Market Overview - The U.S. federal government has been shut down for over 10 days due to the Senate's rejection of funding bills, impacting hundreds of thousands of federal employees[3] - Most European and American stock markets experienced declines, while Asian markets benefited from expectations of U.S. Federal Reserve rate cuts[3] Fixed Income and Currency - The 10-year U.S. Treasury yield decreased by 8 basis points to 4.05%, while the U.S. dollar index rose by 1.13% to 98.8, remaining below 100[3][10] - Significant inflows into U.S. fixed income funds amounted to $182.7 billion this week[16] Equity Market Trends - Foreign capital inflow into the Chinese stock market was recorded at $3.53 billion, with active foreign funds seeing a slight outflow of $0.40 billion and passive funds inflowing $3.93 billion[3] - The S&P 500 and DAX indices are at high valuation percentiles, with PE percentiles at 94.7% and 93.1% respectively, indicating elevated market valuations[3] Commodity Performance - COMEX gold prices increased by 2.71% due to the government shutdown and Fed rate cut expectations, while Brent crude oil prices fell by 3.78%[3] Risk Indicators - The S&P 500 closed at 6552.51, below its 20-day moving average, with an increase in implied volatility indicating a cautious market sentiment[3] - The put-call ratio for the S&P 500 rose to 1.19, reflecting increased hedging demand[3] Economic Data Insights - U.S. manufacturing PMI and industrial output showed marginal improvement, while non-manufacturing PMI and inflation expectations weakened[3] - The probability of a 25 basis point rate cut in October is at 98.30%, up from 96.20% the previous week[3]

Market Overview - Jerome Powell's dovish stance at the Jackson Hole meeting indicates rising downside risks to employment, suggesting potential interest rate cuts[4] - The Chinese stock market continues to lead globally, with the ChiNext, CSI 300, and Hang Seng Tech indices rising by 6.1%, 4.2%, and 4.1% respectively[4] Bond and Currency Markets - The 10-year U.S. Treasury yield decreased by 7 basis points to 4.26%, while the U.S. dollar index fell slightly below 100[4] - Global funds have significantly flowed into bond markets, with notable inflows into U.S. and emerging market bonds[17] Capital Flows - In the past week, overseas active funds saw an outflow of $1.38 billion, while passive funds experienced an inflow of $20.93 billion into Chinese equities[4] - Domestic capital inflows into the Chinese market amounted to $21.64 billion, with foreign capital inflows at $19.55 billion[4] Valuation Metrics - The equity risk premium (ERP) for the Shanghai Composite Index decreased to a historical percentile of 43%, while the CSI 300's ERP is at 54%[4] - The overall ERP for A-shares dropped from 59% to 53%[4] Economic Indicators - The probability of a rate cut in September has decreased to 75% from 85.4% the previous week, indicating a shift in market expectations[4] - Key upcoming economic indicators include U.S. Q2 GDP and personal consumption expenditures data[4] Risk Factors - Short-term asset price fluctuations may not reflect long-term trends, and there are risks of deeper-than-expected economic downturns in Europe and the U.S.[4]

Market Overview - Global asset prices showed an upward trend, with the Nikkei 225 and ChiNext leading the gains, while most commodities experienced declines[4] - The S&P 500 closed at 6388.64, remaining above the 20-day moving average, indicating strong momentum[4] Capital Flows - As of July 24, 2025, overseas active funds saw a net outflow of $5.35 million, while passive funds recorded an inflow of $26.01 million[18] - Domestic capital experienced a net outflow of $1.41 million, contrasted by foreign capital inflow of $20.66 million[18] Valuation Metrics - The equity risk premium (ERP) for the A-share market decreased to a historical 60th percentile, with the Shanghai Composite Index's ERP dropping from 59% to 53%[4] - The ERP for the Hang Seng Index and the CSI 300 also saw declines, indicating a shift in valuation sentiment[4] Risk Sentiment - The Chinese options market reflects an optimistic pricing trend, with a notable increase in the volume of call options for the CSI 300 above the 4100 level[4] - The put-call ratio for the S&P 500 increased to 1.16, suggesting a cautious market sentiment and rising hedging demand[4] Economic Data - U.S. economic data for June indicates resilience, with a significant improvement in CPI and PMI figures, alleviating concerns over stagflation[4] - The probability of a Fed rate cut in September rose to 64.5%, reflecting market expectations for monetary easing[4]

Global Asset Price Review - The geopolitical situation has eased, leading to a general rise in equity assets. Key events include the announcement of a ceasefire between India and Pakistan, progress in US-China trade talks, and support for a ceasefire in Ukraine by President Putin. This has resulted in increased global risk appetite, with the S&P 500 and Nasdaq 100 showing significant gains [9][10] - As of May 16, 2025, the US 10-year Treasury yield rose by 6 basis points to 4.43%, and the US dollar index increased to 101.0. The US CPI's unexpected decline has boosted market risk appetite, with the S&P 500 rising by 5.27%, outperforming developed and emerging markets [9][10] - Commodity prices saw a decline in gold by 3.72%, while Brent crude oil prices increased by 2.27% [9][10] Global Fund Flows - There has been a significant outflow of domestic capital from the Chinese stock market, while passive foreign investments have surged into it. In the past week, domestic capital outflow from the Chinese stock market amounted to $4.529 billion, while foreign capital inflow was $0.059 billion [16] - In the US, fixed income funds saw an inflow of $6.82 billion, and equity funds experienced an inflow of $21.34 billion, indicating a strong preference for US markets [16] Global Asset Valuation - The implied equity risk premium (ERP) for A-shares remains significantly higher than that of overseas markets. The historical percentile for the CSI 300 and Shanghai Composite Index's implied ERP stands at 81% and 72%, respectively, while the S&P 500, Dow Jones, and Nasdaq have ERPs of 3%, 2%, and 6% [9][10] - The risk-adjusted returns for US equities have marginally increased, with the dynamic risk-adjusted return percentiles for the S&P 500 and Nasdaq 100 rising to 42% and 32%, respectively [9][10] Global Asset Risk Indicators - The proportion of bullish sentiment among US retail investors has risen by 6.48%, with over 80% of S&P stocks trading above their 20-day moving average [9][10] - In the A-share market, over 60% of stocks are above their 20-day moving average, indicating strong momentum. The options market shows a significant increase in bullish sentiment, with a notable rise in call option open interest for the CSI 300 [9][10] Global Economic Data - The US CPI unexpectedly decreased, with April's year-on-year growth at 2.3%, down from 2.4%. This decline in inflation may reduce the urgency for interest rate cuts, especially following positive developments in US-China trade negotiations [9][10]