Investment Rating - The report indicates a significant impact of tariffs on the economy, with a focus on the retail sector and credit market dynamics, suggesting a cautious approach to investments in these areas. Core Insights - Tariff revenues exceeded 26 billion USD in June, annualized at about 1% of GDP, marking a significant increase compared to three months prior, indicating that the effects of tariffs are becoming more pronounced [1][2] - The retail sector is particularly vulnerable due to preemptive inventory purchases made in anticipation of high tariffs, which have now been sold out, leading to higher costs for new orders expected in the third quarter of 2025 [3][4] - Core inflation data is rising, reflecting increased cost pressures across industries affected by tariffs, with the retail sector expected to feel the impact more acutely in the third quarter of 2025 [3][4] Summary by Sections Tariff Impact - The rapid increase in tariff rates, now reaching historical highs of 9%, with potential future increases to 15-20%, is a key factor in the delayed impact of tariffs on the market [2] - Companies had stocked up on inventory before tariffs took effect, but by the third quarter, these inventories will be depleted, leading to higher costs for new products [2] Retail Sector - The retail industry is especially affected as it faces higher costs for new goods after selling off pre-purchased inventory, with core inflation pressures compounding the situation [3] Credit Market - The credit market is advised to focus on quality, particularly in August and September, as the retail sector's challenges may lead to increased scrutiny on credit quality due to rising costs and inflation [4]

Group 1 - Federal Reserve Governor Christopher Waller advocates for a rate cut this month to support a weakening labor market, marking a significant divergence from most of his colleagues who believe the job market remains strong [1][3][4] - Waller's speech emphasizes that inflation is near target levels and that the risks of a labor market deterioration warrant a 25 basis point rate cut at the upcoming Federal Open Market Committee (FOMC) meeting [3][4] - He identifies a precarious balance in the labor market, supported by both hard data (employment numbers, unemployment rates) and soft data (business hiring intentions, consumer confidence) [3][4] Group 2 - Waller and Vice Chair Michelle Bowman are the only two Fed officials publicly supporting a rate cut this month, highlighting their minority position among those advocating for maintaining current rates [4] - Waller has previously held differing views from colleagues, particularly regarding the temporary impact of tariffs on inflation, and he stresses the need to focus on core inflation, which is close to the FOMC's 2% target [4][5] - Despite recent data showing that tariffs have begun to raise some prices, core inflation has remained below expectations for five consecutive months, alleviating concerns about persistent inflation [4][5] Group 3 - Waller warns that the risks of a weakening job market are significant enough to justify a rate cut, noting that while the economy is still growing, momentum has slowed considerably [5] - Other Fed officials express caution regarding the potential impacts of tariffs, suggesting a wait-and-see approach before deciding on rate cuts [5] - Market reactions indicate that investors expect the Fed to maintain rates this month, with a slightly higher than 50% probability of a rate cut in September, reflecting cautious sentiment amid internal Fed disagreements [5] Group 4 - Waller is considered a potential candidate to succeed Powell as Fed Chair after his term ends in May, and his current stance aligns with President Trump's calls for looser monetary policy, adding a political dimension to his economic views [6]

Core Viewpoint - The Federal Reserve Governor Waller indicated that further interest rate cuts may be necessary if core inflation remains controlled and economic growth continues to be weak [1] Summary by Relevant Categories Economic Indicators - Core inflation must remain under control for the potential of further rate cuts to be considered [1] - Economic growth is currently described as lackluster, which influences the decision-making process regarding interest rates [1] Monetary Policy - The statement suggests a proactive approach to monetary policy, indicating that the Federal Reserve is prepared to adjust interest rates in response to economic conditions [1]

Group 1: Inflation Trends - The Producer Price Index (PPI) for June 2025 recorded a year-on-year increase of 2.3%, marking the lowest level since September 2024, with market expectations at 2.5% [1] - The core PPI, excluding food, energy, and trade services, remained flat, with a 12-month cumulative increase of 2.5%, indicating low potential inflation stickiness [2] - The overall manageable producer price pressure suggests a likelihood of the Federal Reserve maintaining current interest rates or gradually lowering them [2] Group 2: Sector-Specific Insights - Energy prices saw a 0.6% increase in June, with gasoline prices rising by 1.8% and industrial electricity prices by 2.7%, indicating structural opportunities in the energy sector [3] - The demand for communication and related equipment prices increased by 0.8% in June, reflecting ongoing enterprise demand for 5G upgrades and data center construction [3] - Despite a 0.9% overall decline in transportation and warehousing services, freight forwarding prices rose by 8.0%, highlighting increased demand for logistics optimization amid global supply chain restructuring [3][4] Group 3: Consumer Services and Agricultural Products - Travel accommodation prices dropped by 4.1% in June, the largest monthly decline in six months, indicating short-term pressure on the tourism sector [5] - Egg prices plummeted by 21.8% in June, with a 12-month cumulative increase narrowing to 15.8%, primarily due to oversupply [9] - The price of unprocessed chicken decreased by 25.0%, suggesting potential short-term profitability pressures for poultry farming enterprises [9]

Core Viewpoint - The increase in prices of various goods, including coffee, audio equipment, and household items, has led to a rise in inflation in June, indicating that the costs of tariffs imposed by the Trump administration are being passed on to consumers [1][2]. Inflation Data - The overall Consumer Price Index (CPI) in the U.S. rose by 0.3% month-on-month in June, translating to an annualized rate of approximately 3.5%, compared to a mere 0.1% increase in May [1]. - The core inflation, excluding food and energy, was reported to be lower than expected, suggesting that inflation is being stabilized under Trump's administration [3]. Tariff Impact - Economists predict that the delayed effects of tariffs will accelerate inflation over the summer, with significant price increases observed in imported goods such as audio equipment, which saw a monthly increase of 1.1% and a year-on-year increase of 11.1%, marking the highest increase on record for this category [1][5]. - The impact of tariffs is expected to continue influencing inflation, with estimates suggesting that new tariffs could increase the Personal Consumption Expenditures (PCE) price level by approximately 0.4 percentage points if fully transmitted [4]. Federal Reserve Response - The Federal Reserve is cautious about interest rate cuts, with market expectations for a rate cut in September becoming uncertain due to rising inflation concerns [2][3]. - The Boston Fed President warned that rising import taxes will likely continue to push inflation higher while suppressing growth and employment [2]. Consumer Behavior - Despite rising prices, strong balance sheets for businesses and households may help absorb the shock of tariffs, potentially limiting negative impacts on the labor market and economic growth [2]. - The price increases in categories such as household goods and entertainment indicate that the effects of tariffs are gradually permeating through the economy [3][5].

Group 1: Market Performance - Major stock indices showed mixed results, with the Dow Jones Industrial Average down by 436.36 points (-0.98%) at 44023.29, while the Nasdaq increased by 37.47 points (0.18%) to 20677.8 [1] - The S&P 500 decreased by 24.8 points (-0.40%) to 6243.76, while the Hang Seng Index rose by 386.8 points (1.60%) to 24590.12 [1] - The Nikkei 225 increased by 218.4 points (0.55%) to 39678.02, and the KOSPI rose by 13.25 points (0.41%) to 3215.28 [1] Group 2: U.S.-China Trade Relations - U.S. Treasury Secretary stated that the current negotiations between the U.S. and China are in a "good state," with flexibility regarding the upcoming tariff ceasefire deadline [2] - President Trump announced that tariff letters to smaller countries will be sent soon, with rates expected to be "slightly above 10%" [3] Group 3: Trade Investigations - The U.S. Trade Representative initiated an investigation into Brazil's trade practices under Section 301 of the Trade Act of 1974, focusing on unfair restrictions on U.S. exports [4] Group 4: Economic Indicators - U.S. core inflation data showed that the Consumer Price Index (CPI) rose by 0.3% month-over-month and 2.7% year-over-year, with core CPI increasing by 0.2%, below the 0.3% market expectation [5] Group 5: Oil Demand Outlook - OPEC indicated that global economic performance in the second half of the year may exceed expectations, supporting oil demand due to high refinery crude absorption [6] Group 6: Corporate Investments - Apple is expected to announce a $500 million investment in MP Materials, the only rare earth mining operator in the U.S. [7] Group 7: Financial Performance - JPMorgan Chase reported Q2 revenue of $45.7 billion, exceeding market expectations, but down from $51 billion year-over-year, with net income of $15 billion [8] - CEO Jamie Dimon noted that tax reform and potential deregulation are favorable for economic outlook, despite existing risks from tariffs and trade [9] Group 8: Technology Developments - Nvidia's stock rose by 4.04% to $170.7, reaching a market capitalization of $4.17 trillion, following the approval of H20 chip sales to China [10]

Core Viewpoint - The inflation report is generally positive, with core inflation rising by 0.2% month-over-month, aligning with expectations, while annual data is slightly above expectations [1] Group 1: Inflation Data - Core inflation's monthly increase of 0.2% meets expectations, indicating stability in inflation trends [1] - Annual inflation data is slightly higher than anticipated, suggesting some inflationary pressures may be emerging [1] Group 2: Federal Reserve Implications - The inflation data provides the Federal Reserve with breathing room, allowing them to maintain interest rates steady in July [1] - The Fed will need to consider data from July and August before making a decision in September [1]

Group 1 - Overall inflation met expectations with a seasonally adjusted CPI month-on-month increase of 0.3%, marking the largest single-month rise since January. This led to an unadjusted CPI year-on-year rate of 2.7%, up from 2.4% in May, driven by rising food and energy prices [1] - Core inflation was below expectations, with a seasonally adjusted core CPI month-on-month increase of 0.2%, remaining below the median forecast for the fifth consecutive month. The year-on-year core CPI rose by 2.9%, slightly up from 2.8% in the previous three months, meeting expectations [1] - Key components of core inflation were suppressed due to declines in new and used car prices, as well as decreases in airfare and accommodation costs. Housing prices showed relative moderation, with a monthly increase of 0.2%. The impact of tariff increases was evident in several categories, with furniture prices rising by 1%, the largest increase since January 2022; video and audio product prices up by 1.1%, the largest since February last year; and toy prices increasing by 1.8%, the largest since April 2021 [1] - Rate cut pricing remained unchanged, as higher tariff rates are expected to take effect from August. Economists indicated that the June inflation report is unlikely to prompt the Federal Reserve to cut rates earlier. Futures markets still suggest a significant possibility of the Fed restarting rate cuts in September [1] Group 2 - Following the report's release, the U.S. two-year Treasury yield retraced slight gains, gold experienced volatility, and the three major U.S. stock indices opened mixed [2]

Core Viewpoint - Goldman Sachs economists report that tariffs may have increased prices for goods with supply chains extending overseas, such as home goods, entertainment, and communication products [1] Summary by Relevant Categories Inflation Impact - Last month, airfare prices may have rebounded, but Goldman Sachs predicts that due to expected declines in used car prices and stable new car prices, the overall core inflation rate for June may be approximately 0.23% month-on-month [1] - The team anticipates that the monthly inflation rate for the core Consumer Price Index (CPI) will range between 0.3% and 0.4% in the coming months due to the potential severe impacts of tariffs [1]

Group 1: Macroeconomic Insights - The report discusses the potential acceleration of the Section 232 investigation by the Trump administration, particularly focusing on tariffs on copper and pharmaceuticals, with a higher likelihood of copper tariffs being implemented [1] - Core inflation is showing signs of recovery, with the Consumer Price Index (CPI) returning to positive year-on-year growth, driven by rising gold prices and policies promoting trade-in programs [2] - The Producer Price Index (PPI) has unexpectedly declined, indicating weakening prices in domestic energy, raw materials, and certain export sectors, necessitating policy measures to stimulate recovery [2] Group 2: Market Data - The A-share market indices showed slight declines, with the Shanghai Composite Index closing at 3493.05, down 0.13%, and the Shenzhen Component Index at 10581.8, down 0.06% [3] - In the commodity market, gold prices fell by 1.21% to 766.82, while copper prices decreased by 1.53% to 78400 [3] - The foreign exchange market saw the USD/CNY exchange rate at 7.1541, reflecting a slight increase of 0.01% [3] Group 3: Company Research - The report highlights that Q Technology (1478.HK) has upgraded its profit forecasts for 2025, 2026, and 2027 by 20%, 31%, and 40% respectively, due to higher-than-expected shipments of IoT modules [4] - Changchun High-tech (000661.SZ) received approval for its injection drug, marking a significant step in its innovation transformation, although profit forecasts for 2025-2027 have been revised downwards due to increased R&D and marketing expenses [5]