So, what are the real implications of this hotter than expected PPI report. So, CPI, it was a bit mixed. Uh, headline was better than expected, but core was a bit hotter.And people said, well, it was just better than feared. This one's a lot worse than feared. Does this take a 25 basis point cut off the table. Does it officially eliminate the idea of a 50 basis point cut where was kind of that became kind of a whisper conversation going on as well. Look, I think a 50 basis point cut was never really that mu ...

Market Trends & Analysis - ETH price is up 19% on the week, teasing all-time high, with a potential target of $10,000 to $20,000 in the next 6-8 months [26][33] - Bitcoin hit a new all-time high of $124,500, but is currently at $17,700, up 1% on the week [21] - The Producer Price Index (PPI) number was 37%, higher than the estimated 29%, indicating inflation running hotter [13] - Tom Lee projects ETH to reach $7,500 by the end of the year [36] Institutional Adoption & Investment - ETH ETFs experienced a billion-dollar inflow day, significantly higher than Bitcoin's initial ETF flows, with total ETH ETFs at $12 billion [39][40] - Harvard revealed holding $116 million in BlackRock Bitcoin ETFs, indicating institutional adoption of crypto assets [42] - Tom Lee accumulated 1 million ETH in his treasury vehicle over a 30-day period [45] - Bitmine aims to raise $20 billion to acquire more ETH, targeting 5% of the total ETH supply [45] Technological Developments & Blockchain Infrastructure - Stripe and Circle are launching their own Layer 1 blockchains, Tempo and Arc respectively, for stablecoin payments and capital markets [4][46][48] - Coinbase added DEX trading to its app, allowing access to any token on Aerodrome, excluding New York State [4][51] - Uniswap Foundation proposed a legal structure known as a DUNA under Wyoming law, potentially paving the way for the fee switch [51] Regulatory & Legal Landscape - Banks are demanding exclusion for yield-bearing stablecoins in the Genius Act, fearing loss of interest revenue [4][50] - Do Kwon pleaded guilty to fraud charges related to Terra Luna's $80 billion collapse, facing up to 12 years in prison [55][57] Security & Network Concerns - Monero experienced a 51% attack, highlighting vulnerabilities in proof-of-work networks, with the attacker bribing miners to acquire hash rate [4][59][61] - The US government, through Scott Bessant, will establish a strategic Bitcoin reserve using confiscated assets, estimated between $15 billion and $20 billion [50]

Group 1 - The core viewpoint is that recent policies aimed at expanding domestic demand and boosting consumption are showing positive effects, leading to improvements in market supply and demand relationships and some positive price changes [1][2] - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline of 0.1%, with industrial consumer goods prices rising by 0.5%, an increase of 0.4 percentage points from the previous month [1] - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline was narrowed by 0.2 percentage points compared to the previous month, marking the first contraction in the rate of decline since March [1] Group 2 - The prices of coal, steel, cement, photovoltaic products, and lithium battery manufacturing saw a reduction in month-on-month decline rates by 0.1 to 1.9 percentage points, contributing to a decrease in the downward pressure on PPI by 0.14 percentage points compared to the previous month [1] - Despite external uncertainties and competitive pressures in some domestic industries, the foundation for reasonable price recovery is being strengthened by more proactive macro policies and ongoing actions to boost consumption [2]

Economic Overview - The national economy is maintaining a steady and progressive development trend, with continuous growth in production and demand, and overall stability in employment and prices [1][3] Employment and Unemployment - The urban surveyed unemployment rate stands at 5.2%, consistent with the average value [3] Price Indices - The Consumer Price Index (CPI) shows a change of 0.0, indicating no inflation [3] - The Producer Price Index (PPI) has decreased by 3.6%, compared to a previous decrease of 2.9% [3]

Group 1 - The essence of the "anti-involution" policy is "correction" rather than "stimulation," aiming to reshape the logic of industrial competition [2][6] - The impact of the "anti-involution" policy on prices is structural and mild, with future price trends dependent on the strength of demand recovery and the pace of policy coordination [2][6] - The "anti-involution" policy aims to address low-price disorderly competition in certain sectors rather than driving up prices, as the fundamental factor determining prices remains supply and demand [2][3] Group 2 - Since the beginning of the year, signals of the "anti-involution" policy have been continuously reinforced, with various measures taken to address "involution-style" competition [3] - The revised Anti-Unfair Competition Law prohibits selling goods below cost, providing a legal basis for combating "involution-style" competition [3] - Recent data shows that the Producer Price Index (PPI) has maintained a low level of -3.6% year-on-year in July, but the month-on-month decline has narrowed, indicating some stabilization in industrial prices [4] Group 3 - The Consumer Price Index (CPI) remains weak overall, but the core CPI has rebounded for three consecutive months, benefiting from reduced price wars in the automotive and home appliance sectors [4] - The improvement in PPI is primarily seen in upstream raw materials and industrial products, which have a low direct correlation with consumer spending [5] - The transmission mechanism from PPI to CPI remains ineffective, as insufficient terminal consumer demand limits companies' pricing power [5]

Group 1 - The core point of the news is the significant impact of the July PPI data on market expectations regarding interest rate cuts by the Federal Reserve, leading to a shift in sentiment away from aggressive rate cuts [1][2] - The July PPI year-on-year rate increased to 3.3%, up from a previous value of 2.4%, and the month-on-month rate rose to 0.9%, compared to a previous value of 0.00% [1] - The PPI data has created uncertainty for the Federal Reserve's interest rate decisions, with the probability of a 25 basis point cut in September dropping to around 85% from 100% [2] Group 2 - The communication from Federal Reserve officials before and after the PPI data release indicates a strategic effort to maintain policy flexibility and manage market expectations regarding rate cuts [3] - The remarks from San Francisco Fed President Daly and St. Louis Fed President Bullard suggest a cautious approach to potential rate cuts, with concerns about inflation pressures from tariffs [3] - The market reaction to the PPI data included a halt in the upward trend of U.S. stocks, a significant drop in gold prices, a decline in Bitcoin, and a sell-off in U.S. Treasuries, while the dollar index recovered its previous losses [3]

Inflation Data Analysis - Headline CPI came in below expectations at 27%, while core CPI, excluding food and energy, was higher than anticipated at 31% [1] - Markets focused on the headline CPI number, leading to an equities rally and a drop in 2-year yields [2] Monetary Policy Outlook - Weak unemployment data reported on August 1st raised concerns about disinflation [2] - Prior to the CPI release, Fed funds futures priced in an 82% chance of a 25 basis point cut at the September 17th FOMC meeting [3] - Post CPI release, the probability of a 25 basis point cut at the September 17th FOMC meeting surged past 90%, with markets pricing in 60 basis points of easing by the end of 2025 [3] - PPI data on August 14th and retail sales data on August 15th are expected to provide a clearer picture of the Fed's coming moves [3]

Inflation Analysis - The producer price index (PPI) increased significantly from approximately 23% to 33% year-over-year, a full percentage point increase, exceeding market expectations of 25% [3][4] - The consumer price index (CPI) saw a smaller increase, rising from 267% to about 273% [3] - PPI measures inflation upstream at the production or wholesale stage, while CPI measures it downstream at the consumer level [6][7] - While upstream prices are increasing, it remains to be seen if these costs will be passed on to consumers and reflected in CPI [8][9] - Food and beverage inflation remained relatively stable, while housing inflation decreased, masking increases in other categories such as medical care and recreation [17][18][19] - Housing inflation accounts for approximately two-thirds of overall CPI [20] Market Impact and Monetary Policy - The surge in PPI caused market sell-offs, particularly around 8:30 AM when the data was released [17][33] - Despite the PPI increase, the market still anticipates a rate cut in September, with approximately a 90% probability, although this was previously higher at 97% or 98% [23] - The report suggests that even with a rate cut, the long end of the yield curve may increase due to inflation concerns [24] - Cutting rates with rising inflation may not improve the housing market and could potentially worsen it [27] Consumer Behavior - Sales are declining at some stores like Chipotle, Cava, and Sweetgreen, indicating that consumers may be unwilling to pay higher prices [10][11][13][14] - Lower-end pizza chains are experiencing increased demand, suggesting consumers are seeking more affordable options [12][15]

Interest Rate Outlook - The market initially anticipated three Federal Reserve rate cuts at the beginning of the year, but expectations have been adjusted downwards to potentially just one cut [3] - The CME FedWatch Tool indicates a 96% probability of a 25 basis point rate cut and a 4% probability of a 50 basis point cut [2] - Inflation data, including CPI and PPI, suggests persistent inflationary pressures, potentially hindering the Federal Reserve's ability to implement rate cuts [4] - The Federal Reserve's data-driven approach implies that unfavorable data could further delay anticipated rate cuts [6] Market Sentiment and Risk - The market exhibits signs of frothiness, evidenced by bullish IPOs, record highs in Bitcoin, and upside movements in Ether [7][8] - Market broadening could be a positive sign, as returns have been concentrated in a small segment of the market, making it fragile [9] - Market momentum and sentiment are vulnerable to sudden shifts, and a catalyst could trigger a downturn [10] - Confidence in data, policy, and the functioning of markets is crucial for sustaining market sentiment [12][13] Geopolitical Considerations - While the Russian economy may not directly impact the US economy, a meeting between the US President and the Russian President could influence market sentiment [10][11]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The market is currently focusing on the semi - annual reports of listed companies. The net profit growth rates of the four major broad - based indexes are showing positive growth, and the improvement of the fundamentals of some listed companies supports the stock market. However, one should be wary of the drag on the index performance caused by the profit decline of companies that have not yet released their financial reports. - With the high valuation of US stocks, A - shares with more reasonable valuations continue to attract foreign capital inflows, injecting incremental funds into the market. - Although the market faces certain pressure near the previous stage high, the trading volume has not significantly declined. After a short - term consolidation, A - shares still have the potential to rise. It is recommended to buy on dips with a light position for the medium - to - long - term [2]. 3. Summary by Related Catalogs 3.1 Futures Disk - **Contract Prices**: IF (2509) is at 4163.8, down 0.8; IH (2509) is at 2829.6, up 13.6; IC (2509) is at 6380.2, down 64.2; IM (2509) is at 6929.2, down 66.2. - **Contract Spreads**: IF - IH spread is 1344.6, down 18.6; IC - IF spread is 2259.0, down 65.6; IM - IC spread is 557.4, down 1.0. - **Quarter - to - Month Spreads**: IF (quarter - month) is - 33.8, up 4.4; IH (quarter - month) is 1.8, down 2.2; IC (quarter - month) is - 188.6, up 14.0; IM (quarter - month) is - 234.0, up 8.2 [2]. 3.2 Futures Positions - IF top 20 net positions are - 26,185.00, down 2544.0; IH top 20 net positions are - 16,055.00, down 1890.0; IC top 20 net positions are - 15,324.00, down 2013.0; IM top 20 net positions are - 49,157.00, down 3751.0 [2]. 3.3 Spot Prices - CSI 300 is at 4173.31, down 3.3; SSE 50 is at 2829.47, up 16.5; CSI 500 is at 6429.85, down 78.3; CSI 1000 is at 6976.49, down 87.9 [2]. 3.4 Market Sentiment - A - share trading volume is 23,062.83 billion yuan, up 1310.72 billion yuan; margin trading balance is 20,462.51 billion yuan, up 117.18 billion yuan; northbound trading volume is 2771.92 billion yuan, up 406.58 billion yuan [2]. 3.5 Industry News - In July, China's CPI turned from a 0.1% decline to a 0.4% increase month - on - month, and was flat year - on - year. The core CPI increased by 0.8% year - on - year, with the growth rate expanding for three consecutive months. PPI decreased by 0.2% month - on - month, with the decline narrowing by 0.2 percentage points from the previous month, and decreased by 3.6% year - on - year, the same as the previous month [2]. 3.6 Key Data to Watch - On 8/14 at 20:30, US July PPI and core PPI data will be released; on 8/15 at 10:00, China's July industrial added value, fixed - asset investment, social consumer goods retail sales, and real estate data will be released [3]