Core Viewpoint - Markets are currently positioned for a soft landing, but there are concerns that pent-up demand and renewed fiscal spending could lead to higher growth and inflation than anticipated [1] Group 1 - Strategists are warning that the combination of pent-up demand and increased fiscal spending may push economic growth beyond expectations [1] - The potential for inflation to rise due to these factors is also highlighted, indicating a need for careful monitoring [1]

Market Performance - The S&P 500 Index is down -0.24%, the Dow Jones Industrials Index is down -0.09%, and the Nasdaq 100 Index is down -0.24% [1] - March E-mini S&P futures are down -0.28%, and March E-mini Nasdaq futures are down -0.27% [1] Sector Performance - Stock indexes are declining, primarily due to losses in megacap technology stocks [2] - A significant drop in metals prices is negatively impacting mining stocks [2] - Crude oil prices have increased by more than +2%, benefiting energy producers and mitigating broader market losses [4] Commodity Market - Silver and platinum have sharply fallen from record highs due to profit-taking and technical selling after reaching overbought levels [3] - The CME has raised margin levels for precious metals trading, leading to long liquidation pressure [3] Economic Indicators - Seasonal factors are bullish for stocks, with the S&P 500 historically rising 75% of the time in the last two weeks of December, averaging a 1.3% increase [5] - Upcoming US economic news includes expectations for a +1.0% increase in Nov pending home sales and a +3.5 point rise in the Dec MNI Chicago PMI [6] - Initial weekly unemployment claims are projected to increase by 1,000 to 215,000 [6] - The Dec S&P manufacturing PMI is expected to remain unchanged at 51.8 [6] Interest Rate Expectations - The market is pricing in a 19% probability of a -25 basis point rate cut at the FOMC's next meeting on January 27-28 [7]

Market Trends - Ultra-long bonds are threatening to become a pain point for investors [1] - Fiscal spending jitters are putting one of the world's most volatile markets back into the spotlight [1]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The focus is shifting towards domestic demand in China due to a 90-day tariff truce between the US and China, while export performance remains under observation [2] - High-frequency indicators have been introduced to track property market trends and government expenditure [2] Summary by Relevant Sections Exports - June container forward prices are double the spot rate, indicating potential volume growth despite a slight drop in export indicators such as imports from Korea and shipping volumes [4] - Export growth is expected to slow in May before a potential recovery in June [4] Property Sector - Mixed signals are observed in the property sector, with new home sales slightly down compared to 2024, while secondary market transaction volumes have increased [4] - Land sales have surged by approximately 35% in May compared to the same period in 2024, which may support new home construction [4] - Local governments are issuing special Local Government Bonds (LGBs) to purchase idle land, although the scale is smaller than in 2018-2019 [4] Fiscal Spending - Net CGB funding has reached 40% year-to-date, significantly higher than the average of 26% over the past three years [4] - Total government spending has increased by 7.2% year-on-year, surpassing the average growth of 4% over the past three years [4] - The robust fiscal spending is expected to cushion against external economic challenges and maintain resilient domestic demand [4]