Report Industry Investment Rating No relevant content provided. Core Views - This year, global funds have generally flowed out of US dollar assets and returned to their home markets. The spill - over of US dollar liquidity has led non - US markets to generally outperform US assets. However, with the easing of geopolitical tensions and the resurgence of the "US Exceptionalism," there are new changes in global capital flows. After the cooling of the Middle East situation, funds temporarily flow back to risk assets. The prospect of a soft landing in the fundamentals and the resurgence of the AI narrative may continue to support the performance of the US stock market. If the Hong Kong Monetary Authority recovers Hong Kong dollar liquidity, it may put short - term pressure on the Hong Kong stock market. In the short term, the cooling of geopolitical conflicts and the dovish stance of the Fed have led to the repair of global risk appetite and the rise of easing expectations. Equity assets may be favorable in the short term, while crude oil and gold may face some correction pressure [1][2]. Summary by Related Catalogs Global Capital Flow and Asset Performance - Global funds have flowed out of US dollar assets this year. According to TIC data, in April, overseas investors reduced their holdings of medium - and long - term securities by $88.9 billion, including $59.2 billion in US stocks and $46 billion in US Treasury bonds. Canada and the Chinese mainland had relatively large reduction scales [8]. - European stocks are the most benefited assets under the weak US dollar due to friendly policies, low - level fundamental repair, and frequent capital rotation between the US and Europe. European investors have continuously reduced their holdings of US stocks and returned to their home markets this year. The recent 3 - month rolling net capital inflow into European stocks has reached a high since 2010 [12]. - Multiple funds support the liquidity of the Hong Kong stock market, including foreign capital inflows, southbound funds, and the liquidity injection by the Hong Kong Monetary Authority. The recent rise of the Hong Kong stock market is more of a valuation repair due to abundant liquidity. However, if the Hong Kong Monetary Authority recovers Hong Kong dollar liquidity, it may put short - term pressure on the Hong Kong stock market, but the long - term impact is limited [14][29]. - A - share market has abundant off - market liquidity and low opportunity cost, with active on - market funds. Since April, the trading sentiment has weakened, and the market is mainly in a state of stock game. Recently, large - finance (high - dividend), small - cap stocks have led the rise, and themes are active [21][31]. Short - term Changes in Global Liquidity - The cooling of the Middle East situation has improved market risk appetite, and funds have temporarily flowed back to risk assets. Risk - aversion assets are under pressure, and the focus will shift to fundamental data and the Fed's monetary policy stance [23]. - The "US Exceptionalism" has recovered. The prospect of a soft landing in the fundamentals and the resurgence of the AI narrative may support the US stock market. "De - dollarization" may be postponed. In the short term, the net inflow of funds into US stocks has stabilized and rebounded, and the inflow of funds into US Treasury bonds is generally stable [23]. - The Hong Kong dollar has touched the weak - side guarantee. If the Hong Kong Monetary Authority recovers Hong Kong dollar liquidity, it may put short - term pressure on the Hong Kong stock market. The subsequent depreciation pressure of the Hong Kong dollar may come from the appreciation of the US dollar and capital outflows from the Hong Kong stock market [29]. Market Condition Assessment - Domestic: Port throughput has slightly converged, the supply and demand in the construction industry are weak, and housing prices need to stabilize. Externally, the US consumption and real estate sectors face downward pressure, the impact of tariffs is gradually emerging, economic growth is slowing down, and the Fed has raised its inflation forecast [38][39]. - Overseas: US retail sales in May decreased by 0.9% month - on - month (previous value - 0.1%), industrial output decreased by 0.2% month - on - month (previous value 0.1%), and the housing start - up rate in May dropped to a five - year low, down 9.8%. The Fed maintained the interest rate unchanged, lowered the GDP growth forecast for 2025 to 1.4%, and raised the core inflation forecast to 3.1% [39]. Configuration Suggestions - For large - category assets: In the short term, equity assets may be favorable, while crude oil and gold may face correction pressure [34]. - For the domestic bond market: The recent keyword is more upward direction, limited space, and emphasis on micro - operations. The yield of 10 - year Chinese bonds is approaching 1.6%, and small opportunities can be grasped from curve convex points and "micro - operations" [34]. - For the domestic stock market: Policy strength and performance drivers need to be realized. Continue to trade along industrial hotspots, policy expectations, and "high - to - low" rotations [35]. - For US Treasury bonds: The cooling of the US economy may bring short - term opportunities for US Treasury bonds. It is recommended to lay out 10 - year US Treasury bonds when the yield is above 4.5%, and the 2 - year variety is relatively more stable [35]. - For US stocks: Although the short - term sentiment is strong, the valuation has been repaired to a historical high, and there is still downward pressure on earnings. Pay attention to the return of the AI narrative and avoid tariff - affected sectors [36]. - For commodities: After the supply concerns are alleviated, commodities are generally under pressure and will gradually return to fundamental pricing. It is recommended to buy gold on dips, and crude oil is expected to be weak in the short term. It is judged that copper is better than oil [36]. Follow - up Concerns - Domestic: June official manufacturing PMI, June Caixin manufacturing PMI, and the Summer Davos Forum [52]. - Overseas: A series of US economic data including May new home sales, initial jobless claims for the week ending June 21, etc., as well as economic data from the eurozone, the UK, and Japan [54].

Core Viewpoint - The article discusses the impact of the U.S. debt ceiling on Treasury supply and liquidity, predicting a potential increase in 10-year Treasury yields to 4.8% after the debt ceiling issue is resolved, driven by supply-demand imbalances and resilient inflation [1][2]. Group 1: Economic and Policy Analysis - Since mid-January, the debt ceiling has limited Treasury supply, leading to a liquidity turning point and a decrease in the 10-year yield from 4.8% to around 4.2% [1]. - The uncertainty surrounding Trump's policies has negatively impacted market confidence, but recent data suggests economic resilience, with stable housing demand and a rebound in job creation [4][14]. - The article anticipates that the pessimistic sentiment regarding the economy may bottom out in the second quarter, aided by the potential implementation of tax cuts and deregulation policies [4][5]. Group 2: Fiscal Outlook - The fiscal deficit has not shown signs of reduction, with the cumulative deficit for the first five months of the fiscal year reaching $1.15 trillion, compared to $828.1 billion in the same period last year [18][20]. - The proposed "One Big Beautiful Bill" could further increase the deficit, with a projected net increase of approximately $2.8 trillion in the basic deficit by 2034 [24][25]. Group 3: Monetary Policy and Liquidity Risks - The article highlights that the debt ceiling has led to a tightening of liquidity, with the Federal Reserve preparing for potential liquidity risks as the debt ceiling is expected to be resolved by June [27][28]. - The Fed has already begun to slow down its balance sheet reduction, decreasing the monthly reduction from $250 billion to $50 billion [28]. Group 4: Supply and Demand Analysis - The supply of Treasuries is expected to increase post-debt ceiling resolution, with projected net financing of approximately $1.4 trillion in the third quarter [27][33]. - Demand for Treasuries remains weak, with significant reliance on money market funds, while foreign demand has decreased, particularly from key countries like Japan and the UK [36][39]. Group 5: Interest Rate Projections - The article predicts that long-term interest rates will continue to rise, potentially exceeding 4.8% after the debt ceiling is resolved, due to increased supply and persistent demand shortages [45][46]. - The anticipated economic recovery and potential tax cuts may support higher nominal growth rates, which could lead to an increase in interest rates [47][58].

Core Viewpoint - The article discusses the significant shifts in global markets and U.S. economic policy, particularly focusing on the transition from Biden's economic strategies to Trump's proposed "Great Reset" aimed at addressing the issues left by the previous administration [2][9]. Group 1: Biden's Economic Cycle - The "Biden Cycle" involved massive fiscal stimulus post-pandemic, leading to high growth, high interest rates, and a booming stock market, which attracted foreign capital and supported a strong dollar [2][3]. - However, this cycle has two critical flaws: the risk of high debt and increasing wealth inequality, which could lead to a long-term depreciation of the dollar if the dual deficits exceed a certain threshold [3][6][8]. - The wealth disparity has worsened, with the top 10% benefiting from asset appreciation while the bottom 50% face rising costs of living, undermining the "American Dream" [7][8]. Group 2: Trump's Great Reset - Trump's approach, termed the "Great Reset," aims to reduce government spending, deregulate financial markets, and adjust international trade policies to revive the middle class [11][13][15]. - The reset seeks to shift the capital structure from financial to industrial capital, addressing the high debt levels by controlling new debt and restructuring existing debt [16][18]. - Key strategies include significant cuts to government spending, encouraging private sector leverage, and reintroducing tariffs to bring manufacturing jobs back to the U.S. [13][14][15]. Group 3: Implications for Financial Markets - The article highlights the potential for a significant shift in the dollar's role in global finance, as reduced U.S. trade deficits could lead to decreased demand for dollar assets, challenging the high valuations of U.S. equities [47][48]. - Trump's policies may lead to a scenario where the dollar loses its safe-haven status, with both the stock market and the dollar potentially declining together [50]. - The article warns of a "triple kill" risk for U.S. stocks, bonds, and the dollar, particularly if the debt ceiling is resolved without debt restructuring, which could trigger market volatility [52]. Group 4: Future Scenarios - The potential for a "Hail Mary" approach, such as the "Mar-a-Lago Agreement," could involve restructuring U.S. debt with other nations in exchange for tariff concessions [53]. - If traditional monetary policy tools like interest rate cuts fail, the Federal Reserve may resort to quantitative easing or yield curve control to stabilize the economy [54]. - The article concludes that the outcome of Trump's policies could either lead to a new era of prosperity or exacerbate existing issues, with significant implications for asset valuations and market stability [56][58].

Core Viewpoint - The article discusses the potential economic and financial implications of Trump's "Great Reset," focusing on the need to address wealth inequality and high government debt through a rebalancing of capital structures and inflationary measures [3][4]. Group 1: Trump's Economic Framework - Trump is seen as attempting to tackle two fundamental issues: the significant wealth gap and the historically high government debt burden [3][4]. - The "Great Reset" aims to adjust the relationship between industrial and financial capital, promoting a shift from financialization to re-industrialization [4][18]. - Without substantial productivity improvements, the policy path is likely to lead to global capital rebalancing, inflationary pressures, dollar depreciation, and financial repression [4][31]. Group 2: Debt and Financial Market Dynamics - The U.S. government debt held by the public is approaching 100% of GDP and is projected to rise to 117% over the next decade, with a persistent deficit rate around 6% [22][26]. - The article highlights the potential for liquidity "drain" and increased volatility in financial markets following the resolution of the debt ceiling, which could trigger risks for high-leverage and credit investors [4][28]. - The anticipated supply shock of U.S. Treasury bonds post-debt ceiling resolution may lead to rising interest rates and liquidity challenges, exacerbating risks in the credit market [28][30]. Group 3: Market Outlook and Asset Reallocation - The article predicts the end of the "U.S. exceptionalism" narrative in the stock market since 2012, with European and emerging markets, particularly China, poised for a trend revaluation [5][39]. - A shift in market style is expected, favoring sectors representing industrial capital such as industrials, materials, energy, and consumer goods over those representing financial capital [5][36]. - The article suggests that the valuation of U.S. stocks may decline, with a transition towards value-oriented investments outperforming growth stocks [36][39]. Group 4: Implications for Global Capital Flows - The "Great Reset" is likely to lead to a rebalancing of global capital flows, with a potential outflow from U.S. assets as the dollar weakens [33][39]. - The article emphasizes that the depreciation of the dollar may manifest more significantly against a basket of physical assets, including commodities and strategic resources [33][34]. - Emerging markets, especially China, are expected to benefit from a weaker dollar, which could enhance local demand and attract foreign investment [39].

Market Overview - On March 3, cryptocurrencies experienced a sudden surge, with Bitcoin rising over 7.7% and Ethereum increasing by more than 11% [1][2] - Notable price movements included ADA soaring by 63.6% and XRP jumping by 28.1% [1][2] Liquidation Events - Over the past 24 hours, more than 180,000 traders were liquidated, with a total liquidation amount of approximately $828 million [2] - The liquidation breakdown showed significant losses across various time frames, with $830 million liquidated in 24 hours, including $280 million from long positions and $550 million from short positions [3] Regulatory Developments - President Trump announced that XRP, Solana (SOL), and Cardano (ADA) will be included in the U.S. cryptocurrency reserves [5][8] - A new working group was established to assess the feasibility of creating a national digital asset reserve and to develop a regulatory framework for the cryptocurrency industry [6][7] Market Sentiment and Reactions - The recent surge in cryptocurrency prices is seen as a response to the Biden administration's regulatory stance on the crypto industry [7] - Trump's upcoming cryptocurrency summit on March 7 aims to further solidify his support for the crypto sector [10] Historical Context - The cryptocurrency market faced a significant downturn prior to the recent surge, with Bitcoin dropping over 5% on February 26, reaching below $84,000, a nearly 20% decline from its January peak [13][16] - The market's volatility was exacerbated by a major hacking incident at Bybit, which resulted in the loss of over $1.5 billion in assets, triggering panic among investors [16][19]

Core Viewpoint - Bitcoin has experienced a significant decline, dropping nearly 40% from its peak of around $110,000 on January 20 to a low of approximately $80,000 on February 28, marking its lowest level since November 2024 [1][5] Market Performance - Other cryptocurrencies have also seen declines, with Ethereum dropping over 7.6% [2] - Bitcoin's price on February 28 was $80,472, reflecting a 4.95% decrease in the last 24 hours, with a trading volume of approximately $137.1 billion, down 10.24% [3] - In the past week, Bitcoin's price has fallen over 10%, while Ethereum has dropped 15.87% and SOLUSD has decreased by 15.97% [5] Liquidation Events - Over 200,000 traders were liquidated in the past 24 hours, with total liquidation amounting to $803 million (approximately 5.85 billion RMB) [3] - The liquidation data continues to rise, indicating ongoing market volatility [3] Causes of Decline - A significant sell-off in U.S. Bitcoin funds, particularly the iShares Bitcoin Trust, which saw a record outflow of $418 million on February 26, has contributed to the market downturn [8] - The recent hacking incident involving Bybit, where over $1.5 billion worth of cryptocurrencies were stolen, has heightened market fears regarding the security of digital assets [8][9] - The lack of substantial regulatory support from the new Trump administration has led to decreased investor enthusiasm, contributing to the price drop [9][10] Market Sentiment and Future Outlook - Analysts are divided on whether Bitcoin will rebound or continue to decline, with market sentiment playing a crucial role [6] - Some analysts have issued bearish warnings, indicating that the reversal in futures pricing for Bitcoin and Ethereum suggests weakening demand [11] - The potential for Bitcoin to be included in U.S. strategic reserves remains uncertain, with experts suggesting that such a move is unlikely due to the inherent volatility and risks associated with Bitcoin [12] - Despite the current pressures, there is a possibility of a structural rebound in the medium to long term, contingent on market conditions and potential policy changes from the Trump administration [12]