Group 1 - The overall performance of the US stock market in September has been strong despite concerns about a potential government shutdown, with major indices rising [1] - Investors are focusing on positive signals, such as the upward revision of the US Q2 GDP annualized growth rate to 3.8%, which is the strongest performance since Q3 2023 [1] - Financial strategists suggest that the potential government shutdown is not a significant risk, encouraging investors to focus on other market drivers like the Federal Reserve's interest rate cuts and strong corporate earnings [2] Group 2 - Historical data indicates that government shutdowns have had limited impact on the US economy and financial markets, with the S&P 500 showing no change during shutdowns since 1976 [2] - The last major government shutdown from 2018 to 2019 did not significantly affect the stock market, which even rose by 10% during that period [2] - Analysts warn that the current economic environment is more fragile than in previous shutdowns, with instability in the job market and potential federal workforce cuts [3] Group 3 - The interruption of important economic data releases due to a government shutdown could complicate the analysis of labor market conditions, which are already complex [4] - Missing key economic data, such as the employment report and consumer price index, could significantly increase challenges for analysts [4]

Core Viewpoint - The Vice Chairman of the Federal Reserve, Jefferson, anticipates that the U.S. economy will continue to grow at around 1.5% for the remainder of the year, indicating potential pressure on the labor market without Federal Reserve support [1] Economic Growth - Jefferson expects the U.S. economy to grow at approximately 1.5% for the rest of the year [1] - He supports a 25 basis point interest rate cut in the September meeting to balance the risks of inflation above target and increasing threats to the labor market [1] Labor Market - The labor market is showing signs of softening, suggesting it may face pressure without adequate support [1] Inflation Outlook - Jefferson predicts that inflation will begin to decline towards the Federal Reserve's 2% target level after this year [1] Policy Uncertainty - The impacts of the Trump administration's trade, immigration, and other policies are still evolving, leading to particularly high uncertainty in baseline forecasts [1] - Although tariffs have a lower impact on inflation and other economic aspects than some economists expected, Jefferson believes these effects will become more apparent in the coming months [1]

Group 1 - The core viewpoint is that the future of AI investment depends on market willingness to finance future dreams, with concerns about whether AI is a bubble or not [1][5] - The U.S. GDP growth for Q2 was revised to 3.8%, indicating strong consumer spending despite a weak job market, with business investment growing at 7.3% [1][2] - The strong consumer activity and stable prices provide the Federal Reserve with confidence to follow through with planned interest rate cuts, with a consensus among decision-makers for a gradual approach [3] Group 2 - Major tech companies are forming partnerships, such as Nvidia investing $100 billion in OpenAI, which creates a closed-loop funding system that boosts market confidence in the AI industry [3][4] - The AI sector has seen over $600 billion in investments over the past two years, but revenue remains low at approximately $35 billion, raising questions about the sustainability of such investments [4] - Historical context suggests that while AI has the potential to transform industries, the market may experience significant volatility, and not all early players will succeed [5]

Market Overview - Major U.S. indices declined for the third consecutive trading day, with the Dow Jones down 173.96 points (0.38%) to 45947.32, the Nasdaq down 113.16 points (0.50%) to 22384.70, and the S&P 500 down 33.25 points (0.50%) to 6604.72, amid rising U.S. Treasury yields [1] - European indices also fell, with Germany's DAX30 down 136.90 points (0.58%) to 23544.80, the UK's FTSE 100 down 36.88 points (0.40%) to 9213.55, and France's CAC40 down 32.03 points (0.41%) to 7795.42 [1] Commodity Prices - Light crude oil futures for November delivery fell by $0.01 to $64.98 per barrel (0.02% decrease), while Brent crude oil futures rose by $0.11 to $69.42 per barrel (0.16% increase) [2] - Bitcoin dropped over 3% to $109,421.30, and Ethereum fell over 6% to $3,903.01 [3] Precious Metals and Forex - Spot gold increased by over 0.3% to $3,749.04 [4] - The U.S. dollar index rose by 0.7% to 98.554, with the euro at $1.1653, the pound at $1.3335, and the yen at ¥149.89 [4] Economic Data - The U.S. economy grew at an annualized rate of 3.8% in Q2, up from a previous estimate of 3.3%, indicating a strong rebound from the pandemic [5] - Consumer spending and business equipment spending remain resilient, with expectations for a nearly 3% year-over-year increase in personal consumption expenditures for August [5] Federal Reserve Insights - Federal Reserve Governor Milan suggested the possibility of a rapid 50 basis point rate cut to mitigate economic risks, emphasizing the need for a quicker adjustment to monetary policy [6] - Dallas Fed President Logan proposed shifting from the federal funds rate to a more stable overnight rate linked to U.S. Treasury collateral for monetary policy execution [6] Mortgage Rates - U.S. mortgage rates rose to 6.3%, ending a streak of declines, which may impact affordability for potential buyers [8] - Economists believe that a drop below 6% could encourage more homeowners to sell, increasing the inventory of second-hand homes [8] Regulatory Developments - Meta is facing potential EU charges for inadequate regulation of illegal content on its platforms, which could result in fines up to 6% of its global annual revenue [10] - Google may face a second significant fine from the EU related to competition law violations, following a previous fine of €2.95 billion for unfair practices [11]

Core Points - The U.S. economy experienced an acceleration in the second quarter, with a reported annualized GDP growth rate of 3.8% from April to June [1][2] - This growth rate exceeded economists' expectations of 3.3% and was higher than the initial estimate of 3% by the Commerce Department [2] - The increase in GDP was primarily driven by a decrease in imports and an increase in consumer spending, although these were partially offset by declines in investment and exports [2] Economic Context - The second quarter growth follows a downward revision of GDP contraction in the first quarter, which was adjusted from -0.5% to -0.6%, resulting in an annualized GDP growth rate of approximately 1.6% for the first half of 2025 [3]

Group 1 - The Federal Reserve lowered the federal funds rate by 25 basis points, marking its first rate cut since December 2024, with a target range now set at 4%-4.25% [2][4] - The decision was made with 11 votes in favor and 1 against, highlighting a division among Fed officials regarding future rate cuts [2][4] - The Fed acknowledged rising risks to employment despite persistent inflation, indicating a shift in focus towards job preservation [2][4] Group 2 - The Fed's internal division is evident, with 10 officials predicting two or more rate cuts this year, while 9 believe there will be one or fewer [4] - Economic uncertainties, including labor supply changes and government policy unpredictability, complicate the Fed's decision-making process [4][5] - The potential for a global wave of rate cuts is anticipated following the Fed's decision, with other central banks likely to follow suit [5][6] Group 3 - Analysts suggest that the Fed's rate cut may provide some support for U.S. economic growth, but overall growth is expected to remain under pressure due to various factors [6] - The rate cut opens up greater room for monetary policy adjustments in China, potentially leading to further easing measures [6] - The attractiveness of RMB assets is expected to increase, potentially drawing more international capital back to China [6]

Group 1 - Morgan Stanley's baseline view is that U.S. GDP growth will slow to around 1% by Q4 2025, with only a slight increase in 2026, indicating that U.S. economic growth may not surpass that of other regions [1] - A recent weak labor market report highlights stagnation in hiring activity, underscoring the downside risks to economic growth [1] - The market is digesting significant risks associated with further easing policies from the Federal Reserve, with expectations that lower rates will stimulate foreign investors to hedge their dollar assets, potentially supporting the dollar [1] Group 2 - Concerns regarding the sustainability of public finances in countries like France and the UK are increasing the term premium on the yield curve, putting pressure on the euro and pound, while the U.S. is also affected by these fiscal trends [2] - A key risk for the dollar is the growth outlook and uncertainty surrounding monetary and public policy, with expectations that the dollar will weaken for the remainder of the year [2]

Core Viewpoint - The President of the San Francisco Federal Reserve, Daly, supports the idea of easing monetary policy next month, with a reasonable expectation of two rate cuts this year [1] Economic Indicators - The Producer Price Index (PPI) in July unexpectedly accelerated, marking the largest increase in three years, with a month-on-month rise of 0.9% and a year-on-year increase of 3.3%, both exceeding market expectations [1] - The rise in PPI indicates that businesses are passing on higher import costs associated with tariffs, suggesting that inflationary pressures are far from over [1] Retail Sales Performance - U.S. retail sales in July exceeded expectations, driven by strong automobile sales and major online promotions, indicating increased consumer spending and boosting optimism about U.S. economic growth [1] Monetary Policy Outlook - Daly noted that while the labor market is gradually slowing and the economy is decelerating, it has not yet stalled, and inflation remains above the Federal Reserve's target, suggesting potential rate cuts later this year [1] - Daly expressed concern about delaying necessary support for the labor market due to fears of persistent inflation, advocating for a balanced approach to monetary policy [1] - However, she opposed the necessity of a 50 basis point cut at the September meeting, indicating that such a move would signal an emergency situation, which she does not believe is warranted given the current labor market conditions [1]

Core Viewpoint - UBS forecasts that the US economy is expected to maintain a growth rate of around 3% over the next few quarters, supported by three main pillars: strengthened capital expenditure, structural improvements in the labor market, and adjustments in fiscal policy [1][2] Group 1: Capital Expenditure - Capital expenditure has shown significant growth of 13%-14% in the first half of the year, driven by tax incentives such as 100% expensing for capital expenditures and construction [1] - The efficiency of capital formation is seen as a key factor in driving productivity growth, with an expected annual productivity growth rate stabilizing at around 2% or slightly lower [1] Group 2: Labor Market - The labor supply growth is projected to stabilize in the range of 0.7%-0.8%, benefiting from improved legal immigration policies and increased participation rates among older individuals [1] - Structural adjustments in policies, such as the elimination of tip taxes and overtime taxes, are creating positive incentives for the labor market [1] Group 3: Fiscal Policy - The US fiscal budget showed a surplus of approximately $20 billion in June, an improvement of nearly $90 billion compared to the same period last year [1] - The withdrawal of student loan forgiveness is expected to save about $150 billion in fiscal spending this year, providing financial space for labor market expansion [1] Group 4: Counterarguments to CBO Predictions - UBS refutes the pessimistic forecasts of the Congressional Budget Office (CBO), arguing that actual productivity growth is closer to 2% and labor growth can reach 0.7%-0.8%, which together support the 3% GDP growth [2] - The report criticizes the notion that tariffs have a secondary effect on inflation, stating that most tariff costs have been absorbed by exporters, with only a one-time adjustment reflected in domestic price levels [2] Group 5: Infrastructure Investment - The government is accelerating infrastructure investment by simplifying building permit processes and implementing 100% expensing policies for factories and data centers, addressing long-term weaknesses in US construction investment [2] - The expected reduction in the fiscal deficit is anticipated to be significantly smaller than last year's levels, aided by improvements in budget surplus and spending optimization [2]

Group 1 - The gold price experienced significant volatility last week, influenced by multiple factors, leading to both cautious and optimistic market outlooks [1] - Early last week, gold prices fell below the critical level of $3300 per ounce due to stronger-than-expected US GDP growth and hawkish comments from Federal Reserve Chairman Jerome Powell [1] - The recent revision of US non-farm payroll data altered the previously weak trend of gold prices [1] Group 2 - Citibank raised its gold price forecast for the next three months from $3300 to $3500 per ounce, adjusting the expected trading range from $3100-$3500 to $3300-$3600 [3] - Concerns regarding US economic growth and tariff-related inflation are expected to intensify in the second half of the year, alongside a weakening dollar, which will support a moderate rise in gold prices [3] - Adrian Day, President of Adrian Day Asset Management, believes that the US job market is not as stable as suggested by Powell, and the new employment data increases the likelihood of a Fed rate cut in September, which may lead to a continued rise in gold prices [3] Group 3 - Gold is traditionally viewed as a safe-haven asset during periods of political and economic uncertainty, often performing well in low-interest-rate environments [3] - David Morrison, Senior Market Analyst at Trade Nation, suggests that gold prices need to consolidate for a period before gaining momentum to break through the $3400 level [3] - Chris Vecchio, Head of Futures Strategy and Forex at Tastylive, indicates that tariffs will also have a significant impact on market confidence in gold [4]