BofA private clients are reallocating their investments, with significant purchases in REITs and financials while trimming positions in T-bills [7][22]. Global Trade Dynamics - China’s GDP growth is reported at 5%, but domestic growth is sluggish, with consumer confidence at all-time lows [10]. - The report discusses the impact of trade restrictions on global imports, particularly in key industries like electric vehicles and steel, which could limit deflationary pressures [3][10]. Commodity Outlook - The report asserts that commodities are expected to outperform bonds in the coming years, with total returns for commodities significantly higher than those for long-term U.S. Treasuries over the past four years [10][26]. - It emphasizes that the current commodity bull market is just beginning, with annualized returns projected between 10-14% [10].

Investment Rating - The report indicates a positive outlook for the U.S. economy, with expectations of a 50 basis point rate cut by the Federal Reserve in September, contingent on upcoming employment data [7][8]. Core Insights - The U.S. economy is showing signs of robust consumer spending, with real consumer spending increasing by 0.4% in July and an upward revision of 2Q GDP growth to 3.0% from 2.8% [3][4]. - Business spending remains cautious, with nominal shipments of nondefense capital goods declining for three consecutive months, indicating a potential slowdown in business investment [4][5]. - The core PCE price index, the Fed's preferred inflation measure, rose only 0.16% month-over-month in July, suggesting moderating inflation risks [2][9]. - The personal saving rate has dropped to 2.9%, nearing post-COVID lows, raising concerns about future consumer spending sustainability [9][11]. - The labor market shows signs of cooling, with payroll gains expected to be modest at 150,000 for August, maintaining the unemployment rate at 4.3% [6][41]. Economic Growth and Consumer Spending - The report revises the 3Q GDP growth estimate to 1.5%, up from 1.3%, reflecting stronger consumer spending forecasts [3]. - Consumer confidence has improved slightly, with the Conference Board index rising to 103.3 in August from 101.9 in July [11][50]. Business Investment and Employment - Equipment spending forecast for 3Q has been raised to 5.0% from 1.0%, driven by strong aircraft shipments and capital goods imports [5]. - Business sentiment remains cautious, as indicated by downbeat regional Fed surveys, suggesting potential challenges ahead for business investment [4][6]. Housing Market - Housing data remains weak, with pending home sales declining 5.5% month-over-month in July, reaching an all-time low [11][60]. - The report anticipates a significant drop in real residential investment for 3Q, revised down to -10% from -5% [12]. Labor Market Dynamics - The labor market differential from the consumer confidence survey has decreased, indicating a growing perception of job scarcity [45]. - Job openings in the JOLTS report are expected to remain stable, with a slight increase anticipated for August [26][28]. Inflation and Consumer Behavior - The core PCE inflation rate remains above the Fed's target at 2.6% year-over-year, but recent trends suggest a moderation in inflationary pressures [2][61]. - The report highlights a disconnect between consumption and income growth, with real disposable income growth slowing [9][61]. Trade and International Factors - The nominal goods and services trade balance widened to -$80.1 billion in July, reflecting a significant increase in the goods deficit [23]. - The report notes that service imports may receive a boost from payments related to the Paris Olympics, impacting the trade balance [23].

Investment Rating - The report does not explicitly state an investment rating for the industry [1]. Core Insights - The report highlights a significant decline in cash equity turnover and derivatives activity in the Hong Kong market, with a 36% decrease in cash total turnover compared to the previous year [2]. - The Southbound Stock Connect flows have shown a cumulative total of $428.67 billion since inception, with a year-to-date flow of $57.90 billion, indicating ongoing interest from foreign investors despite recent fluctuations [7][19]. - The report notes a decrease in margin trading balances and a negative trend in Northbound flows, suggesting cautious sentiment among investors [11][19]. Summary by Relevant Sections Cash and Derivatives Market - Cash total turnover in Hong Kong is reported at $10.1 billion, down 22% from the previous year, while futures turnover has decreased by 30% to $15.2 billion [2]. - The total open interest for futures has also declined, with a 16% drop in comparison to the 12-month average [2]. Stock Connect and Foreign Flow - Northbound turnover from Shenzhen and Shanghai has seen a decline, with Northbound turnover as a percentage of total A-shares turnover showing a downward trend [4]. - Southbound turnover has also decreased, reflecting a cautious approach from Hong Kong investors towards mainland stocks [4]. Market Performance - The report indicates that the CSI 300 index has experienced a 2.7% decline in July 2024, while the CSI 500 index saw a more significant drop of 4.9% [11]. - The overall market sentiment appears to be bearish, with various indices showing negative performance over the past months [11][21]. Fund Flows - Equity and hybrid fund issuance has decreased significantly, with only 8 billion CNY issued in July 2024 compared to higher figures in previous months [11]. - The report notes a negative trend in margin purchases, indicating a reduction in leveraged trading activity [11]. Derivatives Positioning - The report highlights a decline in open interest for options across major indices, suggesting reduced speculative activity in the derivatives market [12][13].

ab 26 August 2024 Global Research and Evidence Lab US Equity Strategy Earnings Brief 2Q24: August 26 NVDA (6.6% of S&P 500 market cap) reports earnings on Wednesday. EPS is expected to grow 137% (vs. 462% in 1Q24, and expectations of 76% in 3Q24). Reported earnings have beaten estimates for the past 5 quarters. 90.2% of the S&P 500's market cap has reported. 2Q expectations are for revenues to grow 5.1% and EPS by 11.3%. Growth among groups varies significantly, as shown in the table below (a blend of conse ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights significant changes in futures positions among various market participants, indicating a shift towards flattener positions in the back end and steepener positions in the front end [5][22][19] - There were notable inflows in equities, particularly from private investors, with Japan and the Caribbean being the top Treasury buyers in June [1] - Large commercial banks saw an increase in deposits and cash assets, while their holdings in UST/Agency and MBS also rose [42] Summary by Sections CFTC Non-Commercial Futures Positions - Non-commercials removed $20.6 billion in the front end and added $5.6 billion in the back end, resulting in a total of $26.2 billion of a flattener position [5][9] - The breakdown of front-end positions included SOFR (-$2.4 billion), TU (-$2.1 billion), and FV (-$2.1 billion) [9] Traders in Financial Futures - Asset managers put on $8.8 billion of a steepener position, increasing their net longs in FV contracts to the highest level in six months [2][16] - Leveraged funds added $9.0 billion of a steepener position, increasing their net shorts in TY contracts to the highest level in six months [2][19] Primary Dealer Positions - Dealers added $2.7 billion in the front end and $22.3 billion in the back end, resulting in a total of $19.6 billion of a flattener position [22][26] - Dealers decreased their net shorts in TY contracts to the lowest level in six months [26] Large Commercial Bank Positions - Deposits increased by $45.7 billion, and cash assets rose by $6.3 billion, with UST/Agency holdings increasing by $18.0 billion and MBS holdings by $16.4 billion [42] Foreign Central Bank Positions - Foreign Central Bank UST holdings decreased by $16.9 billion, while Agency/MBS holdings decreased by $0.4 billion [47]