Report Industry Investment Rating No relevant information provided. Core Viewpoints - The complexity,产业链, and price trends of commodities are analyzed, and the relationship between commodity prices and various economic factors is explored [6][10][14]. - The impact of geopolitical conflicts, supply - demand balance, and economic cycles on oil prices is discussed, and future oil price trends are predicted [42][58]. - The supply - demand situation, price trends, and influencing factors of various commodities such as power coal, natural gas, aluminum, and copper are analyzed [98][106][120][166]. Summary by Relevant Catalogs Commodity Classification and Characteristics - Commodities are divided into physical and non - physical commodities, including energy, metals, agriculture, and financial rights [5]. - Commodities have complexity,产业链 characteristics, and price trends related to economic cycles, with factors such as supply - demand, geopolitics, and interest rates affecting prices [6][10]. Commodity Prices and Economic Factors - Gold has long - term value - preservation functions, and the price CAGR of some resources increased from 2020 - 2024 due to various factors [14]. - The price trends of commodities are related to GDP, inflation, and economic cycles, with industrial commodities showing higher cycle fluctuations than agricultural products [14][19]. - The price cycles of commodities have characteristics such as turning points, duration of prosperity and recession, and are affected by factors like supply shocks and technological progress [24]. Oil Price Analysis - The relationship between oil prices and factors such as the Fed's interest rate, U.S. Treasury yields, inventory, and geopolitics is analyzed [10][33][42]. - Future oil price trends are predicted based on supply - demand balance, geopolitical conflicts, and economic cycles, with oil prices expected to be relatively strong in 2024 and oscillate downward in 2025 [42]. Other Commodity Analysis - Power coal supply - demand is relatively balanced, with prices expected to remain low due to sufficient inventory [98][102]. - Domestic natural gas demand is stable, with supply exceeding demand in some periods, and prices are expected to decline [106][109]. - Aluminum prices are related to PMI, GDP, and CPI, and the supply - demand situation, cost, and profit of the aluminum industry are analyzed [120][131][151]. - Copper prices are affected by factors such as Fed's interest rate policy, supply - demand, and geopolitics, and are expected to be in the range of $9500 - 12000/ton [166][173].

Report Overview - Report Title: "Market Expectation Gap Correction, Potential Switch in Stock-Bond Allocation" [2] - Report Date: July 23, 2025 - Research Team: Fixed Income Research Team - Analysts: Chen Xi, Liu Wei Report Investment Rating - Not provided in the report Core Views - In the second half of 2025, the economic cycle is in an upward phase, similar to 2016 - 2017, in the second half of the L-shaped cycle [5]. - The key to the market rally is the correction of the expectation gap. Currently, the pricing in the stock, bond, and commodity markets is weak, and the upward correction of the market expectation gap may drive the market up [6]. - With the economic expectation correction, there may be a switch between stocks and bonds. The bond yield and the stock market are expected to rise [9]. Summary by Relevant Catalog Economic Upward Trend in H2 2025 - The local debt resolution plan launched in November 2024 may drive the economy to recover continuously, as past debt rectification periods were followed by economic rebounds [5]. - After the digestion of policies from 2021 - September 2024 and structural transformation, the year - on - year growth rate of social financing stock has been rising since November 2024 [5]. - The supply - side anti - involution measure proposed on July 1, 2025, is conducive to the recovery of the PPI year - on - year rate, similar to the 2015 supply - side reform [5]. Market Expectation Gap and Its Impact - As of July 22, 2025, the equity risk premium rate of the Wind All - A Index was 3.14%, at the 72.1% percentile in the past 10 years; the 10 - year Treasury yield was 1.69%, at the 4.0% percentile in the past 10 years; the Nanhua Industrial Products Index was at the 43.2% percentile from 2022 to the present, indicating weak pricing in the market [6]. - The market's weak pricing is based on the view that the full - year GDP target of 5.0% is easy to achieve (with H1 GDP growth at 5.3%), leading to low expectations for H2 policies. However, there is a significant expectation gap in the market's pricing of the economic recovery [6]. - The all - around policies from July 2025 are expected to gradually realize the market's expectation of economic recovery, forming a positive feedback loop for market confidence and expectations [7]. Stock - Bond Switch - The economy is similar to that in 2016 - 2017, in the second half of the L - shaped cycle. The economic growth rate in H2 2025 is not expected to decline significantly, and with the solution of structural problems, there may be a switch between stocks and bonds, with bond yields and the stock market expected to rise [9].

Report Industry Investment Rating - No specific industry investment rating is provided in the report. Core Viewpoints - As of July 21, 2025, the Wind All A Index broke through the high point on October 8, 2024, for the first time [3]. - The key logic for the market rally lies in the fundamental change in policy orientation and the economic cycle being in an upward phase. The current economy is similar to that in 2016 - 2017, in the second half of the L - shaped curve. In the second half of 2025, with no significant economic downturn and the resolution of structural issues, there may be a stock - bond switch, with bond yields and the stock market expected to rise [5][7]. Summary by Relevant Catalogs Market Understanding of the Rally - Industry highlights and thematic market trends may not be sufficient to drive the index up. For example, from 2022 - 2024, there were industry highlights like Huawei's chips in 2023, but the index continued to decline [4]. - The current market rally may not be mainly driven by the "national team" propping up the market. There were previous instances of the "national team" propping up in February 2024, but the market fell again after May 2024 [4]. - The reversal of the "American Exceptionalism" may not be the key factor. Overseas funds may not have flowed into China significantly, and the US and Chinese stock markets are rising in resonance [4]. - Low - interest rates may not drive the stock market up. From 2022 - 2024, bond yields declined, but the stock market fell. A high stock - bond ratio is not a sufficient condition for a rise, as seen from May - September 2024 [4]. Key Logic for the Rally - Policy orientation has undergone a fundamental change. The Politburo meeting in September 2024 marked a policy inflection point, ending the long - term economic de - leveraging from 2021 - 2024 and the local hidden debt rectification from January - September 2024 [5]. - The economic cycle is in an upward phase. After the policy inflection point in September 2024, market confidence has been on an upward path. Currently, it is similar to the second and third quarters of 2016, with significant upward potential in market expectations [5]. - The policy aims to stabilize the demand side and solve structural problems. Since July 2025, anti - involution policies and urban renewal are similar to the supply - side reform and shantytown renovation from 2016 - 2017. Although it may not drive a large - scale real - estate up - cycle or PPI growth over 7%, real - estate stabilization and positive inflation may boost market expectations [6]. Economic Expectation Revision and Stock - Bond Switch - The current economy is similar to that in 2016 - 2017, in the second half of the L - shaped curve. It has ended the downward phase from 2021 - 2024 and entered a stabilization phase, with the policy addressing structural issues to promote real - estate stabilization and inflation normalization [7]. - In the second half of 2025, with no significant economic downturn and the resolution of structural issues, there may be a stock - bond switch, with bond yields and the stock market expected to rise [7].

Group 1: Financial Data Overview - In the first half of the year, social financing increased by approximately 47,351 billion yuan year-on-year, with RMB loans increasing by 2,796 billion yuan and government bonds increasing by 43,100 billion yuan[1] - As of June, M0 increased by 12.0% year-on-year, M1 by 4.6%, and M2 by 8.3%, with the gap between M1 and M2 growth narrowing to -3.7 percentage points[1] - The balance of RMB deposits in June grew by 8.3% year-on-year, with household deposits increasing by 10.8% and non-financial enterprise deposits by 3.6%[1] Group 2: Social Financing Structure - The social financing balance in June increased by 8.9% year-on-year, with government bonds growing by 21.3% and contributing 0.1 percentage points to the growth rate[2] - RMB loan growth stabilized at 7.0% year-on-year, contributing 0.01 percentage points to the social financing growth rate[2] - The balance of corporate bonds increased by 3.5% year-on-year, while trust loans grew by 5.5%[2] Group 3: Investment Recommendations and Risks - The financial cycle may lead the economic cycle, with M1 and M2 growth rates stabilizing and financial markets showing signs of stability[3] - Attention should be paid to monetary policy operations, financial market changes, and price movements during this phase[3] - Risks include potential changes in policy rhythm and insufficient monetary transmission effects[4]

Core Insights - The report emphasizes that identifying the performance inflection point is crucial for the market to move out of the bottom-seeking phase, with market bottoms typically leading performance inflection points by 1-2 quarters [3] - The report highlights the importance of combining leading indicators with coincident indicators for better economic bottom assessments, as relying solely on coincident indicators may lead to delayed confirmations of market bottoms [3] - The report indicates that the key to breaking out of the bottom-seeking phase lies in the sustainability of M1 recovery, with household medium and long-term loans being a more critical indicator [3] Economic Indicators - The macroeconomic environment shows slight improvement, with the manufacturing PMI rising to 49.7% in June, still within the contraction zone [5][6] - In June, M1 and M2 both showed year-on-year increases, with M1 at +4.6% (previously +2.3%) and M2 at +8.3% (previously +7.9%), indicating a recovery in excess liquidity [8] - The social financing scale increased by 4.2 trillion yuan in June, which is 900.8 billion yuan more than the same period last year, with a notable recovery in government bonds and RMB loans [10][19] Loan Structure - The report notes a recovery in the loan structure, with household loans showing a year-on-year increase, while medium and long-term loans for households decreased [19] - For enterprises, medium and long-term loans increased year-on-year, and short-term loans also showed recovery, indicating a positive trend in credit structure [19] Market Conditions - The report states that the dual expansion of monetary and credit policies is supporting the A-share market, with signs of improvement in the economic fundamentals [19] - The report suggests that the recovery in leading indicators of the Pring cycle is accompanied by a slight decline in coincident and lagging indicators, indicating a complex market environment [20]

Market Overview - The overall market experienced a slight increase, maintaining a rating of 4.8 stars [1] - Large, mid, and small-cap stocks all saw minor gains [2] - Dividend and value styles showed overall growth, while growth styles remained relatively weak [3][4] - The ChiNext index and other indices experienced declines [5] - Hong Kong stocks also saw slight increases, with technology and dividend indices rising [6] Earnings Growth and Economic Cycles - The duration of bear markets can vary significantly, influenced by economic cycles [7] - The formula for index fund returns is based on valuation, earnings, and dividends, with earnings growth being the primary driver for long-term index increases [8] - For example, the CSI All Share Index was around 2700-2800 points during the 5-star rating period from 2012-2014, and it reached 4800 points in the recent year, despite similar valuations [8][9] - Earnings growth is not uniform; for instance, the year-on-year earnings growth rates for the CSI All Share Index were 4.24% in 2020, 21.88% in 2021, 8.90% in 2022, 0.41% in 2023, and projected at -0.23% for 2024 [10][11] - Economic cycles are not linear, with periods of economic downturn leading to bear markets, while economic upturns correspond to bull markets [13][14] Bear Market Duration - The length of bear markets is closely related to economic cycles [15] - Quick recovery from economic downturns can shorten bear market durations, as seen in 2009 and 2020 [16][17] - Conversely, prolonged economic stagnation can lead to extended bear markets, exemplified by the U.S. stock market's performance from 2000 to 2008 and Japan's market from 1989 [18] - In the last decade, the U.S. market has avoided long bear markets, with no signs of economic downturn as of the first quarter of this year [19] Future Outlook - Understanding the sources of index returns highlights that earnings growth is crucial for long-term index increases, which is significantly influenced by economic cycles [20] - Recent economic policies, such as interest rate cuts and other stimulus measures, are expected to support the recovery of Chinese assets [21] - The CSI All Share Index's earnings grew by 4.46% in the first quarter, indicating a potential return to positive growth [22] Investment Strategy - During periods of economic heat, stock prices tend to rise, making them less attractive for investment [23] - Conversely, during economic downturns, stocks may be undervalued, presenting buying opportunities [25] - The investment strategy remains consistent: buy when prices are low and sell when they are high, while patiently waiting during other times [26]

Core Viewpoint - The current economic situation is increasingly resembling Japan's "lost 30 years," characterized by low interest rates, low inflation, and low growth, leading to potential asset depreciation and wealth loss for the middle class [1][4]. Group 1: Economic Cycles and Historical Context - Industrialized nations typically experience high growth followed by periods of recession, with wealth redistribution often resulting in middle-class decline [1][2]. - Historical examples include the U.S. post-Great Depression, the U.K. during the 1970s stagflation, and Japan's asset bubble burst in the early 1990s, all leading to significant middle-class hardships [1][2][3]. Group 2: Mechanisms of Economic Decline - High growth periods lead to overproduction and overinvestment, fueled by easy money, which eventually results in economic adjustments and impacts the middle class the hardest [2][3]. - The reliance on debt for growth creates vulnerabilities, as asset prices fall while middle-class incomes stagnate or decline, leading to a shrinking middle class [3][4]. Group 3: Wealth Disparity and Investment Strategies - In low-growth environments, wealth disparity increases, with only savvy investors able to find stable, income-generating assets [4][5]. - Japanese high-yield stocks during the "lost 30 years" provided significant returns, demonstrating that even in adverse conditions, there are investment opportunities that can outperform the market [4][5]. Group 4: Recommendations for the Middle Class - The middle class should prepare for potential wealth erosion by focusing on saving and investing in stable, income-generating assets rather than engaging in reckless spending or high-risk investments [5]. - Upcoming discussions will provide insights on how to effectively save and invest in assets that can yield stable returns and ensure financial security [5].

Group 1: Economic Cycle and Currency Performance - The economic cycle consists of four phases: recovery, overheating, stagflation, and recession, each affecting currency performance differently [1][2][3] - In the recovery phase, commodity currencies like AUD and CAD benefit from increased demand for resources, exemplified by China's infrastructure stimulus leading to an 18% rise in iron ore prices [1] - During the overheating phase, high-interest currencies such as USD and BRL gain from aggressive central bank rate hikes, with Brazil's rate reaching 13.75% and BRL yielding an annualized return of 21% [2] - Stagflation sees safe-haven currencies like JPY and CHF perform well due to capital flight to safer assets, with EUR/CHF hitting a ten-year low of 0.94 [3] - In recession, sovereign currencies like USD and SGD strengthen as global deleveraging occurs, with the DXY index rising amid a U.S. tech recession [3] Group 2: Impact of Cycle Transitions on Forex Market - Structural reshaping of interest rate expectations occurs, where USD may depreciate initially during a recession but often rebounds later due to safe-haven demand, with an average increase of 6.2% during recessions from 1970 to 2025 [4] - Cross-market volatility transmission is evident, with significant impacts on JPY and CHF during high VIX periods and a strong correlation between AUD and oil prices during oil price fluctuations [5] - Sovereign currency credit differentiation is highlighted, with strong currencies like USD and CHF attracting capital inflows, while weaker currencies like GBP and TRY face sell-offs when debt-to-GDP exceeds 100% [6] Group 3: Trading Strategies for Economic Cycles - A combination of leading, synchronous, and lagging indicators can be used to capture phases, such as a copper-to-gold ratio below 0.25 indicating a potential recession [7] - Arbitrage strategies can be designed based on mismatched cycles, such as going long on USD/JPY and USD/EUR during U.S. overheating against European and Japanese recession, with a projected annual return of 23% [7] - Tail risk hedging involves buying USD call options and gold futures if recession or stagflation probabilities exceed 65% [8] Group 4: Future Outlook and Currency Dynamics - New variables like digital currency interest rates and supply chain regionalization are expected to impact traditional models, with the digital dollar rate reaching 5% attracting capital back [9] - Climate inflation factors, such as El Niño affecting agricultural output, may increase food CPI and pressure the Australian central bank to raise rates, leading to increased AUD volatility [9] Group 5: Trading Principles for Cycle Strategies - Maintain a low position (<15%) during phase ambiguity, such as fluctuating PMI around the threshold [10] - Focus on policy discrepancies rather than economic discrepancies, as seen with the European Central Bank lagging behind the Federal Reserve by an average of four months [10] - Utilize options to create asymmetric risk profiles, such as buying deep out-of-the-money USD call options at low premiums for high potential returns [10] - Market misjudgments regarding cycle phases can significantly influence currency movements, as demonstrated by the EUR's 7% drop followed by a sharp rebound in June 2025 [10] Group 6: Conclusion - The influence of economic cycles on forex is complex, driven by policy expectations, capital flows, and market reflexivity [11] - Identifying early signals and utilizing a "volatility prism" can lead to sustained profitability in the evolving landscape of sovereign credit shaped by digital currencies [11]

Core Insights - The fierce competition between Taobao Flash and Meituan has led to significant discounts and promotions in the food delivery sector, with both platforms investing heavily in attracting users [2][4] - Taobao Flash achieved over 200 million daily active users, while Meituan processed 120 million orders in a single day, indicating a surge in consumer engagement [4] - The price of certain products, such as wine, has drastically decreased, with some being sold for as low as 8.95 yuan, raising questions about sustainability and quality in the market [5][9] Group 1: Market Dynamics - The competition has intensified in the instant retail sector, particularly for food and beverage items, with a focus on ready-to-eat meals and packaged products like wine [9] - The trend of lower prices and increased accessibility may encourage more consumers to try wine, despite concerns about quality and supply chain integrity [9][10] - The shift in consumer behavior towards immediate gratification is reshaping the retail landscape, with a growing preference for on-demand purchases rather than stockpiling [10][12] Group 2: Economic Context - The current economic climate has led to a cautious consumer mindset, where low prices serve as effective marketing tools to stimulate demand [12][13] - The historical context of the wine market in China reflects a transition from high-profit margins during economic booms to a focus on efficiency and competitive pricing during downturns [13][15] - The future of the wine market may hinge on achieving a balance between reasonable profits and consumer choice, as the industry navigates through economic cycles [15]

Group 1: Company Fundamentals - The company's fundamentals are crucial, with financial statements reflecting operational performance, such as revenue indicating business results and net profit showcasing profitability [1] - Analyzing the balance sheet helps assess the asset and liability structure, evaluating the company's debt repayment ability [1] - The quality of the management team is vital, as effective leaders with market insight and decision-making skills can drive long-term strategic planning and resource allocation [1] - A sound governance structure ensures robust internal controls and risk management, protecting shareholder interests and maintaining operational stability [1] Group 2: Industry Development Trends - Industry development trends significantly impact stock investment, with emerging sectors like renewable energy and artificial intelligence attracting substantial capital [2] - Mature or declining industries face challenges such as market saturation and intense competition, limiting growth potential [2] - Understanding the competitive landscape, including market share and competitive advantages, is essential for assessing a company's position and growth prospects within its industry [2] Group 3: Macroeconomic Environment - The macroeconomic environment is a critical external factor affecting stock investment, with economic cycles directly influencing industry and company performance [3] - During economic expansion, strong consumer demand typically leads to increased corporate profits and rising stock markets, while economic downturns result in lower consumer spending and poor stock performance [3] - Monetary and fiscal policies play significant roles, with loose monetary policy enhancing market liquidity and fiscal measures stimulating economic growth, thereby impacting stock prices [3] - Factors like exchange rates and inflation also indirectly affect stock investments, influencing profits for export-oriented companies and altering asset allocation preferences [3] Group 4: Risk Control - Risk control is a continuous focus in stock investment, as market risks are inherent and can lead to significant price volatility [4] - Companies face various risks, including operational risks that can affect profitability and market reputation [4] - Diversification is a strategy to mitigate risk, encouraging investors to build a varied portfolio across different industries and company sizes to balance potential losses [4]