Core Viewpoint - The article highlights the strengthening performance of the US economy, driven by robust private consumption and investment, alongside a significant trade surplus supported by exports [2][3]. Economic Performance - The US GDP annualized growth rate for Q3 is projected to reach 3.5%, with private consumption growing at 2.3% and private investment (excluding inventory) at 2.6%. Exports are expected to surge by 8.0% [2]. - Consumption of goods and services is expanding steadily, with goods consumption at 3.3% and services at 1.8%. Investment in technology-driven intellectual property and equipment is notably high, at 5.5% and 11.7% respectively, while real estate and construction investments are declining [2]. Employment and Fiscal Policy - The employment situation is stabilizing, with initial jobless claims decreasing to 229,000, remaining below seasonal levels. Continuing claims are stable within a range of 1.93 to 1.98 million [2]. - Fiscal policy remains accommodative, with an average deficit of $58.7 billion over recent weeks, similar to the previous year's levels. The "Big and Beautiful Act" is expected to show expansionary effects in Q4, indicating a shift to an expansionary fiscal period [2]. Monetary Policy - The monetary policy is shifting towards a more accommodative stance, contributing to lower financing costs. Corporate bond yields have decreased, with 3-year yields at 3.90%, 5-year at 4.02%, and 10-year at 4.47%. The 30-year mortgage rate has also dropped to 6.54% [3]. - The expectation is that interest rate cuts will occur around 3.5%, which is higher than market expectations, with a potential shift to a stable policy by early next year [3]. Market Reactions - The market is influenced by expectations of interest rate cuts, with US Treasury yields declining and the dollar fluctuating at lower levels. The Chinese yuan has appreciated significantly, and gold prices have rebounded [5]. - The US stock market has seen slight increases, with strong corporate earnings supporting valuations despite high current levels. Future upward movement is anticipated to be driven more by earnings growth than by valuation increases [5][6]. Chinese Economic Outlook - China's external demand remains resilient, with container throughput and cargo volume showing year-on-year growth. However, internal demand is mixed, with strong automotive retail sales contrasted by a sluggish real estate market [9]. - Manufacturing PMI has slightly improved but remains in contraction territory, indicating ongoing economic challenges. The real estate market continues to face downward pressure, while automotive sales show robust growth [9][10]. Fiscal and Policy Measures - Fiscal conditions are improving, but challenges remain due to slowing economic growth. Government bond issuance is expected to be lower than last year, but increased fiscal deposits may support future spending [11]. - Policies aimed at reducing irrational competition are being implemented, although challenges in enforcement and compliance persist [12]. Investment Strategy - The domestic market sentiment remains high, with a recommendation to maintain a balanced allocation between dividend stocks for stability and growth stocks for aggressive positioning [15]. - The A-share market is expected to continue its upward trend, supported by favorable liquidity conditions and strong corporate earnings, despite potential regulatory scrutiny [14].