Core Viewpoint - U.S. Treasury Secretary Bessent believes that the recent market fluctuations do not necessarily indicate a loss of confidence among investors in the U.S. economy and markets [1] Summary by Relevant Sections Market Sentiment - Bessent emphasizes that short-term market movements over a two-week or one-month period may be statistical noise rather than a reflection of true investor sentiment [1] - He suggests that the focus should be on long-term investment strategies rather than reacting to temporary market conditions [1] Economic Foundation - The U.S. government is laying the groundwork for a strong dollar, robust economy, and a strong stock market [1] - Bessent reassures investors that the U.S. bond market remains the safest and most stable in the world [1]

Group 1 - U.S. stock market showed signs of recovery with major indices rising, but concerns over trade negotiations and economic outlook remain [1] - The Dow Jones increased by 1.07%, S&P 500 rose by 1.67%, and Nasdaq gained 2.50% [1] - U.S. Treasury Secretary emphasized no immediate plans to lower tariffs on trade partners and maintained a strong dollar policy [1] Group 2 - International gold prices fell significantly, with June futures closing at $3294.1 per ounce, down 3.66% [2] - The decline in gold prices was attributed to reduced risk aversion and profit-taking by investors [2] Group 3 - U.S. tech and chip stocks rebounded, with Tesla's stock rising 5.37% following announcements of increased production of affordable models [3] - Intel announced a 20% workforce reduction, leading to a 5.54% increase in its stock price [3] - Apple and Meta faced fines from the EU for violations of the Digital Markets Act, with penalties of €500 million and €200 million respectively [3] Group 4 - European stock indices all closed higher, supported by positive earnings reports from major tech companies and expectations of interest rate cuts from the European Central Bank [4] - The UK stock market rose by 0.90%, France by 2.13%, and Germany by 3.14% [4] Group 5 - International oil prices declined due to reports of some major oil-producing countries pushing for increased production despite Saudi Arabia's calls for stability [5] - Light crude oil futures closed at $62.27 per barrel, down 2.20%, while Brent crude futures settled at $66.12 per barrel, down 1.96% [5]

Core Viewpoint - The current economic situation in China is characterized by a cyclical downturn coupled with structural issues, necessitating measures to avoid the multiplier effect of a declining real estate market and to improve the economic structure [2][28]. Economic Growth and Policy Expectations - The GDP growth target for 2025 is expected to remain around 5% [4][92]. - The policy multiplier effect in 2025 is anticipated to be better than in 2024, with expectations for new initiatives in fiscal reform, budget investment, monetary policy, high-quality development, and technological innovation during the upcoming Two Sessions [3][90]. Monetary Policy Outlook - In 2025, a reserve requirement ratio (RRR) cut of 1 percentage point and interest rate cuts totaling 0.75 percentage points are expected, likely implemented in 2-3 phases [5][78]. - The downward trend in interest rates is projected to positively impact the stability of the real estate and stock markets, contributing to a prosperous capital market in 2025 [5][80]. Structural Issues and Consumption - The global economy faces severe structural problems, including geopolitical conflicts and economic disparities, which also affect China's economic landscape [26][24]. - There is a need to enhance consumption and expand domestic demand, particularly as the wealth effect from real estate diminishes [29][30]. Real Estate Market Dynamics - The real estate sector is undergoing a mean reversion process, with a prolonged adjustment period expected due to previous overvaluation [52][54]. - The contribution of real estate to GDP was significant, accounting for 25% during its peak, and its decline will have widespread negative impacts on various industries [32][34]. Investment and Consumption Trends - Investment returns are declining, leading to a contraction in expansion plans among households and private enterprises [30][46]. - Consumption is identified as a slow variable, contrasting with investment as a fast variable, indicating a need for structural improvements to stimulate long-term demand [41][44]. Fiscal Policy Recommendations - There is a call for increased fiscal stimulus, particularly in consumer spending, with suggestions to raise the fiscal deficit level and leverage central government finances [66][67]. - The current central government leverage is relatively low compared to other countries, indicating room for fiscal expansion [70][71]. Capital Market Outlook - The capital market is expected to thrive in 2025, supported by robust policy measures and a stable GDP growth environment [93][88]. - The focus on income distribution reform could significantly enhance consumption, with potential contributions estimated at around 200 billion annually if middle and low-income groups see an increase in their income share [84][85].