Core Viewpoint - The article discusses the recent fluctuations in the US stock market, highlighting the impact of employment data and the anticipation of interest rate cuts by the Federal Reserve, which has led to a shift from "recession trading" to "rate cut trading" [5][6]. Group 1: Market Reactions - In early August, the S&P 500 index fell by 1.60%, while by August 4, it had risen by 1.47%, indicating a significant market reversal [6]. - The Nasdaq index experienced a drop of 2.24% on August 1, followed by a recovery of 1.95% by August 4 [6]. - The 2-year US Treasury yield decreased by 25.5 basis points initially, then only by 2.7 basis points, reflecting changing investor sentiment [6]. Group 2: Economic Context - The article explains the concepts of "rate cut trading" and "recession trading," noting that they are responses to economic data but in opposite directions [7][9]. - Rate cut trading occurs when the Federal Reserve is expected to lower interest rates, which generally supports risk assets, while recession trading happens during economic downturns, negatively impacting risk assets [10]. Group 3: Historical Rate Cut Cycles - The article reviews three historical rate cut cycles since 2000, noting that each was initiated during economic difficulties [14][16]. - The first cycle (2001-2003) saw a cumulative rate cut of 550 basis points, with the S&P 500 dropping 26.19% during the rate cut period [21][22]. - The second cycle (2007-2008) involved a 500 basis point cut, with the S&P 500 declining 38.72% during the rate cut period [26]. - The third cycle (2019-2020) was different as it began without a significant recession, but the onset of the COVID-19 pandemic led to further cuts [27][29]. Group 4: Current Economic Indicators - Recent employment data showed a significant downward revision, with July's non-farm payrolls at 73,000, well below expectations [39]. - The downward revision reflects a cooling job market, potentially influenced by tariff policies affecting hiring [40][41]. - The article suggests that the current economic environment may not indicate a severe recession, which could mitigate risks for equity assets [45][47]. Group 5: Asset Performance Expectations - The article outlines expected asset performance during the current and past rate cut cycles, noting that equities typically decline during rapid rate cuts due to underlying economic challenges [33]. - Fixed income assets like US Treasuries generally perform well during rate cuts, while gold tends to rise due to its safe-haven status [34][35]. - The current environment suggests that while equities may face some pressure, the absence of a significant global crisis could provide some support [47].

Core Viewpoint - The article discusses the potential risks and uncertainties facing the U.S. economy in the second half of 2025, particularly focusing on the impact of tariffs and the "Beautiful America Act" on economic performance and market behavior [1][2]. Group 1: Economic Outlook - The IMF has revised down the global GDP growth forecast for 2025 to 2.8%, a decrease of 0.5 percentage points from January, with the U.S. forecast lowered from 2.7% to 1.8%, a drop of 0.9 percentage points [1]. - There is a need to guard against the risk of an unexpected economic downturn, especially if the unemployment rate rises to the range of 4.4% to 4.6%, which could trigger a "recession trade" in the market [2][5]. Group 2: Tariffs and Legislative Impact - The two main themes for the second half of 2025 are the verification of tariff data and the potential impact of the "Beautiful America Act" [2]. - The introduction of Tariff 2.0 has increased uncertainty regarding trade, industrial production, and economic growth in the latter half of the year [1]. Group 3: Currency Dynamics - The article suggests that under the influence of a slowing U.S. economy and anticipated interest rate cuts by the Federal Reserve, the U.S. dollar may further depreciate, leading to a passive appreciation of the Renminbi against the dollar [8]. - If the U.S. moves towards fiscal balance following the implementation of the "Beautiful America Act," it could create additional space for interest rate cuts, potentially continuing the trend of gradual dollar depreciation [8].

Core Viewpoint - The unexpected performance of the non-farm employment data has ignited market expectations for interest rate cuts by the Federal Reserve, leading to a significant rally in the U.S. Treasury market [1][5]. Group 1: Non-Farm Employment Data - In July, the U.S. non-farm sector added only 73,000 jobs, significantly below expectations, with the unemployment rate slightly rising to 4.2% [6]. - The non-farm employment figures for May and June were drastically revised downwards, with May's jobs revised from 144,000 to just 19,000, and June's from 147,000 to 14,000 [6]. Group 2: Market Reactions - Following the release of the non-farm data, the 2-year Treasury yield fell over 25 basis points from 3.953% to 3.696%, while the 5-year yield dropped over 20 basis points from 3.967% to 3.755% [4]. - The 10-year and 30-year Treasury yields also saw declines of over 15 and 20 basis points, respectively, reflecting a broad-based drop in yields across the curve [4]. Group 3: Interest Rate Expectations - According to CME's FedWatch, the probability of the Federal Reserve maintaining rates in September is only 5.6%, while the probability of a 25 basis point cut is 94.4% [6]. - The market has priced in a high likelihood of rate cuts in September, a shift from less than 40% before the non-farm data release [7]. Group 4: Economic Outlook - Despite the weak employment data, some analysts caution that the current "recession trade" does not equate to an actual recession, as other economic indicators, such as average hourly earnings, have shown improvement [9][10]. - The overall economic slowdown, indicated by recent employment and GDP data, provides conditions for the Federal Reserve to consider rate cuts [9].

Core Viewpoint - The article discusses the implications of the recent U.S. non-farm payroll data and the Federal Reserve's decision to maintain interest rates, highlighting increasing divisions within the Fed regarding potential rate cuts and the resulting impact on global markets [2][3][7]. Economic Indicators - The Federal Open Market Committee (FOMC) decided to keep the federal funds rate at 4.25% to 4.5%, marking a period of inaction since Trump's presidency [3][6]. - The U.S. added only 73,000 jobs in July, significantly below the expected 104,000, with the unemployment rate rising to 4.2% [3][6][7]. - Revisions to previous months' non-farm payroll data showed a downward adjustment of 258,000 jobs, indicating a weakening labor market [3][6]. Market Reactions - The weak employment data triggered a "recession trade" in global equity markets, leading to declines in most equity assets and significant drops in metal commodities [3][6][7]. - The 10-year U.S. Treasury yield fell by 17 basis points to 4.23%, while the U.S. dollar index saw a slight increase, remaining below 100 [3][6][7]. Fund Flows - There was a notable outflow of capital from the Chinese stock market, with domestic investors withdrawing $3.085 billion, while foreign investors saw an inflow of $882 million [3][6]. - In the past week, global funds saw significant inflows into U.S. and European markets, while Chinese equity funds experienced substantial outflows [3][9]. Valuation Metrics - The Earnings Risk Premium (ERP) for the CSI 300 index rose to 64%, indicating a slight recovery in valuation attractiveness compared to historical levels [3][6]. - The risk-adjusted returns for the CSI 300 increased from 71% to 79%, while the S&P 500's risk-adjusted returns remained stable at 48% [3][6]. Sector Performance - In the U.S. equity market, funds flowed into financials, industrials, and infrastructure sectors, while healthcare, energy, and technology sectors saw outflows [11]. - In the Chinese market, capital flowed into financials, technology, and materials sectors, with outflows from real estate, infrastructure, and healthcare sectors [11].

Report Industry Investment Rating - No relevant content provided Core Views of the Report - Copper: With the domestic bullish sentiment cooling and the US dollar index rebounding, copper prices are under pressure. The US tariff policy excluding refined copper and the unexpected US non - farm payrolls data have mixed impacts. Continued attention is needed on whether overseas markets trade on recession. In China, it's the off - season for the industry, and inventory reduction at low levels has slowed. Short - term Shanghai copper is at the July low, and technical support at this level should be monitored [2][56] - Aluminum: The domestic bullish sentiment has cooled, and aluminum prices have declined. The unexpected US non - farm payrolls data has a relatively small impact on aluminum prices. Attention should be paid to whether overseas markets conduct recession trading. At the industrial level, it's the off - season for downstream industries, the operating rate has dropped, and electrolytic aluminum social inventory has been rising. In the short term, with macro cooling and industrial inventory accumulation, aluminum prices are weak, and attention should be paid to the July low - level technical support [3][56] Summary Based on the Table of Contents 1. Macro Factors - Overseas: The non - farm payrolls data was unexpectedly poor, leading to a significant decline in risk appetite [7] - Domestic: After the Politburo meeting, there was a strong willingness among bulls to close their positions [7] 2. Copper 2.1 Quantity - Price Trends - With the cooling of domestic bullish sentiment and the rebound of the US dollar index, copper prices have been under pressure. The US tariff policy and non - farm payrolls data have had mixed impacts on copper prices [2][56] 2.2 Copper Ore Processing Fees Maintained at a Low Level - Since January, copper ore processing fees have been continuously decreasing, reflecting both a tight copper ore supply and over - capacity in smelting. The domestic copper ore port inventory is similar to that of the same period last year, indicating an expected tight supply at the domestic mine end and that the low TC is mainly due to over - capacity in smelting [22] 2.3 Electrolytic Copper Inventory Reduction Slowed - In the domestic off - season, the reduction of electrolytic copper inventory at low levels has slowed [2][27][56] 2.4 Downstream Initial Stage - No specific analysis content provided other than the figure of copper downstream monthly capacity utilization 3. Aluminum 3.1 Quantity - Price Trends - The domestic bullish sentiment cooled, and aluminum prices declined. The impact of the unexpected US non - farm payrolls data on aluminum prices was relatively small [3][56] 3.2 Upstream Industrial Chain - No specific analysis content provided other than figures related to bauxite port inventory and alumina price 3.3 Electrolytic Aluminum Inventory Accumulation - In the off - season for downstream industries, the operating rate has dropped, and electrolytic aluminum social inventory has been rising [3][56] 3.4 Downstream Initial Stage - No specific analysis content provided other than figures related to aluminum rod capacity utilization, 6063 aluminum rod processing fees, and 6063 aluminum rod inventory 4. Conclusion - Copper: Similar to the core view, copper prices are under pressure due to various factors, and attention should be paid to overseas recession trading and low - level technical support [2][56] - Aluminum: Similar to the core view, aluminum prices are weak due to macro cooling and industrial inventory accumulation, and attention should be paid to overseas recession trading and low - level technical support [3][56]

Economic Data - The US GDP for Q2 2025 showed a seasonally adjusted annualized growth rate of +3.0%, exceeding expectations of +2.4%[17] - Personal Consumption Expenditures (PCE) increased by 0.4% month-on-month in June, with a year-on-year increase of 4.7%[19] - Non-farm payrolls added only 73,000 jobs in July, significantly below the expected 110,000, with prior months' data revised down by a total of 258,000 jobs[27] Market Trends - The S&P 500 index decreased by 2.36% to 6238.01, while the Nasdaq index fell by 2.17% to 20650.13[2] - The US 10-year Treasury yield dropped by 17 basis points to 4.23%, and the 2-year yield fell by 22 basis points to 3.69%[2] - The US dollar index rose by 1.04% to 98.6900, indicating a stronger dollar amidst economic uncertainty[2] Inflation and Employment - The unemployment rate increased to 4.25% in July, up from 4.11% in the previous month, while the U3 unemployment rate reflects a cooling labor market[29] - Core PCE inflation rose to 2.8% year-on-year, slightly above the expected 2.7%[23] - Job openings in June decreased to 7.437 million, with a vacancy rate of 4.4%, indicating a tightening labor market[25] Policy and Trade - President Trump announced a new tariff list affecting nearly 70 countries, raising concerns about potential inflationary pressures and trade negotiations with China[3] - The Federal Reserve's decision-making is complicated by the dual pressures of weakening economic data and ongoing tariff implications, with a 80% probability of a rate cut in September following the weak non-farm payroll data[11]

Market Overview - The Hang Seng Index fell by 3.5% last week, closing at 24,507 points, while the Hang Seng Tech Index dropped by 4.9% to 5,397 points, indicating a short-term pullback after a recent upward trend[1] - The average daily trading volume reached over HKD 282 billion, with net inflows into Hong Kong Stock Connect amounting to HKD 53.1 billion, suggesting a renewed acceleration in capital inflow[1] Economic Data - China's July official and Caixin PMI fell below the expansion threshold for four consecutive months, reflecting economic weakness[2] - The U.S. Q2 GDP growth slowed to 2.0%, with July non-farm payrolls adding only 73,000 jobs, significantly below the expected 104,000[3] - The labor force participation rate in the U.S. decreased to 62.2%, while the unemployment rate rose to 4.2%, indicating a growing number of unemployed individuals[3] Sector Performance - NIO's stock rose by 8.6% on Friday after the launch of its new L90 SUV, while its stock increased by 38% in July[4] - The healthcare sector saw a 1.9% increase in the Hang Seng Healthcare Index, driven by positive sentiment towards innovative drug companies[4] - The renewable energy sector experienced declines, with major solar stocks like Xinyi Solar and GCL-Poly Energy falling by 4.9% and 5.7%, respectively[5] Company Insights - WuXi AppTec's revenue for H1 2025 is projected to grow by 20.6% to RMB 20.8 billion, with Non-IFRS adjusted net profit expected to rise by 44.4% to RMB 6.31 billion[6] - The company plans to distribute a mid-term dividend of RMB 3.50 per 10 shares, which is expected to boost market confidence[8] - The target price for WuXi AppTec has been raised to HKD 121.00, with an upgraded rating to "Buy" based on improved revenue forecasts[9]

Group 1: Economic Indicators - The U.S. non-farm payrolls increased by 73,000 in July, falling short of the expected 104,000 and marking a nine-month low [1] - The combined job additions for May and June were revised down by 258,000, indicating a significant slowdown in employment growth [1] Group 2: Oil Production - Major oil-producing countries, including Saudi Arabia, Russia, Iraq, and the UAE, plan to approve a significant production increase of 548,000 barrels per day in September [2] - These countries had previously announced voluntary production cuts of 2.2 million barrels per day, which have been extended until March 2025 [2] Group 3: Monetary Policy - The People's Bank of China is committed to implementing a moderately loose monetary policy, including lowering reserve requirements and interest rates to support economic growth [4] - The central bank aims to maintain ample liquidity and improve the financing costs for the economy [4] Group 4: Taxation Changes - Starting from August 8, 2025, the Ministry of Finance and the State Taxation Administration will reinstate VAT on interest income from newly issued government bonds and other financial instruments [5] Group 5: Digital Transformation in Manufacturing - Eight departments in China have issued a plan for the digital transformation of the machinery industry, aiming to establish at least 200 exemplary smart factories by 2027 [6][7] - The plan emphasizes the widespread application of digital technologies in various manufacturing processes and aims for 50% of enterprises to achieve a maturity level of at least two in smart manufacturing capabilities [6][7] Group 6: Corporate Actions - China Shenhua announced plans to issue shares and pay cash to acquire assets from its controlling shareholder, leading to a temporary suspension of its stock [8] Group 7: Market Analysis and Strategies - Major brokerages are focusing on sectors such as AI, innovative pharmaceuticals, and resources, indicating a trend towards high-consensus stocks rather than low-positioned stocks [9] - The market is expected to experience fluctuations, with a potential return to an upward trend in late August, driven by earnings reports and geopolitical events [12][13] - Analysts suggest that the current market environment remains conducive to a slow bull market, supported by ample liquidity and positive investor sentiment [18][20]

Group 1: Market Reactions - The U.S. stock market experienced significant volatility following the release of disappointing non-farm payroll data, with major indices declining sharply: Nasdaq down 2.24%, Dow Jones down 1.23%, and S&P 500 down 1.6% [3][4] - The non-farm payroll report showed only 73,000 jobs added in July, the lowest increase since October of the previous year, with substantial downward revisions for May and June, totaling a reduction of 258,000 jobs [6][7] - Following the employment data, the probability of a rate cut in September rose to 64%, up from less than 40% prior to the report, indicating a shift in investor sentiment towards easing monetary policy [6] Group 2: Berkshire Hathaway's Financial Performance - Berkshire Hathaway reported Q2 2025 revenue of $92.515 billion, slightly above market expectations, but down 1.22% year-over-year, with net income falling 59% to $12.37 billion [8][10] - The company continued its trend of stock sales, offloading approximately $6.92 billion in stocks while purchasing only $3.9 billion, marking the 11th consecutive quarter of net stock sales [8][10] - A significant write-down of $3.76 billion was announced for its stake in Kraft Heinz, attributed to non-temporary impairment, reflecting concerns over the company's financial health [8][10] Group 3: Economic and Political Context - The release of the non-farm payroll data led to political backlash, with President Trump calling for the dismissal of the Labor Statistics Bureau head, alleging manipulation of employment figures for political purposes [7] - Analysts suggest that the current economic environment and uncertainties may lead to continued volatility in the market, with Berkshire Hathaway's cash reserves of $344.1 billion indicating a cautious investment stance [10][11]

Commodity Market Overview - Domestic bulk commodity futures mainly declined during the week from July 28 to August 1, with the black series experiencing a high-level correction after reaching new highs the previous week [1] - In the energy and chemical sector, fuel oil rose by 0.03%, crude oil increased by 2.92%, while lithium carbonate fell by 14.41% [1] - The black series saw coking coal drop by 17.14%, coke down by 10.10%, and iron ore down by 2.43% [1] - Basic metals experienced declines with Shanghai silver down 5.05%, lead down 1.20%, and nickel down 3.69% [1] - Agricultural products saw live pig prices decrease by 2.29%, soybean meal down by 0.36%, and palm oil down by 0.29% [1] - The shipping sector saw a decline in the European shipping index by 6.78% [1] Gold Market Insights - The market's risk aversion sentiment increased, pushing gold prices up, with COMEX gold rising by 2.32% to $3416.0 per ounce, and London gold up by 0.77% to $3362.6850 per ounce [1] - According to the World Gold Council's report, global gold demand reached 1249 tons in Q2 2025, a 3% year-on-year increase, with total demand by value soaring 45% to $132 billion, setting a new historical high [2] - Gold ETF investments were a key driver, with inflows of 170 tons in Q2, contrasting with minor outflows in the same period of 2024 [2] - The supply of gold increased by 3% to 1249 tons, with recycled gold supply up by 4%, although still relatively subdued in the high gold price environment [2] - Analysts predict that gold prices may fluctuate within a narrow range in the second half of the year due to macroeconomic uncertainties, but any significant deterioration in the global economy or geopolitical situation could enhance gold's appeal as a safe-haven asset [2][3] Oil Market Dynamics - Oil prices experienced a slight rebound, with Brent crude rising by 1.65% to $69.52 per barrel and WTI crude up by 1.36% to $67.26 per barrel [4] - The anticipated peak in refined oil consumption in the Northern Hemisphere during Q3 is expected to boost crude oil demand, supported by a decrease in EIA crude oil inventories [4] - However, the U.S. EIA reported an unexpected increase in crude oil inventories by approximately 7.7 million barrels, exceeding market expectations and leading to a decline in international oil prices [4] - Long-term projections indicate that OPEC+ may continue to increase production, potentially leading to oversupply pressures on oil prices [5] Agricultural Products Overview - The average price of live pigs increased by 0.22 yuan to 14.19 yuan per kilogram, while futures prices for live pigs showed mixed trends [10] - The second quarter saw a 2% increase in live pig stocks compared to the previous quarter and year, indicating higher expected outflows in the second half of the year [10] - Despite the increase in stocks, the current supply-demand balance does not appear to be overly strained, with future price movements likely influenced by the weight of pigs at the time of sale [10]