Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - This week, the market showed a mild contraction in trading volume, with concentrated hotspots and weak performance of individual stocks. The press conference on the development of the financial industry during the "14th Five - Year Plan" reflected a prudent policy attitude, and there was some front - running trading for the "14th Five - Year Plan". The steel industry's growth target was set, and the A - share steel sector rebounded. Overseas, the US GDP growth in Q2 was revised up, which might affect the Fed's attitude towards monetary policy. Trading volume was concentrated in the technology sector, causing a siphon effect on the whole market. The Kechuang 50 index led the market with a nearly 6.5% increase, while other sectors and stocks declined severely. The weekly gains of the Shanghai 50, CSI 300, and CSI 500 were around 1%, and the CSI 1000 and 2000 recorded 0.5% and 1.8% declines respectively. The basis of each variety fluctuated little this week, with IH maintaining an annualized premium of 2% and the annualized discounts of the other three varieties narrowing slightly compared to last week. The term structure became flatter, and long - term hedging could be maintained [2] - The model predicts that the basis of IH, IF, IC, and IM will move in the directions of weakening, strengthening, strengthening, and strengthening respectively next week [4] Group 3: Summary According to the Directory This Week's Market Review - The market had a mild contraction in trading volume, with concentrated hotspots and weak individual stock performance. Relevant press conferences reflected a prudent policy attitude, and there was front - running trading for the "14th Five - Year Plan". The steel industry's growth target was set, and the A - share steel sector rebounded. Overseas, the US economic data might affect the Fed's monetary policy. Trading volume was concentrated in the technology sector, causing a siphon effect on the whole market. Different stock indices had different performance this week, and the basis of each variety had small fluctuations [2] Forecast Conclusion - The model predicts that the basis of IH will weaken next week, while the basis of IF, IC, and IM will strengthen [4]

Group 1 - The final revision of the U.S. GDP growth rate for the second quarter of 2025 has been adjusted to 3.8%, an increase of 0.5 percentage points from previous estimates, exceeding market expectations [1] - The second quarter's economic growth reversed a contraction of 0.6% in the first quarter, indicating a recovery in the U.S. economy [1] - Personal consumption expenditures, which account for about 70% of the U.S. economy, grew by 2.5%, while non-residential fixed investment increased by 7.3% [1] Group 2 - Net exports contributed 4.83 percentage points to the economic growth, while private inventory investment detracted 3.44 percentage points [1] - The significant decline in imports by 29.3% and the increase in personal consumption expenditures were the main drivers of the second quarter's economic growth [1] - Economists view the better-than-expected growth in personal consumption expenditures as a positive sign for the resilience of the U.S. economy, although a slowdown to around 1.5% is anticipated for the third quarter due to factors like a weak job market and rising inflation [2]

Core Points - The Federal Reserve has decided to lower the federal funds rate target range by 25 basis points to 4.00%-4.25%, marking the first rate cut since December 2024 [1] - Despite rising inflation rates, the Fed's decision was influenced by lower-than-expected job growth in recent months and a slowdown in economic activity [1] - The Fed predicts an additional 50 basis points cut by the end of the year and 25 basis points cuts annually for the next two years [1] - The Fed will continue to reduce its holdings of U.S. Treasuries, agency bonds, and agency mortgage-backed securities while maintaining the current pace of balance sheet reduction [1] - The Fed's decision led to a 0.13% decline in the U.S. dollar index, bringing it to 96.48 [1] Economic Outlook - The Fed forecasts a GDP growth rate of 1.6% for 2025, an increase from the previous estimate of 1.4% in June, with a long-term growth rate projected at 1.8% [1] Diverging Opinions - Newly appointed Fed Governor Stephen Milan was the only dissenting voice, advocating for a 50 basis points cut instead of 25 [1]

Market Movements - As of August 5, U.S. stock index futures showed mixed results, with Dow futures down 0.01%, S&P 500 futures up 0.19%, and Nasdaq futures up 0.29% [1] - European indices also saw positive movements, with Germany's DAX up 0.77%, UK's FTSE 100 up 0.54%, France's CAC 40 up 0.21%, and the Euro Stoxx 50 up 0.34% [2][3] - WTI crude oil fell by 0.89% to $65.70 per barrel, while Brent crude oil decreased by 0.76% to $68.24 per barrel [3][4] Market News - MUFG reported that the U.S. non-farm payrolls for July were significantly below expectations, leading to increased bets on interest rate cuts by the Federal Reserve, with a 90% probability for a rate cut in September [4][5] - San Francisco Fed President Mary Daly indicated support for potential rate cuts, suggesting that the Fed may need to cut rates more than twice this year [5] - Wall Street analysts warned of a possible market correction due to high stock valuations and deteriorating economic data, with predictions of a 10% to 15% correction [6] - Jefferies noted that a shift in market dynamics could favor small-cap stocks over large-cap tech stocks during the Fed's rate-cutting cycle [7] Company-Specific News - Palantir reported a quarterly revenue exceeding $1 billion for the first time, with a 48% year-over-year growth, driven by strong government and commercial orders [9] - Pfizer's Q2 revenue grew by 10% to $14.65 billion, exceeding expectations, and the company raised its full-year profit guidance [10] - BP's Q2 profit surpassed expectations at $2.35 billion, and the company announced a dividend increase and a comprehensive business review under new leadership [11] - Yum China reported a 14% increase in operating profit, reaching $304 million, with a net addition of 336 stores in Q2 [12] - Diageo's FY2025 sales slightly declined but showed better-than-expected organic sales growth of 1.7%, while the company plans to further cut costs [13] Economic Data and Events - The U.S. ISM Non-Manufacturing PMI for July is scheduled for release at 22:00 Beijing time [14]

Core Insights - Morgan Stanley has revised its economic forecasts, now expecting US GDP growth of 1.3% in 2025, a downward adjustment of 0.2% from previous estimates [1] - The forecast for PCE inflation has been increased to 2.7%, up by 0.2% from earlier predictions [1] - Core PCE inflation expectations have also been raised to 3.1%, reflecting an increase of 0.3% from prior forecasts [1] Economic Indicators - US GDP growth forecast for 2025: 1.3% [1] - PCE inflation forecast: 2.7% [1] - Core PCE inflation forecast: 3.1% [1]

Group 1: Legislative Developments - The "Great American Beauty Act" has entered the Senate discussion phase, with a potential passing date before July 31, 2025[2] - The Senate passed a motion to proceed with the act by a vote of 51-49 on June 29, 2025[2] - If the Senate passes amendments, the act will return to the House for further consideration[2] Group 2: Economic Indicators - The 10-year U.S. Treasury yield decreased by 9.83 basis points to 4.277% during the week of June 23-27, 2025[3] - The S&P 500 and Nasdaq indices rose by 3.44% and 4.25%, respectively, reflecting positive market sentiment[3] - The U.S. GDP growth forecast for Q2 2025 has been revised upward to 2.9% according to the Atlanta Fed GDPNow model[3] Group 3: Inflation and Monetary Policy - Analysts expect the Federal Reserve to initiate its first rate cut in Q3 2025, with a total of two cuts anticipated for the year[3] - The consumer price index (CPI) growth rate is projected to be 2.5% for Q2 2025, with slight adjustments for subsequent quarters[3] - The probability of a recession in the next year has been slightly reduced to 35% from a previous estimate of 40%[3] Group 4: Fiscal Concerns - The Congressional Budget Office estimates that the Senate version of the "Great American Beauty Act" could increase the deficit by $3.5 trillion over the next decade[4] - The act's provisions may raise the public debt ratio from 124% to between 125% and 128% over the next ten years[4]

Core Insights - The U.S. Treasury Secretary, Janet Yellen, anticipates that AI spending will accelerate U.S. GDP growth in the next 12 to 24 months [1] Group 1 - AI investments are expected to significantly impact economic performance in the near term [1]

Core Viewpoint - The U.S. GDP growth rate for the first quarter has been revised to -0.2%, up from an initial estimate of -0.3%, indicating a contraction in the economy for the first time since 2022 due to weak consumer spending and higher-than-expected import growth [1] Economic Indicators - The final GDP data is expected to be released next month, with the initial report indicating a contraction [1] - Consumer spending, a key driver of economic growth, increased by 1.2%, revised down from an initial estimate of 1.8% [1]

Core Viewpoint - Goldman Sachs significantly revised down the U.S. Q1 GDP growth forecast to -0.8% due to an unexpected widening of the trade deficit in March [1] Group 1: Trade Deficit and Economic Indicators - In March, the U.S. trade deficit expanded more than expected, driven by an increase in consumer goods imports, likely reflecting a "front-running" of imports before tariff hikes [1] - Both imports and exports saw growth in March, but the increase in imports was notably strong while export growth was only moderately stronger [1] - The accumulation of inventory has accelerated, contributing to the downward revision of GDP forecasts [1] Group 2: GDP Forecast Adjustment - The GDP tracking forecast for Q1 was adjusted down by 0.6 percentage points to -0.8% on a quarter-over-quarter annualized basis [1] - The U.S. GDP data is scheduled to be released on the evening of April 30 [1]