Core Viewpoint - U.S. industrial output showed significant growth in January, as reported by the Federal Reserve [1] Group 1: Industrial Output - The data indicates a robust increase in industrial production, reflecting a positive trend in the manufacturing sector [1] - The growth in industrial output is a key indicator of economic health and can influence investment decisions [1]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Chinese economy, specifically analyzing Q4 GDP performance and December economic activity indicators, including industrial production, fixed asset investment, and retail sales. Core Insights and Arguments 1. **GDP Growth**: China's real GDP growth moderated to **4.5% year-on-year (yoy)** in Q4 from **4.8% yoy** in Q3, primarily due to a high base effect. Sequentially, GDP growth showed a slight acceleration to **1.2% quarter-over-quarter (qoq) seasonally adjusted non-annualized** in Q4 from **1.1% qoq** in Q3 [1][8][17]. 2. **Industrial Production**: Industrial production (IP) growth increased to **5.2% yoy** in December from **4.8% yoy** in November, driven by stronger-than-expected exports, particularly in the computer & electronics equipment and pharmaceutical sectors [1][9][10]. 3. **Fixed Asset Investment (FAI)**: FAI growth declined significantly to **-13.0% yoy** in December from **-10.7% yoy** in November, marking the first full-year contraction since the 1990s at **-3.8% yoy** for 2025. This decline is attributed to statistical corrections and fundamental factors such as "anti-involution" policies and a prolonged property downturn [1][11][12]. 4. **Retail Sales**: Retail sales growth slowed to **0.9% yoy** in December from **1.3% yoy** in November, indicating broad-based weakness across sectors. Online and offline sales both decelerated, with restaurant sales growth also declining [1][12][13]. 5. **Services Sector Performance**: The services industry output index grew by **5.0% yoy** in December, up from **4.2% yoy** in November, suggesting that services consumption is outpacing goods consumption [1][13]. 6. **Property Market Trends**: The property market continued to show weakness, with new home starts and completions contracting by **-19.3% yoy** and **-18.3% yoy**, respectively, in December. Property sales also remained depressed, with a **-15.5% yoy** decline in volume terms [1][14]. 7. **Labor Market Conditions**: The nationwide unemployment rate remained stable at **5.1%** in December, with a slight decrease from **5.2%** in November after seasonal adjustment. The youth unemployment rate for the 16-24 age group was reported at **16.9%** in November [1][16]. 8. **Future Economic Outlook**: The forecast for full-year real GDP growth in 2026 is maintained at **4.8%**, slightly above the market consensus of **4.5%**. The report suggests that incremental policy easing will be necessary to address subdued domestic demand and structural challenges [1][17][34]. Additional Important Insights - The divergence in economic performance is highlighted, with strong export growth contrasting with weak domestic demand [1]. - The report emphasizes the importance of statistical corrections in interpreting recent economic data, particularly regarding FAI [1][11]. - The services sector's growth is noted as a positive sign amid overall economic challenges, indicating a shift in consumer behavior towards services rather than goods [1][13]. This summary encapsulates the key findings and insights from the conference call, providing a comprehensive overview of the current state and outlook of the Chinese economy.

Group 1: Production Overview - In December, the production of raw coal, crude oil, and natural gas in large-scale industries remained stable, while electricity production continued to grow [1] - The raw coal output in December was 440 million tons, a year-on-year decrease of 1.0%, with an average daily output of 14.1 million tons [1] - The crude oil production in December was 17.8 million tons, a year-on-year decrease of 0.6%, with an average daily output of 570,000 tons [1] - The natural gas production in December was 23 billion cubic meters, a year-on-year increase of 5.1%, with an average daily output of 740 million cubic meters [1] Group 2: Yearly Production Data - For the entire year, the raw coal production reached 4.83 billion tons, a year-on-year increase of 1.2% [1] - The total crude oil production for the year was 216.05 million tons, a year-on-year increase of 1.5% [1] - The total natural gas production for the year was 261.9 billion cubic meters, a year-on-year increase of 6.2% [1] Group 3: Electricity Production - The electricity generation in December was 858.6 billion kilowatt-hours, a year-on-year increase of 0.1%, with an average daily generation of 27.7 billion kilowatt-hours [1] - For the entire year, the electricity generation reached 9,715.9 billion kilowatt-hours, a year-on-year increase of 2.2% [1] Group 4: Breakdown by Energy Source - In December, the decline in thermal power generation narrowed to 3.2%, a decrease of 1.0 percentage point compared to November [2] - Hydropower generation increased by 4.1%, but the growth rate slowed by 13.0 percentage points compared to November [2] - Nuclear power generation grew by 3.1%, with a slowdown of 1.6 percentage points from November [2] - Wind power generation increased by 8.9%, with a slowdown of 13.1 percentage points compared to November [2] - Solar power generation grew by 18.2%, with a slowdown of 5.2 percentage points from November [2]

Group 1: Coal, Oil, and Natural Gas Production - In December, the production of raw coal in large-scale industries was 440 million tons, a year-on-year decrease of 1.0%, with an average daily output of 14.1 million tons [1] - For the entire year, the raw coal production reached 4.83 billion tons, an increase of 1.2% year-on-year [1] - The production of crude oil in December was 17.8 million tons, a year-on-year decrease of 0.6%, with an average daily output of 570,000 tons [3] - The total crude oil production for the year was 216.05 million tons, reflecting a year-on-year increase of 1.5% [3] - Natural gas production in December was 23 billion cubic meters, a year-on-year increase of 5.1%, with an average daily output of 740 million cubic meters [5] - The total natural gas production for the year was 261.9 billion cubic meters, marking a year-on-year increase of 6.2% [5] Group 2: Electricity Production - In December, the electricity generation in large-scale industries was 858.6 billion kilowatt-hours, a year-on-year increase of 0.1%, with an average daily generation of 27.7 billion kilowatt-hours [7] - For the entire year, the total electricity generation reached 9,715.9 billion kilowatt-hours, representing a year-on-year increase of 2.2% [7] - The production of thermal power in December decreased by 3.2%, although the decline was narrower compared to November [7] - Hydropower generation increased by 4.1%, but the growth rate slowed by 13.0 percentage points compared to November [7] - Nuclear power generation grew by 3.1%, with a slowdown of 1.6 percentage points from November [7] - Wind power generation increased by 8.9%, with a deceleration of 13.1 percentage points compared to November [7] - Solar power generation saw an increase of 18.2%, but the growth rate slowed by 5.2 percentage points from November [7]

Market Overview - U.S. stocks showed mixed performance, with the Dow Jones index decreasing by 0.1% to 49,398.52, while the NASDAQ rose by 0.13% to 23,559.46 and the S&P 500 increased by 0.09% to 6,950.87 [1] - European shares declined, with the eurozone's STOXX 600 falling by 0.21%, Spain's IBEX 35 Index down by 0.14%, London's FTSE 100 slipping by 0.13%, Germany's DAX decreasing by 0.36%, and France's CAC 40 down by 0.91% [7] - Asian markets mostly closed lower, with Japan's Nikkei down by 0.32%, Hong Kong's Hang Seng Index declining by 0.29%, China's Shanghai Composite falling by 0.26%, while India's BSE Sensex gained by 0.23% [8] Sector Performance - Information technology shares increased by 0.3% on Friday, while materials stocks dipped by 1% [2] Commodities - Oil prices rose by 1% to $59.78, while gold decreased by 0.2% to $4,613.60. Silver fell by 3.4% to $89.170, and copper dropped by 2.7% to $5.8310 [6] Company News - Venus Concept Inc (NASDAQ:VERO) shares surged by 376% to $6.80 following a report of Madryn Asset Management holding a 91% stake [10] - Jeffs Brands Ltd (NASDAQ:JFBR) shares increased by 196% to $1.65 after announcing a distribution agreement for its subsidiary [10] - Locafy Ltd (NASDAQ:LCFY) shares rose by 73% to $5.44 due to an expanded partnership announcement [10] - Sasol Ltd (NYSE:SSL) shares fell by 12% to $6.30 after a downgrade from JP Morgan [10] - Sigma Lithium Corp (NASDAQ:SGML) shares decreased by 10% to $12.87 amid reports of safety concerns leading to the shutdown of waste piles in Brazil [10] - Erayak Power Solution Group Inc (NASDAQ:RAYA) shares dropped by 24% to $3.00, reflecting overall market weakness in electrical equipment companies [10] Economic Indicators - U.S. industrial production increased by 0.4% month-over-month in December, matching the previous month's performance and exceeding market estimates of 0.1% [3][11] - The Federal Reserve Bank of New York's general business activity index improved to -16.1 in January from -20.0 in the prior month [11]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Chinese economy, specifically the Q4 GDP and December activity data, including industrial production (IP), fixed asset investment (FAI), and retail sales [1][2]. Core Insights and Arguments 1. **Industrial Production (IP) Growth**: - Expected to rise to **5.4% year-on-year (yoy)** in December from **4.8% yoy** in November, driven by stronger-than-expected manufacturing PMIs and exports [1][2]. - Manufacturing exports projected to increase to **6.6% yoy** in December from **5.9% yoy** in November [2]. - Notable decline in auto output growth to **-4.6% yoy** in December from **+3.0% yoy** in November, and a widening contraction in steel production to **-5.1% yoy** [2][10]. 2. **Fixed Asset Investment (FAI)**: - Year-on-year FAI growth expected to remain depressed at **-8.9%** in December, slightly improving from **-10.7%** in November [1][10]. - Year-to-date FAI growth forecasted at **-3.3% yoy** in December, reflecting both statistical corrections and structural headwinds such as "anti-involution" policies and a prolonged property downturn [10]. 3. **Retail Sales**: - Anticipated to slow further to **0.6% yoy** in December from **1.3% yoy** in November, influenced by declining auto sales and subdued home appliance sales due to funding shortages [1][10]. - Auto retail sales volume growth dropped to **-14% yoy** in December from **-8% yoy** in November [10]. 4. **Real GDP Growth**: - Forecasted to moderate to **4.5% yoy** in Q4 from **4.8% yoy** in Q3, with domestic demand weakening despite resilient exports [1][10]. - The forecast suggests that the full-year real GDP growth for 2025 would be around **5.0%**, aligning with the government's growth target [10]. Additional Important Insights - The report indicates that the forecasts for December IP are modestly above market consensus, while those for retail sales and FAI are below consensus [7][10]. - The services industry output index is expected to remain stable and outperform retail sales growth, indicating a shift in consumption patterns towards services [10]. - The report highlights the potential for revisions in historical estimates of sequential GDP growth when the National Bureau of Statistics (NBS) releases quarterly GDP data [10]. This summary encapsulates the key points and insights from the conference call regarding the Chinese economy's performance and expectations for Q4 and December activity data.

Economic Growth - Q3 GDP growth was reported at +4.3%, significantly exceeding the +3.2% expected by analysts, marking the strongest growth in two years and an increase from Q2's +3.8% [2] - Core GDP for Q3 reached +2.9%, 30 basis points above expectations and the highest since Q1's +3.3% [3] Consumer and Business Sentiment - December Consumer Confidence is expected to improve to 91.7 from 88.7 in the previous month, indicating a positive outlook among consumers [6] Durable Goods Orders - Durable Goods Orders for October fell to -2.2%, below the consensus estimate of -1.1%, marking the fourth negative print of 2025 [4] - Excluding volatile Transportation costs, Durable Goods Orders showed a slight increase of +0.2% in October, the weakest performance since April [5] Market Implications - The strong GDP growth suggests a lower likelihood of interest rate cuts by the Federal Reserve, particularly at the upcoming January FOMC meeting, where the chance of a cut was previously at +24% [5]

Group 1 - Industrial production for November increased by 0.2%, exceeding expectations of a 0.1% rise, marking the best performance since June of this year [1] - Capacity utilization reached 76.0%, the highest level since July of this year, indicating improvement in manufacturing despite not operating at full capacity [2] - Interest rates have been rising following stronger-than-expected GDP growth and price index data, with the 10-year Treasury yield up by 2 basis points and the 2-year yield up by 3 basis points [2] Group 2 - The dollar is approaching a critical level, with a potential close under 98.14, which would be the lowest in two and a half months, indicating a possible weakening trend [3]

Industrial Production & Capacity Utilization - Industrial production increased by 02% in November, surpassing expectations of 01%, marking the best performance since June [1] - Capacity utilization reached 760% in November, exceeding the expected 759%, achieving the highest level since July [2] - These figures indicate an improvement in industrial activity, despite manufacturing not operating at full capacity [2] Interest Rates & Treasury Market - Interest rates have been rising following a higher-than-expected price index on GDP and stronger GDP growth [2] - The 10-year Treasury yield is up by two basis points to 419% [2] - The 2-year Treasury yield is up by three basis points to 454% [2] - There is a slight flattening bias observed in the Treasury complex [3] Currency Market - If the US dollar closes below 9814, it will be the lowest close in two and a half months [3]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the economic activity data from China for November, highlighting significant misses in market expectations across various sectors, particularly retail sales and industrial production [1][2][3]. Core Insights and Arguments 1. **Industrial Production (IP)** - IP growth decreased to **4.8% year-on-year** in November from **4.9%** in October, falling short of forecasts (GS: **5.1%**, Bloomberg consensus: **5.0%**) [2][8]. - Sequentially, IP showed a **0.5% month-on-month** increase after seasonal adjustment, contrasting with a **-0.4%** decline in October [8]. - The slowdown in IP was primarily driven by reduced output in the automobile and utilities sectors, which outweighed gains in special equipment and pharmaceuticals [8]. 2. **Fixed Asset Investment (FAI)** - FAI contracted by **-2.6% year-to-date** year-on-year in November, worsening from **-1.7%** in October [3][9]. - On a single-month basis, FAI fell by **-10.7% year-on-year** in November, slightly improving from **-11.4%** in October [9]. - The decline in FAI is attributed to statistical corrections by the NBS and ongoing issues in the property sector [9]. 3. **Retail Sales** - Retail sales growth significantly slowed to **1.3% year-on-year** in November, down from **2.9%** in October, missing expectations (GS: **2.3%**, consensus: **2.9%**) [6][11]. - The decline was broad-based, with notable drops in auto sales (-8.3%) and home appliances (-19.4%) [11]. - The earlier start of the "Double 11" Online Shopping Festival distorted demand, pulling some sales from November into October [11]. 4. **Services Industry Output** - The Services Industry Output Index growth moderated to **4.2% year-on-year** in November from **4.6%** in October, indicating a slowdown in the services sector [12]. 5. **Property Market** - The property market continued to show weakness, with new home starts and completions contracting by **-27.6%** and **-25.3%** year-on-year, respectively [13]. - Property sales volume fell by **-17.0%** and value by **-24.6%** in November, reflecting ongoing challenges in the sector [13]. 6. **Labor Market** - The nationwide unemployment rate remained stable at **5.1%** in November, with the youth unemployment rate for ages 16-24 declining slightly to **17.3%** [14]. 7. **GDP Growth Forecast** - Incorporating October-November data, there is a small downside risk to the Q4 real GDP growth forecast of **4.5% year-on-year**, with a sequential improvement in December activity needed to achieve a **5%** full-year growth [15]. Additional Important Insights - The report emphasizes that the recent slump in economic indicators should not be over-interpreted, as statistical corrections have played a significant role alongside fundamental economic challenges [1][9]. - The data reflects broader economic trends in China, including the impact of "anti-involution" policies and a prolonged downturn in the property market, which are critical for investors to consider [1][9].