February 8, 2026 08:27 PM GMT Investor Presentation | Asia Pacific M Foundation What's Next After Market Turmoil? Related reports: Why a Broad VAT Hike Is Unlikely (3 February 2026) Morgan Stanley Asia Limited Robin Xing Chief China Economist Robin.Xing@morganstanley.com +852 2848-6511 Jenny Zheng, CFA Economist Jenny.L.Zheng@morganstanley.com +852 3963-4015 For important disclosures, refer to the Disclosure Section, located at the end of this report. Downloaded by Neil.Wang@troweprice.com Not for redistrib ...

Naomi, we're seeing a little bit of downside for the Japanese yen, but it doesn't seem to be at least catastrophic for now, when it comes to the pace of potential losses that we could have seen with the supposed Takaichi trade. What are your expectations now that you've seen the outcome of the elections. Well, what's interesting is that even though Takaichi won quite a lot of popular support, markets haven't voted yet.And so I think it's sensible to to give Takaichi the benefit of the doubt because after al ...

Core Viewpoint - The discussion emphasizes a positive outlook for the market, driven by factors such as a dovish Federal Reserve, supportive fiscal policies, and ongoing AI capital expenditure growth, suggesting a strong economic environment ahead. Market Outlook - The Carson Group holds an aggressive view for the market's trajectory towards 2026, indicating that credit spreads show no stress in the financial system, with high yield bonds performing well relative to treasuries, signaling confidence in credit markets [1][2]. - The advanced decline lines indicate strong market participation, particularly in sectors like industrials and small caps, which have recently outperformed the S&P 500 [1][2]. - Historical patterns suggest that when advanced decline lines reach new highs, there is typically a 9 to 12 month period before the market peaks, indicating potential for continued growth [1]. Federal Reserve and Inflation - The Federal Reserve is perceived as more dovish compared to previous midterm years, which were marked by hawkish policies, suggesting a more favorable environment for investors [1][2]. - Inflation is currently modeled around 3%, with expectations that the Fed may not hike rates further and could potentially cut rates in the latter half of the year [2][3]. - The Fed's historical actions of cutting rates near all-time highs have led to positive market performance in the following year, reinforcing the notion that the current economic conditions are stable [2]. Economic Indicators - The labor market remains strong, with unemployment at 4.4%, indicating a healthy economy, and jobless claims not showing significant spikes [3]. - Productivity growth is noted at 4.9%, which historically correlates with better economic performance and stock market returns [3][4]. - The fiscal policy is expected to remain supportive, with tax cuts and increased consumer spending anticipated to bolster economic activity [3][4]. Sector Performance - The discussion highlights a broadening market theme, where sectors beyond the major tech stocks (MAG) are contributing positively to market gains, with small and mid-cap stocks showing significant performance [7][8]. - The S&P 500 equal weight index recently reached an all-time high, indicating that a wider array of stocks is participating in the market rally [8][9]. Bull Market Cycle - The current bull market is considered to be in its early stages, with historical data suggesting that bull markets can last significantly longer than commonly perceived, potentially extending for several more years [14][16]. - Small caps and energy stocks are noted to be breaking out to levels not seen in years, indicating potential for continued growth in these sectors [17][18].

Group 1: Leadership and Roles - Frank J. Bisignano has taken on the dual role of commissioner of the Social Security Administration (SSA) and CEO of the Internal Revenue Service (IRS), overseeing two of the largest government agencies with significant budgets [1][3] - Bisignano's background includes leadership positions in major financial institutions and fintech companies, such as CEO of Fiserv and First Data, and co-COO of J.P. Morgan Chase [2] Group 2: Agency Operations and Budget - The SSA is the largest retirement system globally, disbursing $1.5 trillion annually to over 70 million beneficiaries, while the IRS collects more than $5 trillion in annual taxes, funding over 90% of federal operations [3] - The combined operating budgets of the SSA and IRS exceed $30 billion, with a workforce of around 150,000, highlighting the need for improved efficiency and customer service [4] Group 3: Modernization Efforts - Bisignano is focusing on modernizing the IRS by implementing a technology-driven approach to tax administration, drawing from his experience in digital transformations [5] - This modernization could lead to faster processing times and more data-driven enforcement, necessitating upgrades in systems, controls, and outreach strategies for companies and advisors [6]

Kevin Warsh isn't just a Federal Reserve nominee. He's a catalyst for the spread. Tim Spence, CEO of Fifth Third Bancorp (FITB), told Yahoo Finance's Opening Bid that the prospect of a Warsh-led Fed creates a "pretty golden environment for banks." His optimism hinges on Warsh slashing interest rates while aggressively shrinking the Fed's $6.6 trillion balance sheet. For an industry that makes its bread on the difference between short-term costs and long-term yields, "some steepness" to the curve — where ...

ab 28 January 2026 Global Research US Economic Perspectives US Fiscal Outlook: 2026 and beyond Fiscal policy plays a central role in the 2026 US economic outlook A large part of the optimism for economic growth in 2026 is built on expectations that the One Big Beautiful Bill Act (OBBBA) will bolster household spending and support business investment. We estimate that overall fiscal policy should add ~0.3pp to real GDP growth in 2026, including our estimate that the OBBBA adds ~0.45pp to growth, while slowin ...

Summary of Key Points from the Conference Call Industry Overview - The discussion primarily revolves around the U.S. economy and the Federal Reserve's monetary policy, focusing on employment, inflation, and economic growth. Core Insights and Arguments - **Economic Growth**: The U.S. economy expanded at a solid pace, with consumer spending remaining resilient and business fixed investment continuing to grow. However, the housing sector has shown weakness [2][3]. - **Labor Market**: The unemployment rate was stable at 4.4%, with job gains averaging 22,000 per month in non-farm payrolls. Private payrolls increased by an average of 29,000 per month, indicating some stabilization in the labor market [2][3][10]. - **Inflation Trends**: Inflation has eased from its mid-2022 highs but remains elevated. The total PCE prices rose by 2.9% over the past year, while core PCE prices increased by 3.0%. The elevated inflation is largely attributed to the goods sector, influenced by tariffs, while disinflation is observed in the services sector [3][4][39]. - **Monetary Policy Stance**: The Federal Open Market Committee decided to maintain the federal funds rate target range at 3.5%-3.75%. This decision follows a cumulative reduction of 75 basis points over the previous three meetings, aimed at stabilizing the labor market and guiding inflation towards the 2% target [4][5]. - **Future Rate Adjustments**: The Fed is positioned to adjust the policy rate based on incoming data and evolving economic conditions. The committee emphasized a meeting-by-meeting approach to decision-making [5][27]. - **Tariff Impact**: The effects of tariffs on goods prices are expected to peak and then decline, contributing to a one-time price increase rather than ongoing inflation. The Fed anticipates that as tariff effects diminish, it may allow for policy loosening [39][81]. Additional Important Insights - **Consumer Sentiment**: There is a disconnect between consumer sentiment surveys, which indicate negative perceptions of the economy, and actual consumer spending data, which remains strong [70][75]. - **AI and Labor Market**: The impact of AI on the labor market is being closely monitored, with concerns that it may supplant entry-level jobs. However, technological advancements are also expected to increase productivity over time [76][77]. - **Fiscal Policy Concerns**: The U.S. federal budget deficit is on an unsustainable path, which could pose long-term risks to the economy. The Fed emphasizes the need for addressing fiscal challenges [57][58]. - **Geopolitical Risks**: Geopolitical risks, particularly related to energy prices, are acknowledged, but the current economic outlook remains stable despite global uncertainties [85][86]. This summary encapsulates the key points discussed in the conference call, highlighting the current state of the U.S. economy, labor market dynamics, inflation trends, and the Federal Reserve's monetary policy approach.

Summary of Key Points from the US Economics Analyst Conference Call Industry Overview - The analysis focuses on the US economy, particularly GDP growth, labor market dynamics, inflation trends, and fiscal policy implications for 2026. Core Insights and Arguments 1. **GDP Growth Forecast**: The company forecasts GDP growth at 2.5% for 2026 Q4/Q4, above the consensus of 2.1%. For the full year, the forecast is 2.9% compared to a consensus of 2.4% [5][7][70]. 2. **Business Investment**: Business investment is expected to be the strongest component of GDP, growing over 5% on both a Q4/Q4 and full-year basis, which is double the consensus forecast. This growth is attributed to spending on artificial intelligence, easier financial conditions, and new tax incentives [12][16][70]. 3. **Residential Investment**: Residential investment is projected to remain the weakest component of GDP, with single-family housing starts unlikely to rebound above 1 million due to a construction boom earlier in the cycle and affordability constraints [19][20][29][70]. 4. **Labor Market Dynamics**: The labor market is expected to remain balanced, with wage growth around 3.5%. However, job losses in AI-exposed industries are anticipated to increase, potentially displacing 6-7% of current jobs [31][35][70]. 5. **Inflation Trends**: Core PCE inflation is expected to decline from 3% in December 2025 to 2.1% in December 2026, with significant drops in core goods inflation and shelter inflation [42][51][70]. 6. **Federal Reserve Policy**: The Fed is expected to implement two rate cuts in 2026, with the next cut projected for June, bringing the rate to 3-3.25% [56][58][70]. 7. **Fiscal Policy Outlook**: The company does not expect major new fiscal stimulus measures ahead of the midterm elections, with a positive fiscal impulse averaging +0.5pp from previously passed tax cuts and spending increases [62][64][70]. Additional Important Insights - **Tariff Policy**: The effective tariff rate is likely to remain stable or decrease slightly due to political considerations ahead of the midterm elections [59][60][70]. - **Household Formation**: A decline in net immigration is expected to reduce new household formation, further impacting the housing market [24][70]. - **Affordability Issues**: High prices and mortgage rates are constraining demand for new single-family housing, despite a national housing shortage [26][29][70]. - **Investment Incentives**: New tax incentives from the One Big Beautiful Bill Act are expected to boost investment primarily in manufacturing, mining, and transportation sectors [16][70]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the economic outlook for 2026 as analyzed by the company.

Core Viewpoint - The CF40 macro policy quarterly report indicates that China's macro economy shows early signs of recovery in 2025, with monetary policy being crucial for stimulating endogenous growth in 2026 [1][2]. Economic Indicators - In 2025, key financial indicators such as the stock market, RMB exchange rate, social financing growth, and corporate deposits have shown significant improvement [1]. - Corporate profits have halted a multi-year decline, and overall consumption and labor market conditions remain stable [1]. Recovery Support - The recovery is primarily supported by fiscal policy, external demand, and prior price adjustments, but investment and the real estate market still face considerable pressure [1]. - The endogenous growth momentum remains weak, and the sustainability of the recovery needs to be strengthened [1]. Policy Recommendations for 2026 - The report emphasizes the need for increased counter-cyclical policy efforts, particularly through active fiscal measures and a focus on monetary policy [1][2]. - It is suggested that broad fiscal spending should be around 41 trillion yuan, with a public budget deficit aligned with 4% of GDP [2]. Monetary Policy Focus - The importance of monetary policy in expanding domestic demand is highlighted, with recommendations to lower the 7-day reverse repo rate, deposit rates, and LPR rates [2]. - A commitment to inflation targets and significant reductions in policy rates are seen as key actions to shift expectations for businesses and households [2][3]. Structural Issues and Market Dynamics - The long-standing "strong supply, weak demand" contradiction is noted as a source of instability in economic growth, with low consumption as a direct manifestation [3]. - To address this, it is proposed that the market should play a decisive role in resource allocation, alongside improving residents' income and social security [3].

分组1 - The upcoming FOMC meeting is expected to keep interest rates steady, with a focus on how the Fed communicates its stance on inflation and employment [1][2][3] - The US economy is transitioning from headwinds to tailwinds, with lower oil prices, a weaker dollar, and ongoing AI and energy data center investments contributing positively [4][5] - The "one big beautiful bill" allows companies to immediately expense 100% of their capital expenditures, which is anticipated to boost sectors benefiting from strong capital expenditures [6] 分组2 - The performance of small-cap stocks, particularly the Russell 2000, has been driven by companies with negative earnings outperforming those with positive earnings, which is seen as unusual [15][16][17] - Despite the unusual performance dynamics, there are expectations for a more favorable environment for all stocks in 2026 due to various economic tailwinds [18]