Economic Overview - The current economic situation in the U.S. is perceived as not stable, with visible risks present [5][45] - The government spending is a long-term concern but provides short-term support [8] - The housing market is struggling due to high mortgage rates and prices, leading to a negative outlook for the real estate sector [7] Leading Indicators - Among the three debt sectors in the U.S., only government debt shows stable and high growth, indicating a persistent crisis-level deficit [3] - The economic sentiment is likened to a long-term hospital patient, suggesting that while some risks may have decreased, overall health remains questionable [4] Synchronization Indicators - GDP growth is expected to slow down, with projections of 2.5% for 2024, while this year may see around 1.5% [14][16] - Employment data shows a divergence across sectors, with cyclical industries facing significant challenges compared to non-cyclical ones [19][21] Lagging Indicators - The unemployment rate is rising but remains low, indicating a fragile job market where layoffs are minimal [18] - Inflation in durable and non-durable goods has not decreased, suggesting persistent pricing pressures despite economic challenges [22][24] Federal Reserve's Position - The Federal Reserve's decision-making is influenced by the balance between inflation and unemployment risks, with a focus on maintaining a neutral interest rate [31][36] - The Fed's current stance is to lower rates in response to rising unemployment risks, while still being cautious about inflation [36][46] Conclusion - The U.S. economy is showing signs of significant weakening, with the Federal Reserve likely to continue lowering rates if economic conditions deteriorate further [45][46] - The critical question remains whether the Fed will act to lower rates if inflation rises alongside a weakening economy, indicating a complex decision-making environment [46][47]

Core Viewpoint - Japan's May coincident index final value is reported at 116, showing an increase from the previous value of 115.9 [1] Group 1 - The coincident index reflects the current economic activity in Japan, indicating a slight improvement in economic conditions [1] - The increase from 115.9 to 116 suggests a positive trend in Japan's economic performance [1] - This data point may influence investor sentiment and economic forecasts for Japan [1]

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]

Group 1 - The preliminary value of Japan's May coincident index is reported at 115.9, matching expectations and showing a slight decrease from the previous value of 116 [1]

Core Viewpoint - Japan's April coincident index final value is reported at 116, an increase from the previous value of 115.5, indicating a positive trend in economic activity [1] Economic Indicators - The coincident index for April shows a final value of 116, reflecting an upward movement compared to the prior value of 115.5, suggesting improved economic conditions [1]

Group 1 - The preliminary value of Japan's April coincident index is 115.5, slightly above the expected value of 115.4 but lower than the previous value of 115.9 [1]

Group 1 - The final value of Japan's March coincident index is reported at 115.9, slightly lower than the preliminary value of 116 [1]

Group 1 - The preliminary value of Japan's March coincident index is 116, which is higher than the expected value of 115.9 but lower than the previous value of 117.3 [1]

Group 1 - The final value of Japan's February coincident index is 117.3, an increase from the previous value of 116.9 [1]