Group 1 - The current total holdings of the world's largest gold ETF, SPDR Gold Trust, stand at 979.68 tons, unchanged from the previous trading day [5] - On September 9, spot gold prices peaked at $3675.01 per ounce, marking a new historical high, before closing at $3626 per ounce, down $9.7 or 0.27% [5] - Geopolitical tensions, particularly involving Israel and Hamas, influenced gold prices, which initially surged before retreating due to rising U.S. Treasury yields [5] Group 2 - Recent economic data revealed a downward revision of 911,000 in U.S. non-farm payrolls, equivalent to a 0.6% decrease, marking the worst performance on record [5] - Analysts suggest that the downward revision of employment data strengthens the case for a Federal Reserve rate cut, with traders currently pricing in an 89.4% probability of a 25 basis point cut in September [6] - Technical analysis indicates that gold may face a correction, with potential support levels at $3600 and $3578, while resistance levels are seen at $3700 and $3750 [6]

Core Viewpoint - The U.S. stock market is currently facing severe overvaluation warnings from nearly all major valuation models, raising concerns that positive news regarding a potential peace agreement between Russia and Ukraine could trigger a sell-off as the market lacks new upward momentum [1][2]. Valuation Metrics - The Buffett Indicator, which measures the total market capitalization against GDP, is currently around 200%, exceeding its long-term average by two standard deviations, a level previously seen only at the peaks of the 2000 internet bubble and the end of 2021, both of which were followed by over 40% market corrections [2]. - The CAPE Ratio is hovering around 35, also above its historical average by two standard deviations, a level reached only in 1929 and 2000, both of which ended in market crashes [4]. - The Price-to-Sales Ratio has deviated from its trend line by over three standard deviations, reaching a historical extreme, with similar high levels in 2000 and 2021 leading to significant valuation corrections [6]. - The Mean Reversion Model indicates that the S&P 500 index is currently more than three standard deviations above its inflation-adjusted trend line, a level last seen at the end of 2021, which preceded a 25% market decline in 2022 [8]. Interest Rates and Macroeconomic Headwinds - Even models that are typically lenient towards the stock market in high interest rate environments are signaling overvaluation, as the 10-year U.S. Treasury yield exceeds 4%, indicating that stocks are not providing sufficient attractiveness compared to bonds [9]. - The macroeconomic environment is deteriorating, with the latest Producer Price Index (PPI) report showing inflation pressures stronger than expected, limiting the Federal Reserve's ability to cut interest rates in the short term [9]. - Persistently positive real interest rates are quietly dragging down economic growth, which will eventually impact corporate earnings. If earnings expectations begin to decline due to high rates and rising costs, the already elevated valuations will become increasingly unsustainable [9].

Core Viewpoint - Citigroup analysts have exited their long position on EUR/USD at a stop-loss of 1.1540, resulting in a loss of 1.3% including interest, attributing the recent pullback to position squeeze following the EU trade agreement announcement [1] Group 1 - Analysts Daniel Tobon, Osamu Takashima, and Brian Levine established the position at 1.1680 on July 11, with a target price of 1.20 [1] - The analysts believe that if the US dollar continues to weaken in Q3, it is more likely to be driven by soft labor market data from the US [1] - Despite the forced exit from the position, the analysts are looking to rebuild their short position on the dollar before the US employment data is released on Friday, potentially against the euro or Swiss franc [1]

Core Viewpoint - The recent policy measures from the National Healthcare Security Administration and the National Health Commission are seen as long-term benefits for the innovative drug sector, although there may be short-term profit-taking effects following the initial market reactions to the policy [3][4]. Group 1: Policy Measures - The policy includes 16 measures across five areas to support the development of innovative drugs, such as enhancing R&D support and integrating innovative drugs into insurance coverage [3]. - Key points include using healthcare data to improve R&D efficiency, establishing a commercial insurance directory for innovative drugs, and exploring temporary inclusion of essential innovative drugs in insurance coverage during public health emergencies [3]. Group 2: Market Performance - The Hong Kong innovative drug index saw a significant increase of 54.78% in the first half of the year, leading to concerns about the sustainability of this growth [4]. - Following the policy announcement, many innovative drug stocks experienced gains exceeding 10%, but subsequent profit-taking led to a market correction [3][4]. Group 3: ETF Overview - There are 20 ETFs tracking indices related to innovative drugs, with the largest being the GF Fund's Hong Kong Innovative Drug ETF, which has a scale of 138.51 billion [5][7]. - The management fees for the innovative drug ETFs vary, with the lowest being 0.15% for certain funds [5][7]. Group 4: Future Outlook - The innovative drug industry is expected to transition from capital-driven growth to profit-driven growth by 2025, presenting opportunities for both performance and valuation recovery [5][8].

Market Overview - The A-share market experienced a volatile adjustment this week, with major indices recording negative returns, indicating a "strong large, weak small" pattern[11] - The North Star 50 index saw a significant drop of 3.68% after reaching a historical high earlier in the week, confirming the anticipated "active adjustment" phase[58] Sector Performance - The dividend style sectors outperformed overall, with the healthcare and automotive industries rising by 1.92% and 1.80% respectively, while technology and growth sectors continued to weaken, with declines of 3.00% in computing and 2.10% in electronics[12][59] - Among the 30 sectors, 9 increased and 21 decreased, highlighting the dominance of dividend styles[12] Market Sentiment and Capital Flow - The average daily trading volume in the Shanghai and Shenzhen markets decreased to 1.14 trillion yuan, down from 1.23 trillion yuan the previous week[19] - Financing buy-in ratio fell to 8.22%, with a net outflow of 11.3 billion yuan from stock ETFs this week[27] Economic Influences - The Loan Prime Rate (LPR) was lowered by 10 basis points, with the one-year LPR now at 3.00% and the five-year LPR at 3.50%, aimed at reducing loan costs and stimulating economic growth[54] - The U.S. 20-year Treasury yield exceeded 5%, impacting market risk appetite negatively[56] Future Outlook - The market is expected to continue its adjustment phase, with the Shanghai Composite Index's gap from April 10 (3186-3201 points) serving as a key technical support level[60] - Investment strategy suggests reallocating from high-rebound technology and growth sectors to relatively stable large financial and dividend sectors to manage portfolio volatility[61]