Core Viewpoint - The market's expectation for a Federal Reserve interest rate cut in December has significantly reversed, driven by comments from multiple Fed officials supporting a rate cut due to a weakening labor market and declining consumer confidence [1][2][4]. Group 1: Federal Reserve Officials' Statements - At least four Federal Reserve officials have publicly expressed support for a rate cut in December, indicating a shift towards a more dovish stance within the Fed [2][4]. - Fed Governor Stephen Milan stated that the rising unemployment rate is a result of overly tight monetary policy and emphasized the need to lower rates to neutral levels [2]. - New York Fed President John Williams noted that there is still room for further rate cuts as the labor market cools [4]. Group 2: Economic Indicators - Recent employment data showed mixed results, with non-farm payrolls increasing by 119,000, significantly above the market expectation of 50,000, but the unemployment rate rose by 0.1 percentage points to 4.4%, the highest level since November 2021 [4][5]. - The consumer confidence index fell to 88.7 in November, down 6.8 points from October, marking a seven-month low [5]. - Retail sales in September grew by 0.2% month-on-month, a slowdown of 0.4 percentage points compared to the previous month, and below expectations [5]. Group 3: Market Expectations and Predictions - The probability of a 25 basis point rate cut in December has surged to 84.7%, an increase of 45.6 percentage points from the previous week [4]. - Analysts suggest that if the market maintains a rate cut probability above 70%, Fed Chair Jerome Powell may align with the rate curve and support a December cut [5]. - Morgan Stanley predicts that the Fed will cut rates by 25 basis points in both December and January [5][6]. Group 4: Internal Divisions within the Federal Reserve - Despite the growing dovish sentiment, there remains significant internal division within the Federal Open Market Committee (FOMC), with some regional Fed presidents expressing concerns about persistent inflation [7]. - The core conflict within the Fed revolves around the inability to bring inflation down to target levels while also observing signs of labor market weakness [7]. - Analysts indicate that the Fed is facing its most severe internal divisions in nearly 30 years, complicating its decision-making process [7].

Group 1 - The core viewpoint is that the Hong Kong stock market's technology sector is experiencing marginal benefits, driven by AI and non-ferrous metal sectors, despite macroeconomic uncertainties [1] - The potential for a "preventive rate cut" by the Federal Reserve may provide liquidity support for growth-oriented technology sectors [1] - Structural opportunities are emerging in the industry, with the AI industry chain benefiting from global technological upgrades, and leading technology companies showing potential for valuation recovery [1] Group 2 - The Hong Kong Technology ETF (513020) tracks the Hong Kong Stock Connect Technology Index (931573), focusing on technology-themed companies traded through the Hong Kong Stock Connect [1] - The index primarily covers core technology sectors such as information technology, electronic components, and interactive media and services [1] - Some sub-sectors within the Hong Kong technology sector are already showing signs of supply and demand improvement after a period of consolidation in the fourth quarter [1]

Core Viewpoint - The Hong Kong stock technology ETF (513020) has seen a rise of over 0.5% as of November 25, indicating a positive trend in the market despite macroeconomic uncertainties [1] Group 1: Market Trends - The report from China Merchants Hong Kong highlights that marginal benefits for Hong Kong stocks are accumulating, with the technology and non-ferrous metal sectors showing active performance [1] - The potential for a "preventive rate cut" by the Federal Reserve may provide liquidity support to the market [1] Group 2: Technology Sector Insights - The Hong Kong stock technology ETF (513020) tracks the Hong Kong Stock Connect Technology Index (931573), which focuses on technology-themed listed companies traded through the Stock Connect channel [1] - The index covers high-growth areas such as internet services, electronic manufacturing, communication equipment, and biotechnology, selecting 30 representative companies with technological leadership and continuous innovation capabilities [1] - Key evaluation metrics for the index include research and development investment intensity and revenue growth indicators, showcasing a diversified industrial layout characterized by "software and hardware synergy, new consumption scenarios, innovative drug development, and smart vehicle technology" [1]

Group 1 - The ADP employment data for October shows an increase of 42,000 jobs, the largest gain since July 2025, exceeding the market expectation of 28,000 jobs [1][2] - The report alleviates concerns from the Federal Reserve regarding labor market deterioration and reverses a two-month decline in employment figures [2] - Job growth is concentrated in labor-intensive sectors such as trade, transportation, public utilities, and education and health services, while knowledge-intensive sectors like information services and professional services are experiencing contractions [2][3] Group 2 - The manufacturing sector has seen job losses due to economic slowdown and high inventory levels in industries like consumer electronics and automotive, leading to production cuts and layoffs [3] - Despite the positive private sector job growth, the overall hiring scale remains "moderate," with small and medium-sized enterprises, which contribute 75% of U.S. jobs, experiencing a six-month decline in employment [3][4] - The ISM non-manufacturing PMI reached a new eight-month high of 52.4 in October, indicating better-than-expected performance in the services sector [3][4] Group 3 - The Federal Reserve is expected to continue interest rate cuts in December, with a 62.5% probability of a 25 basis point cut, as the focus on employment outweighs inflation concerns [4] - The potential for inflation to rise due to tariffs remains a concern, but the current economic risks are perceived to be greater than inflationary pressures [4]

Group 1: Market Overview - The market experienced a pullback after a rally, with small-cap stocks gaining strength while large-cap stocks weakened [1] - Major indices showed divergence, with the STAR Market 50 index leading the decline at 3.2%, while the CSI 1000 index led the gains at 1.18% [1] Group 2: Manufacturing Sector - The October manufacturing PMI fell to 49.0%, a decrease of 0.8 percentage points, indicating contraction due to pre-holiday demand release and external factors [2] - Production and new orders indices also declined, with production at 49.7% (down 2.2 points) and new orders at 48.8% (down 0.9 points) [2] - High-tech manufacturing, equipment manufacturing, and consumer goods industries maintained expansion with PMIs of 50.5%, 50.2%, and 50.1% respectively [2] Group 3: U.S. Federal Reserve Policy - The Federal Reserve lowered the benchmark interest rate by 25 basis points to a range of 3.75% to 4.00%, marking the second consecutive cut [3] - The Fed's statement indicated a moderate expansion in economic activity and persistent high inflation, with employment growth slowing [3][4] - Despite hawkish signals from Powell, there remains room for further rate cuts, which could lead to a return to a low-interest-rate environment globally [4] Group 4: Economic Outlook - The U.S. economy is showing signs of "stagflation," with employment risks increasing, but the likelihood of significant inflation remains low [4] - China's economy has been stabilizing since Q4 of last year, supporting the potential for RMB appreciation and increased foreign capital inflow [4][5] - Overall, despite recent market adjustments, the fundamentals remain supportive, with improving corporate earnings and a favorable outlook for the manufacturing sector [5]

Group 1 - The Federal Reserve announced a 25 basis point interest rate cut, marking the first reduction since December 2024, shifting U.S. monetary policy towards easing [1] - Following the rate cut, global markets reacted with U.S. stocks initially declining before rising, gold prices fluctuating, and the Chinese yuan strengthening [1][3] - A-share semiconductor and communication equipment sectors rose against the trend, while gold-related stocks generally fell [3] Group 2 - Historical data shows that during preventive rate cut cycles, A-share technology and core consumer assets perform well, with U.S. tech stocks rising nearly 30% within six months after the 2019 rate cut [3] - The rate cut is expected to lower corporate financing costs, boosting profit expectations, particularly benefiting capital-intensive sectors like semiconductors and artificial intelligence [3] - However, bank stocks may face pressure due to narrowing interest margins [3] Group 3 - Gold prices initially surged to a historical high of $3,700 per ounce before retreating to around $3,650 after the rate cut, reflecting a "buy the rumor, sell the news" phenomenon [3] - Long-term trends indicate that gold typically performs well during rate cut cycles, with an average increase of over 5% in the six months following the first cut since 1990 [3][5] - Deutsche Bank raised its 2026 gold price forecast to $4,000 per ounce, citing strong central bank demand and expectations of a weaker dollar [5] Group 4 - The bond market reacted inversely to the rate cut, with new bond yields decreasing, making existing high-yield bonds more attractive [5] - The U.S. 10-year Treasury yield fell from 4.3% to 4.0% before the cut, leading to a price increase, but some investors took profits post-announcement, causing a slight price correction [5] - The rate cut reduced the interest rate differential between China and the U.S., alleviating depreciation pressure on the yuan, which appreciated from 7.15 to around 7.12 against the dollar [5] Group 5 - The yuan's movement is not unidirectional; if the People's Bank of China cuts rates or if the U.S. economy performs unexpectedly well, the yuan may come under renewed pressure [7] - While a stronger yuan benefits imports, it may weaken the competitiveness of export goods, prompting foreign trade companies to use hedging tools to mitigate risks [7] - The Fed's rate cut acts as a catalyst for broader market reactions, influencing asset allocation for ordinary individuals [7]

Core Viewpoint - The Federal Reserve announced a 25 basis point interest rate cut, lowering the target range for the federal funds rate to 3.75% to 4.00%, marking the second rate cut in 2025 following a previous cut on September 17 [1][3] Group 1: Economic Conditions - The decision was made with a vote of 10 in favor and 2 against, highlighting a rare internal division within the Fed [1] - There is a notable divergence among Fed officials, with some advocating for a more aggressive 50 basis point cut while others express concerns over persistent inflation [3] - The U.S. economy faces complex challenges, including a soft labor market with slowing job growth and a slight increase in the unemployment rate, while inflation remains above the Fed's long-term target of 2% [3] Group 2: Data and Decision-Making Challenges - The ongoing government shutdown has resulted in the absence of key economic data, complicating the Fed's decision-making process [5] - The Fed's Chairman Powell acknowledged that the shutdown would "weigh on economic activity," and the lack of data creates additional difficulties for policy decisions [5][16] - The Fed is described as "driving in the fog," necessitating a slower decision-making pace due to the data vacuum [5] Group 3: Interest Rate Cut Implications - The recent rate cut is characterized as a "preemptive rate cut," supported by data indicating lower-than-expected inflation and significant employment weakness [7][8] - The Fed plans to end its balance sheet reduction (quantitative tightening) on December 1, marking the conclusion of three years of asset balance sheet contraction [8] - The decision to cut rates is closely linked to signals of liquidity pressure in the financial system, transitioning from "excessively ample" reserves to "adequate" or even "structurally tight" conditions [12] Group 4: Market Reactions and Global Impact - The rate cut is expected to gradually lower mortgage, auto loan, and credit card rates for American households, with the average 30-year mortgage rate dropping from 6.6% to 6.2% [17] - For businesses, reduced financing costs may stimulate investment, injecting vitality into the economy [17] - On a global scale, the Fed's rate cut will influence capital flows, potentially benefiting emerging markets if the dollar weakens [19] Group 5: Future Uncertainties - The Fed faces three main uncertainties moving forward, primarily the data void caused by the government shutdown, complicating accurate economic assessments [21] - Balancing inflation and employment remains a challenge, with tariffs potentially continuing to exert upward pressure on inflation [21] - Leadership changes within the Fed pose risks, as Powell's term ends in May 2026, with potential successors impacting future rate cut paths [23]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The long - term upward logic of copper remains unchanged despite the transformation of new and old driving forces. Although the supply is tight and the traditional consumption growth rate has declined, the growth of new consumption areas such as energy storage batteries, new energy vehicles, and future AI will offset the negative impact of the decline in traditional consumption [2][6]. 3. Summary According to the Table of Contents 3.1 Copper Market Overview 3.1.1 Market Review In October, copper prices entered an accelerated upward phase, with the lowest price on October 10 reaching $10,374 per ton for LME copper or 82,630 yuan per ton for SHFE copper, and the highest reaching the historical high pressure level of $11,094 per ton for LME copper or 88,700 yuan per ton for SHFE copper. Macroscopically, the US government shutdown and Trump's tariff statement had limited impact. Fundamentally, the tightness of copper mines intensified, and domestic production declined. Consumption was weak, and downstream acceptance of high prices was low [5][11][12]. 3.1.2 Market Outlook In terms of supply, the incremental supply of copper mines is expected to be 50,000 tons, lower than 2024. The overall supply of copper mines is more tense, and the global refined copper production is expected to increase by 950,000 tons, with a year - on - year growth of 3.53%. The consumption growth rate is expected to drop to 3.4%. In terms of price, the long - term loose monetary policy in the US is positive, and the support level is 85,000 - 86,000 yuan per ton, with a short - term pressure level of 89,000 - 90,000 yuan per ton [13][14]. 3.1.3 Strategy Recommendation Unilateral: Adopt the idea of buying on dips, with a support level of 85,000 - 86,000 yuan per ton and a short - term pressure level of 89,000 - 90,000 yuan per ton. Arbitrage: If the export window opens, exit the positive spread temporarily and re - enter later. Options: Wait and see [7]. 3.2 Sino - US Relations Eased, and the Expectation of Fed Rate Cuts Strengthened On October 10, Trump's tariff statement had limited impact, and Sino - US relations later eased. On October 29, the Fed cut interest rates by 25 basis points, but the probability of a December rate cut dropped. The US employment data was weak, and the CPI was relatively stable. Domestically, the manufacturing PMI rebounded slightly, but consumer growth was weak [23]. 3.3 Copper Mine Disturbances Increased, and the Tight Supply Situation was Difficult to Alleviate 3.3.1 Sharp Drop in the Incremental Supply of Copper Concentrates In 2025, the global incremental supply of copper concentrates is expected to be about 50,000 tons, with a year - on - year growth of 0.22%. The supply - side disturbances increased, and the processing fee is likely to be less than or equal to $0 per ton. Some major mining companies reduced their production plans, while the import volume of copper concentrates in China increased [34][35][36]. 3.3.2 Decline in the Start - up of Recycling Processing Enterprises, and the Tight Supply of Scrap Copper was Temporarily Alleviated The global supply of scrap copper did not decrease, but the trade flow changed. The import volume of scrap copper in China was relatively stable, but the growth rate was lower than last year. The tax - refund policy affected the start - up of recycling copper rod enterprises. The import volume of anode copper decreased, while the import volume of scrap copper ingots increased [44][45][47]. 3.3.3 Accelerated Transmission of Raw Material Supply Shortage to the Smelting End The global refined copper production is expected to increase by 950,000 tons, with a year - on - year growth of 3.53%. Overseas smelters cut production, and domestic production also declined due to factors such as maintenance and anode plate shortage. The import of refined copper in China increased in September, but the inflow speed may slow down [50][51][53]. 3.4 Consumption Analysis 3.4.1 Obvious Decline in the Growth Rate of Traditional Consumption - **Real Estate Market**: From January to September, the sales area and completion area of new commercial housing decreased year - on - year. The consumption of electrolytic copper was still dragged down. It is estimated that the copper consumption will decrease by 123,700 tons to 1,113,700 tons [61][62]. - **Power Grid and Power Projects**: From January to September, the investment in the power grid increased by 9.9% year - on - year, and the investment in power projects increased by 0.6%. High copper prices inhibited the procurement of downstream enterprises, and the export of copper cables may decline in October [67][68]. - **Home Appliances**: The production schedule of household air - conditioners in November decreased significantly year - on - year. It is expected that the annual consumption growth rate of air - conditioners will drop to 5%, and the copper consumption of white goods will increase from 2,168,300 tons to 2,267,800 tons [78][81]. 3.4.2 Resilience of Automobile Consumption - **Domestic Automobile Consumption**: In September, domestic automobile production and sales increased significantly. From January to September, the production and sales of new energy vehicles increased by 35.2% and 34.9% respectively. The sales of new energy vehicles are expected to be driven by the policy of resuming the purchase tax in 2026 [86][88]. - **New Energy Vehicle Consumption in Europe and the US**: From January to August, global new energy vehicle sales increased by 23.46% year - on - year. In the US and Europe, new energy vehicle sales also showed growth trends. It is estimated that the global new energy vehicle copper consumption will increase from 1,220,800 tons in 2024 to 1,401,100 tons in 2025 [95][96]. 3.4.3 Unexpected Growth of Wind and Solar Power Generation - **Photovoltaic Installation**: From January to September, China's new photovoltaic installation capacity increased by 49.34% year - on - year. The China Photovoltaic Industry Association raised the annual new installation capacity forecast. It is estimated that the global new photovoltaic installation capacity will reach 630GW in 2025 [104][108]. - **Wind Power Installation**: From January to September, China's new wind power installation capacity increased by 56.16% year - on - year. It is predicted that China's new wind power installation will reach 105 - 115GW in 2025, and the global new wind power installation capacity will increase to 138GW [119]. 3.4.4 Explosive Growth of Lithium - Ion Copper Foil In 2024, the global copper foil production capacity was 2,544,000 tons. From January to September 2025, China's lithium - ion copper foil production was 624,300 tons, with a year - on - year growth of 38%. If calculated according to a 35% consumption growth rate, the annual production will reach 853,800 tons, driving domestic consumption by 1.38% [126]. 3.4.5 Consumption Summary It is expected that the global consumption growth rate will drop to 3.4%. Overseas demand remains stable, while domestic demand weakens marginally. Processing enterprises and downstream raw material inventories are low, and there will be restocking demand if prices decline [131]. 3.5 Supply - Demand Balance Sheet In 2025, the growth of copper mines is expected to be 50,000 tons, and the refined copper production will increase by 950,000 tons. The consumption growth rate will drop to 3.4%. The supply gap of copper concentrates is expected to expand to 680,000 tons, and the refined copper is expected to have a surplus of 376,000 tons, mainly in the US. Domestically, the consumption growth rate is expected to decline from October to December [135][136].

Core Viewpoint - The Federal Reserve is transitioning from a "preventive rate cut" approach to a "wait-and-see" stance, leading to increased uncertainty in short-term policy paths [1] Group 1: Federal Reserve's Rate Decisions - The Federal Reserve cut rates by 25 basis points to a range of 3.75%-4.00% during the October meeting, amidst a complex backdrop due to the U.S. government shutdown affecting key employment data [2] - The decision reflects a proactive approach to mitigate potential job market downturns, despite stable private sector employment indicators [2][3] - Internal divisions within the Federal Reserve are growing, with some members advocating for more aggressive cuts while others suggest pausing [3] Group 2: Economic Indicators and Market Reactions - The market's expectation for a December rate cut has decreased from 82.4% to 63.8% following the October meeting, indicating a shift in sentiment [1] - The upcoming December decision will heavily depend on employment and inflation data post-government shutdown, with a focus on whether job market indicators show significant improvement [1][3] - Recent easing of U.S.-China trade tensions may alleviate inflationary pressures from tariffs, presenting a potential positive factor for the economy [3] Group 3: Monetary Policy and Market Conditions - The Federal Reserve announced it will stop balance sheet reduction starting December 1, as liquidity tightening signals have emerged in the U.S. money market [4] - Since the initiation of balance sheet reduction in June 2022, the Fed's balance sheet has contracted by $2.2 trillion, reducing its GDP ratio from 35% to approximately 21% [4] - The dollar index has shown signs of a rebound, and with the Fed's hawkish signals, market volatility risks are expected to increase, potentially impacting metal prices and emerging market assets [5]

Group 1: Macroeconomic Insights - The "15th Five-Year Plan" emphasizes the coexistence of strategic opportunities and challenges, highlighting the complexity of the external environment compared to the "14th Five-Year Plan" [5] - The goals of the new plan have expanded from six to seven areas, with a focus on "high-quality development" and "significantly improving the level of technological self-reliance" [5] - The plan aims to enhance domestic consumption and emphasizes the importance of technological innovation for economic growth [5] Group 2: Global Economic Trends - The Federal Reserve's recent decision to cut interest rates by 25 basis points reflects a preventive approach amid uncertainties in the labor market due to the government shutdown [6] - Despite the absence of critical employment data, the Fed's decision indicates a proactive stance against potential economic downturns [6] - The U.S. stock market continues to reach historical highs, suggesting a sustained period of financial easing [6] Group 3: Company-Specific Performance - Gotion High-Tech reported a significant increase in revenue and profit for Q3 2025, with revenue of RMB 10.11 billion and a net profit of RMB 2.17 billion, marking a year-on-year growth of 20.7% and 1434% respectively [11] - The company maintains its annual shipment target of 100 GWh, with a strong performance driven by high demand for its products [11] - Midea Group's Q3 performance exceeded expectations, with revenue and net profit growing by 10.1% and 9.0% respectively, supported by a recovery in overseas markets [14] Group 4: Industry Outlook - The global energy storage market is expected to grow significantly, with a projected annual growth rate of 40-50% through 2026 [16] - The demand for high-energy-density products is anticipated to drive improvements in profit margins for companies in the energy sector [12] - The clean energy sector is showing strong performance, with a 52% increase in revenue for clean energy products, indicating a positive trend for future growth [17]