Core Viewpoint - The potential imposition of tariffs on imported drugs by the U.S. has led to a significant increase in gold prices, with spot gold rising nearly $100 on May 6, closing at $3431.11 per ounce, before experiencing a slight decline the following day [1][2]. Market Overview - On May 6, spot gold surged by 2.85%, while spot silver increased by 2.33%, closing at $33.22 per ounce [1][2]. - The initial trading on May 7 saw gold prices drop nearly 1%, falling close to $3400 per ounce [1][2]. Economic Indicators - The U.S. supply chain pressure has eased, with the New York Fed reporting a global supply chain pressure index of -0.29 for April, indicating no significant supply chain stress [3]. - Analysts suggest that if the Federal Reserve downplays market expectations for interest rate cuts in its upcoming meeting, the U.S. dollar may strengthen [3]. - Despite high inflation and a stable labor market, the Fed has limited options for action, primarily focusing on delaying market easing expectations [3]. Trading Strategy - For international gold, support levels are noted at $3382 or $3366, with resistance levels at $3450 or $3500 [4]. - For spot silver, support is identified at $32.95 or $32.75, with resistance at $33.40 or $33.65 [4].

Market Overview - Major indices in the US closed lower, with the Dow Jones down 389.83 points (0.95%) at 40829.00, Nasdaq down 154.58 points (0.87%) at 17689.66, and S&P 500 down 43.47 points (0.77%) at 5606.91 [1] - European markets showed mixed results, with Germany's DAX30 down 85.84 points (0.37%) at 23249.58, while the UK FTSE 100 rose slightly by 2.92 points (0.03%) to 8599.27 [1] Currency Market - The US Dollar Index fell by 0.59% to 99.237, with the Euro rising to 1.1371 USD from 1.1313 USD, and the British Pound increasing to 1.3376 USD from 1.3289 USD [2] Cryptocurrency and Commodities - Bitcoin increased by 0.51% to 95312.49 USD, while Ethereum dropped over 1.6% to 1791.71 USD [3] - Spot gold prices rose above 3400 USD, with local jewelry prices also increasing, such as Chow Tai Fook's gold price at 1026 CNY per gram, up 28 CNY [3] - Crude oil prices saw significant increases, with NYMEX light crude up 1.96 USD (3.43%) to 59.09 USD per barrel, and Brent crude up 1.92 USD (3.19%) to 62.15 USD per barrel [3] Corporate News - AMD reported first-quarter earnings that exceeded expectations, with a 36% year-over-year revenue increase to 7.44 billion USD, driven by a 57% growth in its data center segment [7] - Microsoft is launching two low-end Surface tablets to promote its AI tools, with the Surface Laptop starting at 899 USD and the Surface Pro at 799 USD, aiming to compete with Apple's devices [8]

Global Economic Overview - The global economic landscape is characterized by divergence, with the US showing moderate growth supported by consumer spending, while investment lags behind [1] - Japan's economy is experiencing mild growth with balanced contributions across sectors [1] - Emerging markets like China are growing at their own pace, with consumption, investment, and net exports contributing positively, although the real estate sector is facing adjustments [1] - India is showing strong economic growth momentum [1] - Global inflation levels vary, with some countries facing significant inflationary pressures, while China is experiencing deflationary signs [1] - Supply chain pressures have eased globally, leading to a decrease in freight costs [1] Stock Market Performance - Global stock market returns vary significantly by region, with some Asian markets like Taiwan and China performing exceptionally well over the past decade [2] - Different markets exhibit unique characteristics in terms of earnings expectations, valuations, and dividend performance [2] - The technology sector is gaining attention, particularly with high earnings growth expectations for Chinese tech companies and significant growth in India's telecommunications services sector [2] - The US stock market is noted for its high concentration, with the top ten companies having a substantial impact on the index [2] Fixed Income Market Dynamics - The global fixed income market shows complex dynamics, with varying returns across different bond categories [3] - Emerging market local currency bonds and Asian high-yield bonds have performed well during certain periods [3] - The yield, duration, and interest rate sensitivity of bonds differ, affecting market returns [3] - The spread changes between investment-grade and high-yield bonds influence market performance [3] - Emerging market bonds exhibit volatility in spreads and returns compared to US Treasuries, while the Asian fixed income market has its own trends [3] Other Asset Classes - The US dollar's exchange rate is related to interest rate differentials, and commodity prices are subject to fluctuations [4] - Gold prices are influenced by real interest rates, while oil prices are affected by supply and demand dynamics [4] - Alternative asset classes show varying returns and volatility, with different correlations to traditional assets, which can help in risk diversification within investment portfolios [4]

Investment Rating - The report provides a "Buy" rating for stocks, indicating an expected relative increase of over 20% compared to the benchmark index within six months [32]. Core Insights - The February inflation data in the U.S. showed a significant cooling, with the CPI increasing by 2.8% year-on-year, below the expected 2.9% and the previous value of 3% [12]. - Core inflation also fell short of expectations, with a year-on-year increase of 3.1%, compared to the anticipated 3.2% [12]. - The decline in transportation costs, particularly a 4% drop in airfare, was a major contributor to the lower CPI [14]. - The report suggests that core service inflation is continuing to cool, with rent growth decreasing to 4.3% year-on-year, down from around 6% at the beginning of 2024 [2][19]. - Concerns about the potential inflationary impact of tariff policies are noted, but historical data indicates limited effects from previous tariff increases [23]. Summary by Sections Section 1: U.S. February Inflation Data - The February CPI data was significantly below expectations, with a year-on-year increase of 2.8% and a month-on-month increase of 0.2% [12]. - The core CPI also showed a year-on-year increase of 3.1%, indicating a cooling trend in inflation [12][11]. Section 2: Core Service Inflation - Core service inflation is on a downward trend, with housing rent growth decreasing to 4.3% year-on-year [2][19]. - Other service-related price increases linked to labor costs are also showing a downward trend [2]. Section 3: Tariff Policies and Inflation - The report discusses concerns regarding the potential inflationary effects of new tariff policies, referencing the 2018-2019 tariff increases that did not lead to significant inflation [23][20]. - It concludes that if tariffs are targeted rather than broad, their impact on inflation may be limited [29].