Core Viewpoint - The Federal Reserve announced a 25 basis point interest rate cut, marking the first reduction since December 2024 and the first under the new monetary policy framework introduced in August 2024 [1] Group 1: Market Reaction - Following the announcement, the S&P 500 index initially rose by 0.5%, indicating a positive market sentiment [3] - However, after Fed Chair Jerome Powell's press conference, where he described the cut as a "risk management" move due to concerns over the labor market, the market experienced a decline, with a maximum drop of 0.8% [3] - Powell's comments about the potential for further actions led to a brief market rebound, but the overall closing was slightly down [5] Group 2: Changes in Monetary Policy Approach - The recent interest rate cut differs significantly from the one in September 2024, where Powell referred to it as a "recalibration" with a clear plan for economic soft landing [8] - In contrast, the current approach is more reactive, with Powell stating that future decisions will be made on a meeting-by-meeting basis, indicating a lack of a predetermined path [8] - The shift in strategy is attributed to the complexities introduced by Trump's tariff policies, which have created a unique economic environment characterized by "policy-induced price increases" [10] Group 3: New Framework Implications - The Federal Reserve's new "flexible inflation targeting" framework requires attention to both employment and inflation, contrasting with the previous focus solely on employment [12] - This change necessitates a more cautious approach to rate cuts, as the Fed must balance the risks of overheating the labor market while addressing inflation concerns [12] Group 4: Future Outlook - There are strong expectations for another rate cut in October, influenced by the current economic conditions and the Fed's recent actions [14] - The recent cut is viewed as a temporary measure rather than a long-term solution, with caution advised for investors due to high market valuations and ongoing inflation uncertainties [16]

Group 1: Current Economic Situation - The U.S. economy has shown resilience amid significant macro policy changes, with the labor market nearing full employment and inflation rates having significantly decreased from post-pandemic peaks [1] - The Federal Reserve's dual mandate is being challenged by rising inflation and employment risks, with the federal funds rate maintained between 5.25% and 5.5% for over a year [2][3] - The GDP growth rate has slowed to 1.2% in the first half of the year, reflecting a decrease in consumer spending and potential long-term impacts on economic growth and productivity due to changes in tax, spending, and regulatory policies [3][4] Group 2: Labor Market Dynamics - Recent employment reports indicate a slowdown in job growth, with an average of 35,000 non-farm jobs added monthly over the past three months, significantly lower than the 168,000 jobs added in 2024 [3] - The unemployment rate has slightly increased to 4.2%, but remains stable, indicating a balance in the labor market despite a decrease in labor supply due to immigration policy changes [3][4] - The labor market appears to be in a precarious balance, with both supply and demand declining, raising concerns about potential job losses and increased unemployment if downward risks materialize [3] Group 3: Inflation and Price Pressures - Tariff policy adjustments have led to price increases for certain goods, with overall personal consumption expenditures (PCE) rising by 2.6% and core PCE by 2.9% over the past year [4] - The impact of tariff adjustments on prices is expected to accumulate in the coming months, raising concerns about the potential for sustained inflation [4][5] - The Federal Reserve is cautious about the possibility of a wage-price spiral, although current labor market conditions do not suggest immediate risks of significant wage increases [4][5] Group 4: Monetary Policy Framework - The revised monetary policy framework aims to adapt to complex economic environments while maintaining the dual mandate of achieving full employment and price stability [7][11] - The Federal Reserve has shifted from an "average inflation targeting" approach back to a "flexible inflation targeting" strategy, emphasizing the importance of stable inflation expectations [12][15] - The revised framework reflects lessons learned from recent economic conditions, including the need for proactive measures when employment and inflation targets conflict [13][14]

Group 1: U.S. Economic Indicators - U.S. manufacturing PMI rose from 49.8 to 53.3, exceeding market expectations of 49.7[8] - New home starts increased by 10.6 percentage points to 12.9%, the highest since December 2023[10] - Existing home sales annualized at 4.01 million units, above the expected 3.92 million[10] Group 2: Market Reactions - U.S. stock indices showed mixed performance, with the S&P 500 up 0.3% and the Nikkei 225 down 1.7%[3] - The 10-year U.S. Treasury yield fell by 7 basis points to 4.26%[3] - The U.S. dollar index decreased by 0.12% to 97.72[3] Group 3: Federal Reserve Policy Outlook - Powell signaled a dovish shift at the Jackson Hole meeting, indicating potential rate cuts in September[1] - The Fed may implement a maximum of two rate cuts within the year due to inflation concerns[1] - The ECB is expected to remain on hold in September, as inflation is no longer a primary focus[1]

Core Viewpoint - The Federal Reserve is expected to initiate interest rate cuts in September, as indicated by Chairman Powell's remarks at the Jackson Hole Global Central Bank Conference, which has led to a positive reaction in global capital markets [1][3]. Group 1: Monetary Policy Framework Changes - The Federal Reserve is undergoing a fundamental adjustment in its monetary policy framework, shifting from an "average inflation targeting" approach to a "flexible inflation targeting" system, which is expected to have significant implications for policy direction beyond September [3][5]. - The "average inflation targeting" framework considers the average inflation over a period, which could limit the space for rate cuts if past high inflation rates are included in calculations. In contrast, the "flexible inflation targeting" focuses on current inflation levels, allowing for rate cuts if present inflation shows significant decline [5][9]. Group 2: Inflation and Interest Rate Dynamics - Current inflation rates have decreased from a peak of 9% to around 3%, suggesting that the existing federal funds rate of 4.25-4.5% may have room for adjustment to better align with current inflation levels [7][9]. - The potential for a significant drop in inflation in 2026 due to high base effects could provide further justification for rate cuts, as the annual inflation rate may approach the 2% target with the new framework's focus on current data [9][11]. Group 3: Future Implications - The adjustment in the monetary policy framework is seen as paving the way for future easing measures, with the current environment being favorable for rate cuts, supported by both the new framework and anticipated improvements in inflation data [11].

Economic Outlook - Powell's speech at Jackson Hole indicates a dovish stance, suggesting a potential interest rate cut in September[3] - Job growth has slowed to an average of only 35,000 per month over the past three months, significantly below the 168,000 per month expected for 2024, indicating weakening labor market resilience[3] - The unemployment rate has risen to 4.2%, reflecting a balance in the labor market but with increasing downside risks to employment[3] Inflation and Tariff Impact - The PCE inflation rate is at 2.6% year-on-year, with core PCE at 2.9%, indicating inflation pressures but Powell views tariff impacts as a temporary shock[4] - Powell believes the likelihood of a wage-price spiral is low due to a weak labor market, which mitigates concerns about sustained inflation[4] Policy Implications - The focus on employment risks outweighs concerns about inflation, opening the door for potential rate cuts[5] - The Federal Reserve's internal division on rate cuts has increased, with some members supporting a dovish approach, enhancing the likelihood of a September rate cut[5] Economic Risks - The probability of recession in the next 12 months has risen to over 60%, reflecting market concerns about economic hard landing risks[6] - Recent employment data shows only 73,000 new jobs added in July, far below the expected 104,000, indicating a downward trend in labor market strength[8] Long-term Policy Framework - The revision of the Federal Reserve's long-term goals emphasizes a flexible inflation targeting approach, moving away from the average inflation targeting strategy[18] - The updated framework allows for a balanced approach when employment and inflation targets conflict, providing the Fed with greater operational flexibility[21]

Group 1: US Market Focus - The Federal Reserve is expected to cut interest rates three times this year, with each cut being 25 basis points, as indicated by Powell's comments at the Jackson Hole summit [10][15][16] - The "rate cut trade" has been reestablished, with a focus on stocks like Mobileye and Klaviyo, as well as the Invesco S&P 500 Equal Weight Real Estate ETF [10][17][22][23] - Mobileye is positioned for growth in the advanced driver-assistance systems (ADAS) market, with significant orders expected for its L2+/L3/L4 products by 2024 and partnerships with major automotive companies [22] - Klaviyo, a leading digital marketing platform, is projected to capture a growing market share, with a focus on cross-selling new products and expanding into adjacent markets [22] Group 2: European Market Focus - The path to peace between Russia and Ukraine remains challenging, with significant obstacles in territorial conditions and security assurances [30][34] - European defense spending is expected to increase significantly, with NATO members committing to raise defense budgets to 5% of GDP, benefiting companies like Rheinmetall and Rolls-Royce [35][39] - Rheinmetall is well-positioned to benefit from increased defense spending, with projected annual revenue growth of 20% through 2030 due to rising demand for military equipment [39] - Rolls-Royce is experiencing growth in its civil aviation business, supported by strong demand across all end markets, while also benefiting from increased defense spending [39] Group 3: Philippine Market Focus - The Philippine economy showed stronger-than-expected GDP growth in Q2 2025, driven by improved employment and loose monetary policy, with further interest rate cuts anticipated [49][52] - The Philippine stock market is seen as attractive due to low valuations, with the MSCI Philippines Index trading at approximately 11 times earnings, and is expected to benefit from regional capital inflows [52] - Key sectors to watch include banking, utilities, and real estate, with specific companies like BPI, BDO Unibank, Converge, and Ayala Land highlighted for their potential [52][53]

Market Performance - The Hong Kong stock market indices showed strong performance, with the Hang Seng Index rising by 1.94% to 25,829.91 points, the Tech Index increasing by 3.14% to 5,825.09 points, and the National Enterprises Index up by 1.85% to 9,248 points [2] - The Tech Index reached an intraday high of 5,847.95 points, marking the highest level since March 21 [4] Tech Sector Insights - Zheshang Securities noted that the Hang Seng Tech Index had lagged in the current market rally, impacted by the "takeout war" affecting profit expectations and the ongoing weakness of the Hong Kong dollar leading to liquidity tightening by the Hong Kong Monetary Authority [6] - The liquidity in Hong Kong's banking system has returned to normal levels, with limited room for further tightening, and the Hong Kong dollar has appreciated significantly [6] - The dovish signals from Federal Reserve Chairman Jerome Powell at the Jackson Hole meeting may enhance liquidity expectations for Hong Kong stocks, suggesting potential for a rebound in the Hang Seng Tech Index [6] Gold and Precious Metals - Gold stocks surged following the dovish comments from the Federal Reserve, with Zijin Mining rising by 6.28%, Lingbao Gold by 5.21%, and China Gold International by 4.95% [8] - Market expectations for a September rate cut increased from 75% to 90% after Powell's remarks, which are expected to support gold prices [9] Automotive Sector - NIO led the automotive sector with a significant increase of 15.17%, following the launch of its new ES8 model, which has a starting price of 416,800 yuan [11][12] - Other automotive stocks such as Brilliance China and GAC Group also saw notable gains of 10.34% and 8.45%, respectively [11] Renewable Energy Sector - The photovoltaic sector experienced gains, with GCL-Poly Energy rising by 14.29% after the China Photovoltaic Industry Association called for an end to cut-throat competition [13][14] Real Estate Sector - Real estate stocks gained traction following policy easing measures in Shanghai, with Vanke rising by 9.86%, Oceanwide Holdings by 6.78%, and Sunac China by 6.58% [15][16] Individual Stock Movements - Dongfeng Group saw a dramatic increase of 54.10% due to its announcement of privatization and delisting plans [17] - Kingstone Mining rose by 14.34% following new regulations on rare earth mining and processing [18]

Core Viewpoint - The recent dovish signals from Federal Reserve Chairman Jerome Powell at the Jackson Hole conference have increased market expectations for a 25 basis point rate cut in September, which is likely to support gold prices and initiate a new upward trend in the gold market [4]. Group 1: Gold ETF Fund Performance - As of August 25, 2025, the Gold ETF Fund (159937) has risen by 0.60%, with a latest price of 7.41 yuan, and a cumulative increase of 12.03% over the past six months as of August 22 [3]. - The Gold ETF Fund has seen a turnover rate of 1.04% and a trading volume of 298 million yuan, with an average daily trading volume of 626 million yuan over the past month, ranking it among the top two comparable funds [3]. - The fund has experienced continuous net inflows over the past three days, with a maximum single-day net inflow of 99.54 million yuan, totaling 122 million yuan, and an average daily net inflow of 40.53 million yuan [5]. Group 2: Market Influences and Expectations - Powell's dovish stance has shifted market expectations for a September rate cut to 91.1%, alleviating previous concerns about the independence of Federal Reserve policy and the uncertainty of the rate cut path, which is expected to lead to a breakout in gold prices [4]. - The price of gold is anticipated to rise in conjunction with copper prices, supported by rate cut expectations and seasonal demand, indicating a potential upward trend for both commodities [4]. Group 3: Fund Metrics and Historical Performance - The Gold ETF Fund has achieved an 80.81% net asset value increase over the past five years, ranking it among the top two comparable funds, with a historical annual return of 80.00% and a 100% probability of profit over a three-year holding period [6]. - The fund's maximum monthly return since inception is 10.62%, with the longest consecutive monthly gain being six months and a maximum gain of 16.53% [6]. - As of August 22, 2025, the fund's Sharpe ratio over the past year is 2.32, indicating strong risk-adjusted returns [6].

Core Viewpoint - The Federal Reserve is gradually opening the door to interest rate cuts, with a new monetary policy framework that emphasizes flexible inflation targeting and acknowledges the challenges in measuring full employment [2][4]. Group 1: Federal Reserve's New Framework - The new framework indicates a shift away from fixed employment targets, recognizing that full employment is not directly measurable and varies over time [2]. - The Federal Reserve's adjustment is partly a response to recent revisions in employment data by the Bureau of Labor Statistics, which has raised questions about the credibility of employment statistics [2][3]. - The framework retains the complementary assumption between employment and inflation targets, allowing for some discretionary power in policy decisions [4]. Group 2: Impact of Digital Technology - Digital technology is changing the transmission mechanisms of monetary policy, complicating the speed and boundaries of policy effects [3]. - The emergence of decentralized stablecoins is altering the medium and ecosystem of currency transmission, increasing the costs for the Federal Reserve to track and analyze monetary flows [3]. Group 3: Global Market Implications - The non-typical interest rate cuts by the Federal Reserve may have different impacts on global financial markets due to the evolving global economic structure [4][5]. - The effects of rate cuts will not be uniform across global markets but will depend on the correlation of countries' economic relationships with the U.S. and their acceptance of dollar-based stablecoins [5]. - Countries need to adapt their risk management strategies in response to the changes brought about by the Federal Reserve's policy adjustments and the influence of new technologies [5].

Core Viewpoint - The Federal Reserve is opening the door to interest rate cuts as it adjusts its monetary policy framework, emphasizing the need for flexibility in achieving full employment and price stability [1][2]. Group 1: Federal Reserve's New Monetary Policy Framework - The new framework redefines the goals of full employment and price stability, indicating that fixed employment targets are unsuitable due to their variability over time [1]. - The Federal Reserve has shifted away from a "compensatory" inflation strategy, signaling that upcoming rate cuts are preventive rather than aggressive [1][3]. - The adjustment in the monetary policy framework is partly a response to recent significant revisions in employment data by the U.S. Bureau of Labor Statistics, raising concerns about the reliability of employment statistics [1][2]. Group 2: Challenges and Implications - The current environment presents uncertainties regarding the stability and predictability of decision-making, influenced by potential data distortions in employment and price indices [2]. - Digital technology is transforming the transmission mechanisms of monetary policy, complicating the Fed's ability to adapt its framework to these changes [2][3]. - The emergence of decentralized stablecoins is shifting some monetary policy functions from the Federal Reserve to the U.S. Treasury, challenging the Fed's control over macro-financial dynamics [2][3]. Group 3: Global Market Impact - The impact of the Fed's interest rate cuts on global markets will not be uniform but will depend on the economic relationships between countries and their acceptance of dollar-based stablecoins [4]. - Countries need to adjust their risk management strategies in response to the evolving global market dynamics influenced by the Fed's policy changes [4][5]. - The Fed's policy adjustments prompt other central banks to reconsider their traditional frameworks and adapt to new technological and transmission mechanisms [5].