Let's bring in our next guest. We're going to talk about trade, tariff agreements, everything that we've been hearing this morning. Roger Altman is the founder and senior chairman of Evercore ISI.And Roger, thanks for coming in this morning. >> Thanks for having me. >> We were just looking at some of the energy stocks with Dom um that are trading up pretty sharply on what Europe is potentially going to be buying in terms of of of energy deals from the United States.But it's not just that. It's also defense ...

Bitcoin Potential - Bitcoin is presented as a $100T+ idea [1] - Bitcoin is suggested as the only thing that works as advertised [1] Economic Critique - The report questions the validity of economic education, suggesting it might be propaganda [1] - GDP growth is questioned as potentially being a lie [1] - Houses are framed as broken savings technology rather than homes [1]

Summary of Key Points from the Conference Call Industry Overview - The report discusses the performance of the Chinese stock market, specifically the MXCN and CSI300 indices, which gained 3.7% and 1.1% respectively during the week. The Health Care sector outperformed, while Real Estate and Value sectors lagged behind [1][3][8]. Economic Indicators - China's Q2 GDP growth was reported at 5.2% year-over-year, slightly above market consensus of 5.1% and in line with internal forecasts. The full-year GDP growth forecast for 2025 has been adjusted to 4.7% [1][55]. - Policymakers are expected to discuss economic policies for the second half of the year in the upcoming Politburo meeting, with no significant stimulus anticipated due to robust H1 growth [1]. Sector Performance - Health Care and Growth sectors showed strong performance with increases of 8.6% and 4.7% respectively, while Real Estate and Value sectors saw declines of 4.7% and 2.1% [3][8]. - The forward price-to-earnings ratios for MXCN and CSI300 are 12.1x and 13.4x, with expected EPS growth of 5% for 2025 and 14% for 2026 for MXCN [9]. IPO Market Insights - The report highlights a resurgence in Hong Kong IPOs, with increased participation from global long-term capital as cornerstone investors [10][13]. - The demand-to-offer ratio for Hong Kong IPOs has dropped to a historical low, indicating strong retail investor demand [17]. - Newly listed companies with significant growth potential tend to perform better post-IPO, with average returns of approximately 10% on the first trading day and 40% within three months [20]. Fund Flows and Positioning - Global fund allocation in Chinese equities has recovered, with gross allocation to China increasing to 5.2% as of July 2025, up from 4.5% in January 2025 [30][31]. - Net allocation to China also increased to 7.2%, indicating a positive trend in investor sentiment towards Chinese markets [33]. Regulatory Environment - The State Administration for Market Regulation (SAMR) has urged food delivery companies to engage in rational competition and improve the regulation of promotional activities [1]. - Recent meetings between President Xi and business leaders suggest a potential easing of policies towards private enterprises [50]. Conclusion - The overall sentiment in the Chinese market appears cautiously optimistic, with strong sector performances in Health Care and Growth, a recovering IPO market, and increasing fund allocations towards Chinese equities. However, challenges remain in the Real Estate sector and regulatory scrutiny continues to shape market dynamics [1][3][10][30].

Investment Rating - The report raises the full-year 2025 GDP growth forecast to 4.8% from a previous estimate, indicating a positive outlook despite anticipated slower growth in the second half of the year [1][3]. Core Insights - The report highlights a stronger-than-expected real GDP growth of 5.2% year-on-year in the second quarter, driven by fiscal measures and local government bond issuance [2][3]. - However, a slowdown in growth is expected in the second half of 2025, with projections of 4.5% in the third quarter and 4.2% in the fourth quarter due to weaker exports, fading fiscal impulse, and ongoing deflation [3][11][12]. Summary by Sections Economic Growth - The report notes that the net impact of fiscal rollout has been more positive compared to export front-loading, with 85% of Rmb2 trillion in bonds issued in the first half of the year to alleviate local government liquidity stress [2][3]. - The anticipated slowdown in export growth is expected to drag GDP growth by 60-70 basis points in the second half, with a significant impact from earlier export front-loading [3][4]. Fiscal Policy - The fading fiscal impulse is highlighted, as the front-loaded nature of government bond issuance in the first half means less fiscal support in the second half, especially compared to a high base from the previous year [11][12]. - An additional fiscal package is expected in the fall, estimated at Rmb0.5-1 trillion, but this is considered relatively small given the current economic context [11][12]. Deflationary Pressures - The report emphasizes the persistence of deflation, with nominal GDP growth falling to 3.9% year-on-year in the second quarter, indicating weaker corporate earnings and potential impacts on household consumption [12][13]. - The GDP deflator is projected to remain subdued, with expectations of -0.9% year-on-year in the second half of 2025 and -0.7% in 2026, reflecting ongoing deflationary pressures [13].

Investment Rating - The report indicates a cautious outlook on near-term growth momentum despite a strong GDP print, suggesting the need for more policy stimulus to boost investment demand and support the labor market [6]. Core Insights - China's 2Q25 GDP grew by 5.2% year-on-year, slightly below the 5.4% growth in 1Q25, but above market consensus of 5.1% [1][8]. - Industrial production (IP) showed a surprising increase to 6.8% in June, driven by resilient export activities, with manufacturing IP accelerating to 7.4% [3][8]. - Retail sales growth moderated to 4.8% in June, lower than the previous month and consensus expectations, indicating potential weakness in domestic demand [4][8]. - Fixed asset investment (FAI) growth slowed to 2.8% year-to-date, with a significant contraction in property investment at -11.2% year-on-year [5][8]. - The urban unemployment rate remained stable at 5.0% in June, with disposable income per capita increasing by 5.1% year-on-year [10][11]. Summary by Sections Economic Growth - 2Q25 GDP growth was reported at 5.2% year-on-year, with a sequential increase of 1.1% quarter-on-quarter [1][8]. - In the first half of 2025, real GDP growth reached 5.3%, surpassing the annual policy target of "around 5%" [1]. Industrial Production - IP growth rose to 6.8% in June from 5.8% in May, with manufacturing IP accelerating to 7.4% [3][8]. - Growth was observed in 36 out of 41 industries, with notable increases in industrial robots and integrated circuits [3]. Retail Sales - Retail sales increased by 4.8% year-on-year in June, down from 6.3% in May, influenced by earlier promotions and subsidy halts [4][8]. - Catering services saw a significant slowdown, with growth dropping to 0.9% year-on-year [4]. Fixed Asset Investment - FAI growth moderated to 2.8% year-to-date, with a single-month growth of only 0.5% year-on-year [5][8]. - Property investment continued to decline sharply, with a contraction of -11.2% year-on-year [5]. Labor Market and Income - The urban unemployment rate remained unchanged at 5.0% in June, with average weekly hours worked at 48.5 [10][11]. - Disposable income per capita reached RMB 9,661 in 2Q, reflecting a 5.1% year-on-year increase [11].

Economic Performance - China's GDP grew by 5.2% in Q2 2025, surpassing the 5.1% forecast by economists, but down from 5.4% in Q1 [2] - The stronger-than-expected growth has alleviated immediate pressure on policymakers to implement further economic stimulus [1][3] Policy Outlook - Analysts suggest that additional stimulus measures may be delayed until September if economic momentum weakens further [3] - Previous stimulus efforts have shown partial effectiveness, with improvements in manufacturing activity and exports [4] Trade Relations - U.S. tariffs on Chinese imports were escalated to 145% in April, leading to supportive measures from Beijing [5] - A truce was reached in May, with both countries agreeing to roll back most tariffs, followed by a framework agreement in June [6] Economic Vulnerabilities - Economists have called for stronger fiscal action, recommending up to 1.5 trillion yuan in stimulus to support household spending and mitigate the impact of U.S. tariffs [7] - Despite signs of resilience, underlying vulnerabilities in the Chinese economy remain a concern [8] Investment Opportunities - Investors are encouraged to monitor China-based exchange-traded funds (ETFs) such as iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB) [9]

Economic Action Pillars - The executive branch is focusing on GDP growth [1] - The executive branch aims to replace structurally impaired entitlement programs [1] - The executive branch is emphasizing new era safe haven assets [1] Safe Haven Assets - The executive branch considers SPY (S&P 500 ETF) as a safe haven asset [1] - The executive branch views US housing as a safe haven asset [1] - The executive branch identifies BTC (Bitcoin) as a safe haven asset [1]

Investment Rating - The industry investment rating is In-Line for both HK and ASEAN financials, with a preference for high total shareholder return (TSR) stocks in Singapore and Hong Kong [6][4]. Core Insights - The macroeconomic environment is expected to dominate discussions in the second half of the year, particularly regarding the impact of interest rates and potential tariffs on China and Hong Kong, as well as supply chain relocations into ASEAN [2][3]. - Singapore banks are anticipated to perform well, potentially benefiting from a lower cost of equity if revitalization measures for Singapore's equity market are implemented [2]. - Defensive stocks are favored in the current climate, with UOB being the most preferred bank in Singapore, while HSBC and Standard Chartered are expected to perform well due to dividends, share buybacks, and high return on equity (RoE) [2][4]. Summary by Sections Singapore and Hong Kong Financials - Preferred stocks include SGX, UOB, HSBC, and Standard Chartered, while Hang Seng and BoCHK are least preferred [4]. - Target prices for preferred stocks are set at 15.90 for SGX, 90.00 HKD for UOB, and 121.50 HKD for HSBC, with current prices showing slight upside potential for SGX and UOB, but downside for HSBC [8]. - The average daily traded value for UOB is 199 million USD, indicating strong liquidity [8]. Emerging Markets (EM) ASEAN - The report indicates a less favorable outlook for EM in the near term, particularly for Indonesia, where economic risks and lower commodity prices are expected to limit loan growth [3]. - The Philippines is highlighted as a preferred EM, benefiting from resilient RoE and increased retail lending penetration, with BDO and BPI being the preferred banks [3][9]. - Target prices for preferred EM banks include 10,017.00 for BCA and 8,625.00 for BRI, with current prices showing significant upside potential [9]. Financial Metrics - The report estimates a 2025 RoE of 33.3% for Singapore banks, with a target price-to-earnings ratio (PER) of 33.1 for SGX [8]. - Malaysian banks are expected to show defensive characteristics, but with stretched valuations compared to Singapore banks [2][3]. - The estimated dividend yield on target prices for preferred banks ranges from 2.3% for SGX to 6.0% for UOB in 2026 [9].

Investment Rating - The report maintains a cautious outlook on global economic growth, with expectations of a slowdown due to tariffs and restrictive immigration policies [17][41]. Core Insights - The report highlights that tariff-induced inflation is expected to rise, impacting growth forecasts across various regions, particularly in the US and Euro area [17][41]. - It anticipates a gradual cooling of economic growth in the US, with real GDP growth projected at 1.6% quarter-on-quarter for Q2 2025, and a potential trough in growth by the end of 2025 [13][41]. - In the Euro area, GDP growth for Q1 2025 was revised up to 0.6%, but a decline is expected in Q2 due to trade uncertainties [14][45]. - Japan's economy shows resilience in manufacturing, but inflationary pressures from food prices are becoming a concern [15][43]. - China's GDP is projected to grow 5.2% year-on-year in the first half of 2025, but a slowdown to around 4.5% is anticipated in the second half due to various economic strains [16][47]. - The report emphasizes that while the global economy is slowing, it is not expected to tip into recession, largely due to strong starting conditions at the beginning of the year [17]. Summary by Sections US Economic Outlook - Real GDP growth is expected to be 1.6% quarter-on-quarter for Q2 2025, with inflation pressures leading to a cautious Federal Reserve stance [13][41]. - The labor market remains tight, but immigration restrictions are projected to lower net immigration significantly [41][43]. Euro Area Economic Outlook - GDP growth in Q1 2025 was revised to 0.6%, but a correction is expected in Q2 due to front-loaded exports and trade uncertainties [14][45]. - Inflation is projected to remain below the ECB's target through 2026, with expected rate cuts resuming in September [14][45]. Japan Economic Outlook - Nominal growth remains positive, with manufacturing sentiment holding up despite tariff risks [15][43]. - Food inflation is becoming sticky, pushing underlying inflation higher, while wage growth remains around 3% [15][43]. China Economic Outlook - GDP growth is projected at 5.2% year-on-year in 1H25, with a slowdown to around 4.5% in 2H25 anticipated [16][47]. - Persistent PPI deflation and modest core CPI gains indicate ongoing deflationary pressures [16][47]. Global Strategy Outlook - The report suggests that US risky and risk-free assets are attractive compared to the rest of the world, with a focus on US equities and core fixed income [25].

Interest Rate Outlook - Wells Fargo anticipates one rate cut in 2025 and one in 2026, suggesting a neutral rate around 100 basis points above inflation [3] - Piper Sandler suggests the economy needs rate cuts to broaden fundamental breadth beyond the largest companies and wealthiest consumers [7][13] - The market is already at all-time highs, priced for only a couple of cuts [4] Economic Indicators and Analysis - The economy is bifurcated, with housing and small caps showing weakness, while S&P 500 profits are at new highs [6][7] - US PMIs remain broadly in contraction territory [6] - Unemployment at 41%, and Q2 GDP tracking around 25% do not indicate an immediate need for Fed rate cuts [9] - Positive year-over-year earnings growth suggests no imminent recession or material slowdown [10] Earnings Growth - Consensus is tracking 5% to 6% earnings growth for Q2, potentially reaching 7% to 9% with beats, following Q1's 15% earnings growth [11] Market Performance - NASDAQ is at an all-time high, with Nvidia's market cap exceeding $4 trillion [1] - The market exhibits narrowness, with concerns about smaller companies and lower-income consumers being left behind [8][13]