Summary of Key Points from Conference Call Records Industry or Company Involved - The discussion primarily revolves around the **Chinese economy** and its comparison with **developed markets**, particularly the **U.S. stock market**. Core Insights and Arguments 1. **Economic Cycles**: The Chinese economy is currently in a recovery phase, contrasting with the downturn in the U.S. and other developed countries, which enhances the investment value of Chinese stocks while posing risks for U.S. equities [1][5] 2. **Asset Allocation Framework**: The asset allocation analysis framework is divided into **strategic** and **tactical** configurations, with strategic allocation focusing on long-term fixed asset ratios and tactical allocation allowing for adjustments based on market conditions [2] 3. **Liquidity vs. Inflation**: In the Chinese market, liquidity is deemed more critical than inflation, with "credit pulse" being a significant leading indicator for asset price changes [1][11] 4. **Fiscal Pulse**: Fiscal pulse has gained importance as a supplementary indicator to credit pulse, especially in times of poor macro liquidity transmission, showing a predictive capability that has surpassed credit pulse post-pandemic [1][14] 5. **Risk Premium (ERP)**: ERP is highlighted as a crucial valuation metric, indicating the expected excess return of stocks over bonds, particularly significant in the Chinese market [1][15][16] 6. **Global Asset Allocation Factors**: Key factors for Chinese investors in global asset allocation include the U.S. dollar, U.S. Treasury bonds, and the Federal Reserve, with U.S. inflation being a dominant variable affecting these factors [1][17] 7. **Gold Pricing Framework**: A new pricing framework for gold has been established, predicting potential price increases to the range of $3,000 to $5,000, following the decoupling of gold from U.S. Treasury yields [1][22] 8. **Dollar Strength**: The strength of the U.S. dollar is driven by fundamental, policy, and capital factors, maintaining its significant role in global asset allocation [1][21] 9. **Market Indicators**: The analysis of forward-looking indicators can help predict inflation trends, with historical data supporting the predictive power of rental prices on future inflation [1][19] Other Important but Possibly Overlooked Content 1. **Limitations of the Merrill Clock**: The applicability of the Merrill Clock in the Chinese market is limited, as economic phases often jump or reverse, leading to poor predictive performance regarding asset behavior [1][8][10] 2. **Impact of Economic Downturns**: During economic downturns, there is a tendency to increase bond holdings, and this analysis can be extended globally to inform cross-border asset allocation decisions [1][4] 3. **Long-term vs. Short-term Cycles**: Short-term growth cycles last 3 to 5 years, while long-term cycles can extend for decades, necessitating a broader data reference to avoid misleading conclusions from single-country cases [1][6] 4. **Complexity of Policy Responses**: The complexity of policy responses in China, which may not directly reflect economic fundamentals, complicates the predictive capabilities of frameworks like the Merrill Clock [1][9][10] 5. **Renminbi Exchange Rate**: The future trajectory of the Renminbi is influenced not only by trade factors but also by the performance of Chinese market stocks, which can support the currency [1][23] 6. **Changing Dynamics of Global Asset Allocation**: The traditional relationship between U.S. Treasuries and the dollar is evolving, indicating a potential fragmentation in global asset allocation strategies [1][24]

Market Performance - The Sci-Tech 50 Index decreased by 5.42% over the last five trading days, while the ChiNext Index increased by 2.35%. The large-cap value index fell by 1.25%, and the large-cap growth index rose by 1.68%. The SSE 50 Index dropped by 1.15%, and the small-cap index represented by the CSI 2000 fell by 2.41%. The power equipment and comprehensive sectors performed well, while the defense, military, and computer sectors lagged behind [1]. Risk Premium Analysis - The risk premium, calculated as the inverse of the static PE of the CSI All Share Index minus the yield of ten-year government bonds, indicates that the implied returns of equity and bond assets are at historically high levels. This metric reached 4.17% on April 26, 2022, and 4.08% on October 28, 2022, leading to a rapid market rebound. As of January 19, 2024, the indicator was at 4.11%, marking the fifth occurrence since 2016 of exceeding 4%. As of September 5, 2025, the indicator stands at 2.99%, with the two-standard-deviation boundary at 4.76% [1]. Valuation Levels - As of September 5, 2025, the CSI All Share Index's TTM PE is at the 76th percentile. The SSE 50 and CSI 300 are at 71% and 69%, respectively, while the ChiNext Index is close to 47%. The CSI 500 and CSI 1000 are at 59% and 55%, respectively, indicating that the ChiNext Index's valuation is relatively at the historical median level [2]. Long-term Market Trends - The technical analysis of the Deep 100 Index suggests a cyclical pattern of bear markets every three years, followed by bull markets. Historical declines have ranged from 40% to 45%. The current adjustment, which began in the first quarter of 2021, appears to have sufficient time and space for a potential upward cycle [2]. Fund Flow and Trading Activity - In the last five trading days, ETF inflows totaled 29.7 billion yuan, and the margin trading balance increased by approximately 35.8 billion yuan. The average daily trading volume across both markets was 25,676 billion yuan [2]. AI and Neural Network Analysis - A convolutional neural network (CNN) has been utilized to model price and volume data, mapping learned features to industry themes. The latest focus areas include communication and artificial intelligence, covering sub-indices such as communication equipment, AI industry, and 5G [8]. Indexes of Interest - The following indices are highlighted as of September 5, 2025: - CSI All Share Communication Equipment Index - CSI Artificial Intelligence Industry Index - CSI Communication Equipment Theme Index - ChiNext Artificial Intelligence Index - CSI 5G Communication Theme Index [3][9].

Group 1: Hot News - The People's Bank of China will conduct a 1000 billion yuan outright reverse repurchase operation on September 5, 2025, with a term of 3 months (91 days) [2] - The Ministry of Industry and Information Technology and the State Administration for Market Regulation issued the Action Plan for Stable Growth of the Electronic Information Manufacturing Industry from 2025 - 2026, aiming to promote high - quality development in areas such as photovoltaics and address "involution - style" competition [2] - The Ministry of Commerce decided to implement anti - circumvention measures against US - imported optical fiber products starting from September 4, 2025 [2] - The Coke Association believes that current coke does not meet the conditions for price reduction, and enterprises will jointly limit production to maintain prices [2] Group 2: Plate Performance - Key focus: Coking coal, coke, Shanghai silver, stainless steel, Shanghai gold [3] - Night session performance: Non - metallic building materials rose 2.69%, precious metals rose 29.55%, oilseeds rose 10.84%, non - ferrous metals rose 21.35%, soft commodities rose 2.42%, coal - coking - steel - ore rose 14.38%, energy rose 2.77%, chemicals rose 11.98%, grains rose 1.09%, and agricultural and sideline products rose 2.94% [3] Group 3: Plate Position - There are data on the position changes of commodity futures plates in the past five days, including Wind agricultural and sideline products, Wind grains, Wind chemicals, etc. [4] Group 4: Performance of Major Asset Classes Equity - The Shanghai Composite Index had a daily decline of 1.25%, a monthly decline of 2.39%, and an annual increase of 12.36% [5] - The S&P 500 had a daily increase of 0.83%, a monthly increase of 0.65%, and an annual increase of 10.55% [5] Fixed - income - The 10 - year Treasury bond futures had a daily increase of 0.13%, a monthly increase of 0.42%, and an annual decrease of 0.61% [5] Commodity - The CRB commodity index had a daily decline of 0.77%, a monthly decline of 0.66%, and an annual increase of 1.22% [5] Other - The US dollar index had a daily increase of 0.13%, a monthly increase of 0.44%, and an annual decrease of 9.41% [5]

Report Overview - The report provides a snapshot of the global asset market performance on September 1, 2025, including government bond yields, exchange rates, stock indices, and futures trading data [2] Global Asset Market Performance Government Bond Yields - **10 - year government bond yields**: In the US, it was 4.230 on August 29, 2025, with a latest change of 0.025, a one - week change of - 0.025, a one - month change of 0.012, and a one - year change of 0.428. Different countries showed various trends in yield changes over different time frames [2] - **2 - year government bond yields**: For example, the US 2 - year yield was 3.590 on August 29, 2025, with a latest change of - 0.020, a one - week change of - 0.150, a one - month change of - 0.080, and a one - year change of - 0.470 [2] Exchange Rates - **Dollar against major emerging economies' currencies**: Against the Brazilian real, the exchange rate was 5.430 on August 29, 2025, with a latest change of 0.28%, a one - week change of 0.07%, a one - month change of - 2.03%, and a one - year change of - 1.08% [2] - **Renminbi**: The on - shore RMB was 7.131 on August 29, 2025, with a latest change of 0.00%, a one - week change of - 0.51%, a one - month change of - 0.87%, and a one - year change of - 0.01% [2] Stock Indices - **Major economies' stock indices**: The S&P 500 was at 6460.260 on August 29, 2025, with a latest change of - 0.64%, a one - week change of - 0.10%, a one - month change of 3.56%, and a one - year change of 14.93% [2] - **Asian stock indices**: The Hang Seng Index was 25077.620 on August 29, 2025, with a latest change of 0.32%, a one - week change of - 1.03%, a one - month change of 2.33%, and a one - year change of 44.20% [2] Credit Bond Indices - **Investment - grade and high - yield bond indices**: The US investment - grade credit bond index was 3463.740 on August 29, 2025, with a latest change of - 0.25%, a one - week change of - 0.08%, a one - month change of 0.35%, and a one - year change of 3.38% [2] Futures Trading Data Stock Index Futures - **Index performance**: The A - share index closed at 3857.93 with a 0.37% increase. The CSI 300 closed at 4496.76 with a 0.74% increase [3] - **Fund flow**: The latest A - share fund flow was - 952.48, and the 5 - day average was - 1067.85 [3] - **Trading volume**: The latest trading volume of the two Shanghai and Shenzhen stock markets was 27982.97, with a month - on - month change of - 1725.06 [3] Treasury Bond Futures - **Closing prices and changes**: The T00 treasury bond futures closed at 108.050 with a - 0.15% change, and the TF00 closed at 105.665 with a - 0.04% change [4] - **Funding rates**: The R001 funding rate was 1.4184% with a daily change of - 14.00 BP, and the R007 was 1.5171% with a - 4.00 BP change [4]

Group 1 - The Jakarta Composite Index in Indonesia experienced a significant decline, dropping 1.5% last Friday and continuing to fall on Monday, with a peak drop of 3.6%, marking the largest decline since April 8 [1][2] - As of the latest report, the Jakarta Composite Index was down 1.11%, closing at 7743.73, after reaching a high of 7748.90 and a low of 7547.56 during the trading session [2] - Analysts indicate that political risks in Indonesia are rising, leading to an increase in market risk premiums, and they maintain a cautious stance on Indonesian equities due to valuations not reflecting potential economic issues [2] Group 2 - Prior to the recent events, the Indonesian stock market had reached an all-time high, with a year-to-date increase of approximately 9.6% [3] - The Indonesian economy showed better-than-expected growth, with the second-quarter growth rate exceeding 5%, which has bolstered market confidence [5] - The Indonesian central bank is focused on maintaining currency stability and ensuring sufficient liquidity for the rupiah, while also implementing policies to enhance foreign exchange reserves [5] Group 3 - Recent large-scale protests in Jakarta and other cities have led to significant unrest, with reports of police stations and government buildings being damaged, resulting in casualties [6] - The Chinese Embassy in Indonesia has issued safety warnings to Chinese citizens and institutions, advising them to avoid large gatherings and stay informed about local developments [6][9]

Core Viewpoint - The article discusses the increasing political influence on the Federal Reserve, which is raising the risk premium associated with U.S. dollar assets, prompting investors to reassess their exposure to dollar-denominated investments [1] Group 1: Economic Indicators - The U.S. dollar index is currently at 97.99, reflecting a 0.13% increase from an opening price of 97.87 [1] - The expanding budget deficit and government debt are contributing to the uncertainty in policy direction, which is affecting investor sentiment towards dollar assets [1] Group 2: Federal Reserve and Market Reactions - The market's instinctive reaction to the recent events surrounding Federal Reserve Governor Cook has provided slight support to U.S. short-term Treasury yields [1] - However, if the Trump administration continues to pressure the Federal Reserve to lower interest rates amidst high inflation, this support for yields may not be sustainable [1] Group 3: Market Dynamics - The dollar index is currently oscillating within a range of 97.54 to 98.95, entering a rebalancing phase after a previous upward movement [1] - The rapid increase in the dollar index faced selling pressure near 98.8290, leading to a pullback to around 97.5400, indicating a pattern of "volatility expansion—rapid mean reversion" driven by events [1]

Core Viewpoint - The global stock market experienced a slight increase from August 25 to August 29, with A-shares leading the gains, particularly in the ChiNext and Sci-Tech 50 indices, which rose over 7% [1][2]. Group 1: Equity Market Performance - The global equity market saw a modest rise, with emerging markets outperforming developed markets, particularly in North America compared to Asia and Europe [2]. - In developed markets, U.S. stocks showed resilience with the S&P 500 up by 0.5%, Nasdaq by 1.0%, and Russell 2000 by 0.7%, while European indices faced pressure, notably the French CAC40 which fell by 2.6% [2]. - Among emerging markets, A-shares performed exceptionally well, with the ChiNext index increasing by 7.7% and the Sci-Tech 50 by 7.5% [2]. Group 2: Bond Market Trends - The Chinese bond market exhibited a "bear steepening" trend, with the yield curve showing a downward shift at the short end and an upward shift at the long end, leading to an increase in the 10-year government bond yield to over 1.8% [3]. - In contrast, the U.S. bond market displayed a "bull steepening" characteristic, with an overall downward shift in yields and an expansion of the 10Y-2Y yield spread [3]. - As of August 30, market expectations indicated an 86.4% probability of a Federal Reserve rate cut in September, with potential for two cuts within the year [3]. Group 3: Commodity and Currency Movements - Precious metals led the commodity market, with COMEX silver and gold prices rising significantly, with year-to-date increases of 39.3% and 33.1% respectively [4]. - The domestic and international commodity price trends continued to diverge, with the South China commodity index slightly down by 0.2% while the CRB index rose by 0.8% [4]. - The Chinese yuan appreciated significantly against the U.S. dollar by 0.7%, while the dollar index saw a minor increase of 0.1% [4].

Market Performance - The Sci-Tech 50 Index increased by 7.49% and the ChiNext Index rose by 7.74% over the last five trading days, while the large-cap value index fell by 1.37% [1] - The large-cap growth index gained 5.83%, and the Shanghai 50 Index increased by 1.63%, with the small-cap index represented by the CSI 2000 rising by 0.33% [1] - Communication and non-ferrous metals sectors performed well, while textiles, apparel, and coal sectors lagged [1] Risk Premium Analysis - The static PE of the CSI All Index minus the yield of 10-year government bonds indicates a risk premium, which reached 4.17% on April 26, 2022, and 4.08% on October 28, 2022, leading to a market rebound [1] - As of January 19, 2024, the risk premium indicator was at 4.11%, marking the fifth occurrence since 2016 of exceeding 4% [1] - The indicator as of August 29, 2025, was at 2.92%, with the two-standard deviation boundary set at 4.77% [1] Valuation Levels - As of August 29, 2025, the CSI All Index's P/E TTM percentile was at 78%, while the Shanghai 50 and CSI 300 were at 72% and 70%, respectively [2] - The ChiNext Index was close to 46%, indicating a relatively low valuation level compared to historical averages [2] Technical Analysis - The Deep 100 Index has experienced bear markets every three years, with declines ranging from 40% to 45% [2] - The current adjustment cycle began in Q1 2021, suggesting a potential upward cycle from the bottom [2] Fund Flow and Trading Activity - In the last five trading days, ETF inflows totaled 28.6 billion yuan, and margin financing increased by approximately 96.6 billion yuan [3] - The average daily trading volume across both markets was 29.51 billion yuan [3] AI and Data Analysis - A convolutional neural network (CNN) was utilized to model price and volume data, mapping learned features to industry themes [9] - The latest investment themes include artificial intelligence and related sectors [2]

Core Viewpoint - The article examines the performance of private credit in light of the Federal Reserve's decision to maintain interest rates and Moody's downgrade of U.S. government debt, questioning why private credit consistently performs well [1][3]. Group 1: Analysis of Interest Rates and Private Credit - The analysis shifts from the effective federal funds rate to the "10-year minus 2-year Treasury yield" to compare the cost differences between public and private funding in terms of mid-term premiums [3]. - Historical data shows significant volatility in U.S. Treasury yields, particularly in years like 2000, 2003, 2007, 2020, and 2021, alongside a long-term trend from 2009 to 2019, indicating that declines in Treasury yields often coincide with declines in credit fund returns [4]. - There is a limited correlation between private credit returns and mid-term Treasury yields, with notable volatility in private credit returns during economic downturns when Treasury yields typically rise [5]. Group 2: Trends and Future Outlook - In the years following economic recessions, private credit returns tend to be significantly higher than average, aligning with historical deep value investment returns during such periods [5]. - The 2010s saw a gradual decline in U.S. Treasury yields without economic recessions, leading to a similar decline in private credit returns, although there was a rebound after volatility in 2017 [5]. - The future outlook suggests that private credit may experience short-term volatility in 2025, but could benefit from deep investments once the market stabilizes, despite potential early impacts from the downgrade of U.S. Treasury credit ratings [6].

Core Viewpoint - The ongoing conflict between President Trump and the Federal Reserve is escalating, with significant implications for the Fed's independence and monetary policy direction [2][10]. Group 1: Federal Reserve's Independence - Trump's actions, including the dismissal of Fed Governor Lisa Cook, are seen as unprecedented attacks on the Fed's independence, potentially leading to higher inflation and decreased credibility [9][10]. - Analysts warn that if Trump successfully alters the composition of the Federal Reserve Board, it could lead to a shift towards more accommodative monetary policy, undermining the Fed's traditional data-driven approach [10][11]. Group 2: Impact on Monetary Policy - The Federal Reserve's current stance remains moderately restrictive, with officials indicating that rate cuts may be appropriate in the future, depending on economic conditions [3][4]. - The potential for Trump to influence the selection of regional Fed presidents could significantly impact monetary policy decisions, particularly if he gains a majority on the Fed Board [7][11]. Group 3: Market Reactions - The bond market has begun to show signs of distortion, with a steepening yield curve indicating rising inflation expectations and risk premiums due to perceived threats to the Fed's independence [4][11]. - Despite current market calmness, there is a growing concern that the political influence over the Fed could lead to increased volatility and higher inflation in the long term [10].