Core Viewpoint - Bitcoin price reached a record high, driven by optimistic sentiment surrounding U.S. regulation, particularly the proposed stablecoin legislation in the Senate [1] Group 1: Regulatory Developments - The recent rebound in Bitcoin and the broader cryptocurrency market is attributed to favorable regulatory news, including the stablecoin bill proposed after Democratic opposition was dropped [1] - The bipartisan group aims to pass the stablecoin legislation in the Senate as early as this week [1] Group 2: Market Sentiment - Michael Novogratz, CEO of Galaxy Digital, noted that the shift in regulatory stance from the SEC under former Chair Gary Gensler to the Trump administration has invigorated market sentiment [1] - This change is perceived to have released a sense of 'animal spirits' in both domestic and international markets, enhancing investment enthusiasm [1]

Group 1 - Investors are observing a potential shift from defensive sectors like consumer staples and utilities, which have seen gains of 5% and 5.6% respectively, to more economically sensitive sectors such as technology, industrials, and discretionary consumer goods, indicating an increase in risk appetite [1] - The upcoming economic data, including April CPI and retail sales reports, will provide critical insights into inflation trends and consumer spending, which are essential for understanding market sentiment [2] - Concerns about the economic impact of tariffs persist, with fears that higher import tariffs could lead to increased prices and slower growth, potentially raising worries about "stagflation" if CPI exceeds expectations while retail sales fall short [3] Group 2 - The Federal Reserve's recent decision to maintain interest rates and its acknowledgment of rising risks related to inflation and unemployment suggest a cautious outlook for the economy [3] - The announcement of a trade agreement between Trump and UK Prime Minister Starmer has led to a positive market response, marking the first agreement since the onset of the trade war initiated by tariffs [3] - Optimism is growing regarding potential trade negotiations, with expectations that more agreements could be reached before the end of the tariff suspension period [3]

Core Viewpoint - The article suggests that the fiscal policy for 2025 is "technology stock friendly," driven by a high deficit and moderate spending, which may positively influence technology stock valuations [2][10]. Summary by Sections 1. 2025 Budget Characteristics: "High Deficit" and "Low Income" Combined with "Moderate Spending" - The budget features a deficit rate of 4%, an increase of 1 percentage point from the previous year, marking a historical high, with a deficit scale reaching 5.66 trillion yuan, up by 1.6 trillion yuan from last year [4]. - The income growth rate for the budget is set at only 0.1%, the lowest in recent years, primarily due to tax revenue being pressured by prices and a decrease in non-tax one-time income [5]. - The expenditure growth rate is arranged at 4.4%, close to the average levels of 2023 and 2024, indicating a commitment to expand fiscal spending to support economic development [6]. 2. How Fiscal Policy Affects Technology Stocks - Technology stock performance is influenced by industry trends and valuations, with fiscal policy impacting the latter through investor sentiment and discount rates [6][7]. - The deficit serves as a signal to boost investor sentiment, while spending affects the discount rate, which in turn influences the intrinsic value of technology companies [6][7]. 3. What is "Technology Stock Friendly" Fiscal Policy? - A high deficit is seen as beneficial for technology stock valuations, as it protects investor sentiment without interfering with industry trends [8]. - Moderate spending that aligns with nominal GDP growth can stabilize technology stock valuations, preventing undue pressure from rising risk premiums [9]. 4. Why This Year May Be "Technology Stock Friendly" - Historical patterns indicate that when the deficit rate increases by 1 percentage point or the broad deficit rate rises by 2 percentage points, technology stocks tend to see valuation increases [10][11]. - The current fiscal spending growth is expected to align closely with nominal GDP growth, which historically has favored technology stocks over consumer stocks [11]. 5. Fiscal Resilience and Challenges - The article posits that the risk of fiscal shortfalls is low this year, supported by strong central and provincial fiscal reserves, which may help mitigate systemic risks [12][13]. - Six major provinces show resilience in their fiscal targets, indicating a potential for recovery in local government revenues, which is crucial for overall fiscal health [13][14].