Core Viewpoint - Despite strong corporate earnings, current valuation levels are concerning, particularly for technology stocks, with expectations of a potential market correction of 10% to 20% in the next 12 to 24 months, viewed as a healthy adjustment rather than a crisis [1][3][7] Valuation Concerns - Goldman Sachs and Morgan Stanley executives express worries about high valuation levels in the U.S. stock market, indicating that most investors perceive valuations to be between reasonable and full, with few considering stocks to be cheap [3][6] - Solomon from Goldman Sachs notes that technology stock valuations are particularly full, although this does not apply to the entire market [5][6] Market Correction as a Healthy Adjustment - Wall Street executives unanimously agree that market corrections should be seen as normal and healthy developments rather than signals of a crisis, with Solomon emphasizing that 10% to 15% corrections often occur even in positive market cycles [7][9] - Pick from Morgan Stanley encourages investors to welcome the possibility of cyclical corrections, stating that such adjustments are not driven by macroeconomic cliff effects [9] Positive Outlook for Asian Markets - Both Goldman Sachs and Morgan Stanley maintain an optimistic outlook for Asian markets, particularly China, Japan, and India, citing unique growth narratives in these regions [4][10] - Goldman Sachs expects continued interest in China from global capital allocators due to recent positive developments, while Morgan Stanley highlights investment opportunities in China's AI, electric vehicles, and biotechnology sectors, as well as Japan's corporate governance reforms and India's infrastructure development [11][12]

Core Viewpoint - Wall Street executives warn that despite strong corporate earnings, current valuation levels are concerning, with potential for a market correction of over 10% in the next 12 to 24 months [1] Valuation Concerns - Goldman Sachs CEO David Solomon noted that "tech stock valuations are fully priced," but this does not apply to the entire market [2] - Morgan Stanley CEO Ted Pick mentioned that while the market has progressed significantly, there are risks related to "policy errors" and geopolitical uncertainties in the U.S. [2] - Capital Group's Mike Gitlin stated that most investors view market valuations as between reasonable and full, with few considering stocks to be cheap [2] Market Correction as a Healthy Adjustment - Wall Street executives agree that market corrections should be seen as normal and healthy developments rather than crisis signals [3] - Solomon emphasized that 10% to 15% corrections often occur even in positive market cycles and do not alter fundamental capital allocation judgments [3][4] - Pick stated that investors should welcome the possibility of cyclical corrections, describing them as healthy developments rather than signs of crisis [5] Positive Outlook for Asian Markets - Despite concerns over U.S. stock valuations, both Goldman Sachs and Morgan Stanley maintain an optimistic outlook for Asian markets [6] - Goldman Sachs expects continued interest in China from global capital allocators due to recent positive developments, including trade progress [6] - Morgan Stanley holds a bullish view on markets in China, Japan, and India, highlighting unique growth narratives in these regions [7] - Pick specifically pointed out investment opportunities in China's AI, electric vehicles, and biotechnology sectors, as well as Japan's corporate governance reforms and India's infrastructure development [7]

Market Overview - The U.S. stock market rebounded significantly, with the Nasdaq rising over 200 points, indicating a recovery from previous declines [1][3] - The S&P 500 companies have reported strong earnings, with 80% exceeding expectations, which is crucial for sustaining the current bull market [3] Trade Relations - President Trump announced that a meeting between the U.S. and Chinese leaders is on the agenda, alleviating some market fears regarding trade tensions [3] - However, there are concerns about potential new restrictions on software exports from the U.S., which could impact various sectors [3] Oil Market - Oil prices surged over 5% due to new sanctions imposed by the U.S. and EU on Russian oil companies and liquefied natural gas [4] - India, which previously sourced oil from Russia, is now seeking alternatives from the Middle East, contributing to rising oil prices [4] Valuation Concerns - Analysts warn that U.S. stock valuations are at their second-highest level in a century, reminiscent of the late 1990s internet bubble [5] - Some companies' stock prices are based on projected earnings as far out as 2030 or 2035, indicating a potential disconnect from fundamental values [5] Federal Reserve Outlook - There is a prevailing expectation in the market for a 25 basis point interest rate cut at the upcoming Federal Reserve meeting, despite inflation concerns [5] - The core CPI is projected to remain at 3.1%, significantly above the Fed's 2% target, yet the anticipation of a rate cut is supporting investor optimism [5]

Group 1 - The stock market has experienced significant gains this year, with the S&P 500, Nasdaq, and FTSE 100 indices showing unexpected upward trends [1] - The FTSE 100 index is on track to achieve its best annual performance since the global financial crisis, while the DAX index has also reached historical highs [1] - Many U.S. companies are expected to report third-quarter earnings this week, with current performance appearing to exceed expectations, potentially pushing the S&P 500 towards the 7000-point mark and the Nasdaq 100 towards 25000 points [1] Group 2 - The S&P 500's expected price-to-earnings ratio exceeds 25, indicating a rare level of market enthusiasm in modern history, while the Nasdaq's ratio stands at 32, suggesting the market may not be prepared for any disappointing signals [1] - The last time the Nasdaq reached such high valuation levels was during the internet bubble, highlighting the market's difficulty in accurately identifying potential winners in new technology [1] - As the market becomes captivated by the potential of artificial intelligence, unrealistic valuations are emerging, with traders aware that the market is approaching bubble territory [2]

Core Viewpoint - Concerns regarding the US-China trade war are escalating, with potential risks to the market if negotiations fail [1] Group 1: Trade War Implications - Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, indicates that no threats have been implemented yet, but risks will continue to rise if a resolution is not reached [1] - The expectation of US soybean sales to China may not materialize, which could impact agricultural sectors [1] - China's potential restrictions on rare earth supplies pose risks to US supply chains, heightening market concerns [1] Group 2: Market Conditions - The risk of escalation in the trade war is currently the primary concern for the market [1] - Due to high valuations in the US stock market and signs of overheated investor sentiment, the market's buffer against negative news has diminished [1]

Market Performance - On October 10, US stock indices collectively declined, with the S&P 500 and Nasdaq Composite experiencing their largest single-day drops since April [2] - The Dow Jones Industrial Average fell by 878.82 points, closing at 45479.60 points, a drop of 1.90%; the S&P 500 dropped 182.60 points to 6552.51 points, a decline of 2.71%; and the Nasdaq Composite fell 820.20 points to 22204.43 points, a decrease of 3.56% [2] Sector Performance - Large technology stocks saw widespread declines, with Nvidia dropping 4.89%, resulting in a market value loss of $228.7 billion (approximately 1.63 trillion RMB) [2] - The Philadelphia Semiconductor Index plummeted by 6.32%, with notable declines in Circle (over 11%), Arm (over 9%), AMD, Qualcomm, and Coinbase (over 7%) [2] - Bitcoin experienced a significant drop, falling from $122,000 to a low of $101,500, marking a maximum decline of 17% [2] Chinese Stocks - The Nasdaq Golden Dragon China Index fell by 3.32%, with NIO down over 10%, Xpeng down over 8%, and iQIYI down over 7% [3] - Other notable declines included Baidu and Tencent Music (over 6%), Li Auto and Alibaba (over 5%), and JD.com (over 3%) [3] Economic Context - The US government shutdown continues, affecting hundreds of thousands of federal employees and delaying key economic data releases, including the JOLTS report and CPI data [3] - The uncertainty surrounding government operations has heightened market fears [3] Valuation Concerns - Federal Reserve Chairman Jerome Powell has warned about the high valuations in the US stock market, with the S&P 500's expected price-to-earnings ratio near its highest level since 2021 [4] - The cyclically adjusted price-to-earnings ratio (CAPE) reached a new high since the end of 2021, indicating elevated valuations [4] - JPMorgan CEO Jamie Dimon noted a significant increase in the risk of a major market correction over the next 6 months to 2 years, citing various uncertainties including geopolitical tensions and fiscal policies [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The Fed Chair Powell warned that the US stock market was over - valued, causing global capital markets to fluctuate at high levels. The overall valuation of styrene is moderately low, with supply under pressure and demand in a seasonal peak. When the seasonal off - peak season arrives in the fourth quarter, the market price may continue to decline under the background of weak supply and demand. It is recommended to wait and see [11]. - The prices of styrene in the spot and futures markets have been continuously decreasing, with the basis weakening and the BZN spread declining. The profit of non - integrated EB plants has also decreased [11]. - The cost of styrene is affected by the price and supply of pure benzene. Last week, the price of pure benzene in East China decreased by 1.26%, and its production was fluctuating at a high level. The supply of styrene is affected by capacity utilization and production plans, with the largest production pressure expected in the fourth quarter [11]. - The demand for styrene has shown a slight improvement with the arrival of the seasonal peak. The weighted operating rate of the downstream three S products has increased, and the operating rates of PS, EPS, and ABS have all risen [11]. - The inventory of styrene has different trends. The in - plant inventory has decreased slightly, while the inventory at Jiangsu ports has increased significantly. However, the high - level inventory at ports is gradually being reduced [11]. 3. Summary by Directory 3.1 Week - on - Week Assessment and Strategy Recommendation - Policy: Fed Chair Powell warned of high US stock valuations, leading to high - level fluctuations in global capital markets [11]. - Valuation: Styrene's weekly decline was in the order of spot > cost > futures. The basis weakened, the BZN spread decreased, and the profit of non - integrated EB plants declined [11]. - Cost: Last week, the price of pure benzene in East China dropped by 1.26%, and its production was fluctuating at a high level [11]. - Supply: The capacity utilization rate of EB was 73.4%, a week - on - week decrease of 2.13% but a year - on - year increase of 4.26%. According to the production plan, the largest production pressure will be in the fourth quarter [11]. - Import and Export: In July, the domestic import volume of pure benzene was 4.412 million tons, a month - on - month decrease of 13.13% but a year - on - year increase of 8.38%. The import volume of EB in July was 269,200 tons, a month - on - month increase of 21.77% and a year - on - year increase of 29.29% [11]. - Demand: The weighted operating rate of the downstream three S products was 45.44%, a week - on - week increase of 1.03%. The operating rates of PS, EPS, and ABS all increased [11]. - Inventory: The in - plant inventory of EB was 215,600 tons, a week - on - week decrease of 0.31% but a year - on - year increase of 36.08%. The inventory at Jiangsu ports was 186,500 tons, a week - on - week increase of 17.30% and a year - on - year increase of 323.86%. The high - level port inventory is being reduced [11]. - Forecast: The reference range for pure benzene (BZ2603) is 5,800 - 6,100 yuan/ton, and for styrene (EB2511) is 6,800 - 7,100 yuan/ton [11]. - Strategy: It is recommended to wait and see [11]. 3.2 Spot and Futures Market - The prices of styrene in the spot and futures markets have been continuously decreasing, and multiple charts show the trends of styrene's spot price, futures price, basis, trading volume, and other indicators over the years [14][18][20]. 3.3 Profit and Inventory - The profit of styrene has slightly rebounded. Charts show the profit trends of different production processes such as ethylbenzene dehydrogenation and POSM [42]. - There are various inventory trends. Charts show the inventory trends of styrene in East China ports, factories, and other aspects over the years [36]. 3.4 Cost Side - The profit of naphtha has rebounded significantly. The profit chart of the naphtha - crude oil - pure benzene - styrene - PS industrial chain shows the profit trends of each link [54][56]. - Pure benzene will continue to see inventory reduction in 2025, especially with a large supply gap in the third quarter. There are detailed production and investment plans for pure benzene and its downstream products, as well as comparisons of production and demand in different quarters [58][59]. - The price difference between China and South Korea for pure benzene has decreased. Multiple charts show the price differences, import profits, production rates, and other indicators of pure benzene [65]. - The downstream demand and production of pure benzene have shown a downward trend in an oscillatory manner. Charts show the production profits and operating rates of downstream products such as phenol, aniline, and caprolactam [86]. - The in - plant inventory of caprolactam has been fluctuating at a high level. Charts show the inventory trends of caprolactam and other downstream products [93]. 3.5 Supply Side - In 2025, styrene will face a shortage starting from the third quarter, but the gap may gradually narrow. There are detailed production and investment plans for styrene and its downstream products, as well as comparisons of production and demand in different quarters [103][106]. - There are many planned maintenance activities in September, and the production of styrene has declined from the same - period high. Charts show the daily production, export volume, operating rate, and other indicators of styrene [115]. 3.6 Demand Side - The production capacity of the downstream 3S products of styrene has been forecasted. Charts show the production capacity, output, and growth rates of PS, EPS, and ABS [126][127]. - The operating rates of EPS and PS have seasonally improved. Charts show the operating rates and production profits of EPS and PS [131][135]. - The operating rate of ABS has rebounded from a low level. Charts show the profit and operating rate of ABS [139][140]. - The production of washing machines has a moderately high year - on - year growth rate. Charts show the sales volume, production volume, inventory, and year - on - year growth rate of washing machines [160][161]. - The production of air - conditioners also has relevant data and trends. Charts show the sales volume, production plan, inventory, and year - on - year growth rate of air - conditioners [163][165].