Economic Indicators - The yield on the benchmark 10-year Treasury is approaching 4%, with economists expecting consumer prices to rise slightly more than in July, with an annualized rate just under 3% [1] - A surprise drop in wholesale prices (PPI) was reported for August, falling by 0.1%, contrary to consensus estimates which expected an increase [1] Market Reactions - There is anticipation regarding the upcoming CPI report, as it could influence market trends and interest rates [2][4] - Despite the significant PPI data, the market's reaction was surprisingly muted, with notable movements from major companies like Apple [4] Future Projections - If the current trend continues, there may be indications of deflation, but it is too early to make definitive claims [3] - The data suggests that interest rates may continue to decline if similar reports are released in the future [3][5] - The potential for the Federal Reserve to cut rates is being considered, especially if the upcoming data does not contradict current trends [5][6]

Chinese companies that do business with American consumers are dealing with tariffs and rising inflation. But for those trying to make a living at home, they're fighting just the opposite. Our Uni Yun explains.Chef Wong is cooking up his specialty fried pigeon. Not in his restaurant, but out on the sidewalk. Hotels across the country have started selling food from their restaurants on the street.This is a way to drum up business amid a consumer spending slump. High-end Beijing hotel Bayon Grand sets up stal ...

China's latest price report showed a flicker of hope in its fight against deflation: Here’s your Evening Briefing. https://t.co/quxHvP9SEY ...

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The conference call primarily discusses the economic situation in China, particularly focusing on the concept of "Anti-involution" and its implications across various sectors [2][5][9]. Core Insights and Arguments - **Economic Scenarios**: - **Worst Case**: The economy may revert to deflation after temporary price increases due to weak final demand [3]. - **Less Optimal Scenario**: Rapid reflation could occur, but misallocation of resources may lead to renewed competition and price pressures [3]. - **Base Case**: Deflation is expected to continue into 2026, with gradual reflation [3]. - **Ideal Scenario**: A more robust and sustainable reflation could emerge as economic rebalancing accelerates [3]. - **Structural Reforms**: - Emphasis on the need for comprehensive reforms in the fiscal system, realignment of macro targets, and revamping performance evaluations to address systemic overcapacity issues [5][6][7]. - **Key Catalyst**: The upcoming 4th Plenary Session in October is highlighted as a critical event that may clarify structural reforms outlined in the 15th Five-Year Plan [8]. Sector Implications - **Priority Sectors**: - The sectors identified with the highest urgency for reform include Electric Vehicle (EV) batteries, airlines, and cement, with varying degrees of profitability and operational efficiency challenges [10][12]. - **Utilization Rates and Challenges**: - Various sectors have different utilization rates, with coal at 80%, steel at 85%, and cement at 45%. Challenges include overcapacity, regulatory hurdles, and market dynamics [12]. - **Market Concentration**: - The market concentration varies significantly across sectors, with SOEs holding substantial market shares in industries like airlines (80%) and cement (70%) [10][12]. Additional Important Insights - **Trade Dynamics**: - There is a noted slowdown in container ship movements from China to the US, indicating a potential payback from previous export front-loading [13]. - **Consumer Goods Sales**: - Sales growth in the auto and home appliance sectors has declined due to strict management of trade-in subsidies [15]. - **Property Market**: - Secondary housing sales showed improvement in August, attributed to incremental easing of property policies in tier-1 cities [18][21]. - **Construction Activity**: - There has been a renewed decline in cement shipments and subdued rebar demand, indicating sluggish construction activities [25][26]. This summary encapsulates the critical insights and implications discussed during the conference call, providing a comprehensive overview of the current economic landscape and sector-specific challenges in China.

Fiscal Policy & Economic Growth - The analysis suggests tariffs are running at an annual rate between $400 billion and $500 billion, potentially improving the deficit, but real GDP growth is considered the key to significantly reducing the deficit as a percentage of GDP [1] - The report anticipates real GDP growth will surprise on the high side of expectations later in the year and into 2026, driven by innovation platforms like robotics, energy storage, AI, multiomic sequencing, and blockchain technology, all catalyzed by AI [1] - The analysis highlights deregulation, particularly in crypto, AI, and nuclear energy, as a significant factor for economic growth, with tax changes encouraging manufacturing and innovation through accelerated depreciation schedules and full expensing of equipment, R&D, and software [1] Inflation & Monetary Policy - The report indicates that while inflation may seem stuck in the 2% to 3% range, innovation-driven productivity gains could lead to deflation in the coming years [2] - The analysis points out that M2 money supply growth has significantly dropped compared to the COVID boom, and the velocity of money is declining, potentially diffusing inflationary pressures [2] - The yield curve, measured by the two-year Treasury yield relative to the three-month Treasury yield, indicates tight monetary policy, which is expected to have disinflationary or deflationary effects [3] - True inflation CPI is reported at 19%, even with tariffs factored in, and consumer inflation expectations are expected to decline [3] Market Indicators & Investment Strategy - The analysis notes that manufacturing has been contracting for the last three years, and services are not in great shape, signaling potential economic concerns [4] - The report highlights that AI-powered capital spending is increasing, supported by new tax rules, while the trade deficit is being addressed [5] - The analysis observes that pending home sales are deteriorating, and new home inventory is high, potentially leading to price cuts and impacting the CPI [5] - The report suggests that the return on investment in the US is expected to increase due to innovation, tax laws, and deregulation, potentially strengthening the dollar [5] - The analysis notes that corporate profits are healthy, but quality of earnings and harnessing new technologies will be crucial for future growth [5] - The report observes that commodity prices are going nowhere, and gold is breaking out to all-time highs relative to metals, possibly signaling deflationary concerns [5]

Market Overview - The current market is characterized by a split, with gold prices rising, bonds declining, and stocks fluctuating as new sectors emerge to replace technology [1] - The end of a historic yield-curve inversion and a potential Federal Reserve cutting cycle are significant for investors, particularly in precious metals and bonds [1][2] Gold and Bonds - Traditional bond benchmarks may not provide the safety that investors expect, while gold is experiencing a breakout due to renewed deflation risks [2] - Central bank gold buying and ETF flows are important factors for investors to consider when balancing inflation and deflation in their portfolios [2] Dollar and Inflation - The purchasing power of the dollar has decreased by nearly 50% over the past 25 years, while gold has increased by over 1,052% in the same period [4][5] - The dollar's decline is attributed to expansive monetary policies and rising national debt, which has grown from $5.6 trillion in 2000 to over $36.2 trillion in 2025 [8][9] Primerica Inc. (PRI) Performance - Primerica provides term life insurance and has shown strong historical performance, with earnings per share (EPS) growing at a compound annual rate of 15.6% over the past decade [10] - As of June 30, Primerica insured over 5.5 million lives and had approximately three million client investment accounts, with total adjusted operating revenue increasing by 7.4% year-over-year to $796 million [11] - The company's adjusted EPS of $5.46 grew 10.3% compared to the previous year, exceeding analyst consensus by $0.26 [12] - Primerica is expected to grow EPS at about 10% annually over the next five years, driven by sales force expansion and share repurchases [13]

Economic Cycles - The economy functions like a machine, driven by short-term and long-term debt cycles [4] - Short-term debt cycles, typically lasting 5 to 8 years, are primarily controlled by the central bank through interest rate adjustments [5] - These cycles involve expansion fueled by credit, leading to inflation, followed by contraction (recession) when the central bank raises interest rates [1][2][3] - Long-term debt cycles occur because debts rise faster than incomes over decades, leading to a debt burden [6] - The ratio of debt to income is called the debt burden, which remains manageable as long as incomes rise [7] Debt and Credit - Spending increases are fueled by credit, which can be created instantly [1] - When credit is easily available, there's an economic expansion; when it's not, there's a recession [4] - Rising incomes and asset values help borrowers remain creditworthy for a long time, even with accumulating debt [8] - At some point, debt repayments grow faster than incomes, forcing people to cut back on spending, leading to a reversal of the cycle [9] - Debt burdens become too big, leading to deleveraging, as seen in 2008 in the United States and Europe [10][11] Inflation and Deflation - Inflation occurs when spending and incomes grow faster than the production of goods, causing prices to rise [1] - The central bank raises interest rates to combat inflation [2] - Deflation occurs when people spend less, causing prices to go down, leading to a recession [3] Human Behavior - People have an inclination to borrow and spend more instead of paying back debt, pushing the economy [5] - Lenders freely extend credit because everyone thinks things are going great, focusing on rising incomes and asset values [6] - People borrow huge amounts of money to buy assets as investments, causing their prices to rise even higher, creating a boom and potentially a bubble [8][7]

Market Overview & Liquidity - The market's recent behavior is viewed as a reality check rather than a broad reflection of underlying issues [2] - The narrative of liquidity driving the market has been disconnected from fundamentals [1] - Excess savings are estimated to be around ¥6 to 7 trillion, which is smaller than many anticipate [8] - The migration of these savings into the equity market is slower than expected, with only approximately ¥300 billion in July and August [9] Policy & Regulation - Policymakers are providing guardrails rather than brakes, indicating a more targeted and earlier intervention approach compared to previous boom-bust cycles [10] - Potential policy moves, including monetary and fiscal policies, are seen as cyclical tools to cushion the economy [2] - Structural moves to encode reflation and rebalance are tied to the upcoming Fourth Plenum and the Five-Year Plan [3][4] - The need for significant stimulus measures may be lessened by the rally in Chinese equities [3] Economic Outlook & Challenges - High-frequency data, including housing exports and physical impulse, indicate soft prints in August [2] - Deflation is expected to be persistent, potentially lasting until the end of next year [12][14] - The second half of the year is forecasted to be softer, with subdued nominal growth [12][14] - Achieving a full pull-through to wages and employment for inflation is challenging [9][16] Sector-Specific Insights - The solar sector is identified as Exhibit A for anti-evolution, with a consolidation plan financed by industry funds to absorb inventory [12] - GreenTech, EVs, power storage, smart manufacturing (AI, industrial robotics), and "new productive forces" (humanoid robots, self-driving cars) show micro-level positivity, particularly in Shenzhen [15]

As you've been discussing September, starting with volatility, we're looking at ways to spread risk through ETFs. I'm Leslie Picker in for Dominic 2. Joining me now is Brian Vancronhite, senior portfol portfolio manager at Allspring Global Investments.Brian, thank you for being here. Let's just go ahead and set the macro stage. You are not convinced the Fed is a lock to cut rates this month.>> Yeah, that's correct. The Fed has 90% probabilities that they're going to cut this month, and they probably do. Tha ...

Global Economic Outlook - 全球经济分裂为通胀和通缩两个极端，给经济带来前所未有的挑战 [2] - G20 国家的通货膨胀率仍然维持在 3.8%，预计至少在 2026 年才能达到中央银行的目标 [4] - 中国面临需求驱动型通缩，房地产市场崩溃导致消费者信心下降 [22][23][24] Inflation Drivers - 疫情后的通货膨胀是由前所未有的财政刺激、供应链混乱和宽松的货币政策同时冲击造成的 [5][6] - 欧洲央行的分析表明，2022 年企业利润占欧元区通货膨胀的三分之二，而历史平均水平为三分之一 [10] - 乌克兰和俄罗斯合计供应全球 30% 的小麦、20% 的玉米和 80% 的葵花籽油，战争扰乱了这些资源流动，导致商品价格上涨 [10][11] - 美联储研究估计，乌克兰战争直接导致 2022 年全球通货膨胀增加 1.3 个百分点，相当于全球经济额外增加 1.3 万亿美元的成本 [12] Deflationary Pressures in China - 中国房地产市场占经济的 30%，占家庭财富的 70%，房地产价格下跌 15% 到 30% 不等 [23] - 中国现在生产了全球 70% 的太阳能电池板、60% 的电动汽车和 75% 的电池，国内需求疲软导致产能过剩，只能以极低的价格出口 [25][26] - 摩根大通估计，中国的通货紧缩可能会使全球核心商品通货膨胀率降低 70 个基点 [31] Central Bank Policies and Divergence - 美联储在 18 个月内将利率从 0% 提高到 5.5%，这是 40 年来最快的紧缩周期 [20] - 中国人民银行正在放松货币政策，但由于信心不足和债务负担沉重，效果不佳 [41] - 各国央行政策分化，美国和欧洲的债券可能因降息而上涨，而中国的债券收益率受到抑制，日本的收益率则在几十年后首次上升 [43] Structural Inflationary Forces - 气候变化导致干旱摧毁农作物，洪水破坏供应链，热浪屠杀牲畜，所有这些都导致食品价格上涨 [35][36] - 能源转型需要大量的铜、锂、钴和稀土，对这些材料的需求正在爆炸式增长，而供应仍然受限 [37] - 由于对石油和天然气的投资减少，传统能源供应变得更加紧张，任何地缘政治冲击都会导致价格飙升 [37] Crypto Market Implications - 持续的通货膨胀，但又不足以触发 20% 的利率，对加密货币来说是一个有利的环境 [45] - 中国经济面临通缩，促使富裕的中国人寻求在中国大陆以外的价值储存手段，加密货币提供了一个后门 [46] - 各国央行政策分化造成波动和不确定性，这正是加密货币作为一种非相关资产发光发热的时候 [46][47]