Summary of the Conference Call Transcript Industry Overview - **Industry**: China Economic Outlook - **Key Focus**: Public capital expenditure (capex) and private consumption trends in early 2026 Core Insights 1. **Growth Projections**: Early 2026 growth is expected to be led by public capex, with a potential pull towards 5% growth in Q1, although sustainability is questioned due to weak consumer and property sectors [1][6][8] 2. **GDP Tracking**: Q4 2025 GDP is projected to remain below 4.5%, despite a possible year-end rebound driven by fiscal expansion and resilient external demand [3][8] 3. **Public Capex Initiatives**: - Central budget for infrastructure projects increased to Rmb295 billion in Q1 2026 from Rmb200 billion in Q1 2025 - Local government bond issuance plan for Q1 2026 is Rmb665 billion, up from Rmb422 billion in the previous year [6][10] - New venture capital guidance aims to mobilize over Rmb1 trillion [10] 4. **Consumption Trends**: - Consumer spending is lagging, with retail momentum fading post-holiday and subdued service consumption - Continued support for goods trade-in programs, but initial allocations are smaller than the previous year [6][8][30] 5. **Inflation Dynamics**: - Recent upticks in CPI and PPI are not indicative of sustained reflation; core CPI remains muted due to weak final demand [7][8][25] - Inflation increases are primarily driven by commodities like gold and coal, rather than broad-based demand [7][8][25] Additional Important Points 1. **Trade-in Scheme Adjustments**: The 2026 trade-in scheme maintains a similar scale to 2025 but starts softer, with reduced subsidies for home appliances and a narrower range of eligible products [4][30] 2. **Monitoring Indicators**: Key indicators to watch in the coming months include: - Infrastructure bond issuance pace - Consumer goods trade-in program rollout - Mortgage-subsidy pilot designs post-NPC in March [8][9] 3. **Long-term Outlook**: A moderation in growth is anticipated from Q2 2026, with potential housing policy adjustments and incremental support for consumption and social welfare in the second half of the year [8][9] This summary encapsulates the key points from the conference call, focusing on the economic outlook for China, particularly regarding public investment and consumer behavior.

Wells Fargo analysts believe a combination of tax refund spending, stronger earnings in lagging sectors, and fresh liquidity from the Federal Reserve could spark a "reflation†in equities. In a note l... ...

Source: GoogleTrends, Riverfront, as of November 2025. These views are subject to change and are not intended as investment recommendations.By Chris Konstantinos Originally published December 16, 2025 For more news, information, and strategy, visit the ETF Strategist Content Hub. Risk Discussion: All investments in securities, including the strategies discussed above, include a risk of loss of principal (invested amount) and any profits that have not been realized. Markets fluctuate substantially over time, ...

Vi e w p o i n t | Xiangrong Yu AC +852-2501-2754 xiangrong.yu@citi.com See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations. 12 Dec 2025 08:00:30 ET │ 9 pages China Economics Watch January as a Potential Window for Rate/RRR Cut CITI'S TAKE Money and credit numbers for November provided limited new information on the economy towards the year-end. Government bond issuance remains the most important driver for new TSF with added quota. Household risk appetite sta ...

Vi e w p o i n t | 02 Dec 2025 23:19:47 ET │ 8 pages China Economics Few Surprises Towards Year-End – November Data Preview CITI'S TAKE We expect few surprises in Nov economic data or policy impact. We think an exports rebound could have happened, and reflation could have continued amid generally weak numbers. Yet concerns are likely on the sustainability of both. We focus more on the policy meeting and actions post-CEWC. Exports rebound likely to support production rebound? — Most activity indicators could ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Chinese economy, particularly regarding fixed asset investment (FAI) and gross capital formation (GCF) trends in 2025 and beyond [1][2][3]. Core Insights and Arguments 1. **Growth Projections**: Despite weak FAI, GCF resilience and fall stimulus are expected to keep 2025 growth on track to reach 5% [1][6]. 2. **Investment Disconnect**: There is a notable disconnect between macro fundamentals and stock market performance, with domestic demand data weakening significantly in 3Q and October [2][11]. 3. **FAI Methodology Changes**: The National Bureau of Statistics (NBS) has shifted its FAI methodology from "project progress" to "financial spending" since 2018, improving data quality but introducing potential time lags between FAI and GCF [3][8]. 4. **Factors Contributing to Weaker FAI**: - Tighter government financing has constrained new project starts. - Anti-involution measures and potential under-reporting by local governments may have suppressed reported FAI figures. - Weaker land sales in 3Q added downward pressure on FAI [4][5]. 5. **GCF Stability**: Although weak FAI in 3Q25 may signal a slowdown in GCF in 4Q25, fiscal expansion measures and a trade détente are expected to cushion the impact, potentially stabilizing GCF [5][10]. Additional Important Insights 1. **Policy Measures for 2026**: Incremental policy levers are anticipated, including front-loaded fiscal policies and housing market guardrails to support domestic demand [1][12][11]. 2. **Housing Market Risks**: The property market is under stress with record-high inventory and declining prices, raising concerns about the potential need for restructuring among developers [13][14]. 3. **Consumption Support**: There is a focus on service consumption support in 2026, with expectations for trade-in programs and other measures to stimulate demand [17][18]. 4. **Fiscal Constraints**: Public debt is at 113% of GDP, limiting the government's ability to shift focus towards consumption-driven growth [19]. Conclusion - The overall outlook suggests a slow-burn reflation scenario, with GDP expected to move out of deflation by 2026. Policy adjustments in infrastructure, housing, and consumption are likely to be reactive rather than proactive, providing a floor for growth [18][19].

Summary of Japan Equity Strategy Outlook Industry Overview - The report focuses on the Japanese equity market, specifically the TOPIX index, with a target of 3,600 points by December 2026, indicating a potential increase of nearly 10% from current levels [2][9][15]. Core Insights and Arguments 1. **Economic Growth and Inflation**: Japan is transitioning from a low-inflation environment to one where inflation is expected to approach 2%, leading to growth, wage increases, and improved pricing flexibility [4][12]. 2. **Corporate Governance Reforms**: Reforms by the Tokyo Stock Exchange and the Financial Services Agency are enhancing corporate governance, prompting companies to rethink balance-sheet management [4][13]. 3. **Investment Opportunities**: The report highlights sectors poised for growth, including Construction & Materials, Machinery, Electrical Equipment & Precision Instruments, IT Services, and Banks, while expressing caution towards Food, Pharmaceuticals, and Transportation sectors [9][40][46]. 4. **External Risks**: Significant uncertainty from external shocks is acknowledged, with a wide dispersion between bullish and bearish equity outlooks. Key risks include a potential US economic slowdown and sharp appreciation of the Japanese yen [5][9][35]. 5. **Fiscal Policy**: The Takaichi administration is expected to emphasize economic security and strategic investments in technologies essential for national security, such as AI and semiconductors [5][39]. Important but Overlooked Content 1. **Earnings Projections**: EPS growth for TOPIX constituents is projected at +16% for 2026, with a further +9% increase in 2027, indicating robust corporate earnings momentum [19]. 2. **Valuation Metrics**: The report outlines a forward P/E ratio of 15.0x for the base case, with a potential range from 12.2x in a bear case to 17.0x in a bull case, reflecting a significant range of market expectations [14][19]. 3. **Sector-Specific Insights**: - **Cyclical Sectors**: The report recommends focusing on cyclical sectors that can withstand US economic uncertainties, particularly those backed by government investment [39][40]. - **Underperforming Sectors**: Structural headwinds in Food, Pharmaceuticals, and Transportation sectors are highlighted, with expectations of underperformance during economic expansions [46]. Conclusion - The overall outlook for Japanese equities remains positive, with a strong emphasis on building resilient portfolios to navigate potential external shocks. The anticipated fiscal policies and corporate governance reforms are expected to drive long-term growth and profitability in the Japanese market [5][15][19].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: A-Shares Market in China - **Date**: November 13, 2025 Core Insights 1. **Market Sentiment**: A-share investor sentiment remained flat, with the weighted MSASI increasing by 1% to 60% and the weighted MSASI 1MMA decreasing by 3% to 68% compared to the previous cycle [2][2] 2. **Turnover Trends**: Average daily turnover for ChiNext, A-shares, and Equity Futures decreased by 7% (to RMB 508 billion), 4% (to RMB 2,035 billion), and 16% (to RMB 371 billion), respectively [2][2] 3. **CPI and PPI Analysis**: Recent CPI and PPI highs have led to reflation optimism, but these are largely attributed to one-off factors. October core CPI YoY rose to 1.2%, the highest in nearly four years, while PPI YoY deflation narrowed for the third consecutive month [4][4] 4. **Earnings Growth Outlook**: Current momentum is expected to hold rather than break into new highs, with moderate earnings growth and limited valuation upside anticipated [1][13] 5. **Deflationary Pressures**: Domestic deflation is expected to persist, with fiscal stimulus likely to remain modest due to high public debt. The China economics team predicts deflation may continue at least through 2026 [14][14] Important Metrics 1. **Net Inflows**: Southbound trading recorded net inflows of USD 3.1 billion from November 6 to November 12, with year-to-date and month-to-date net inflows reaching USD 161 billion and USD 6.4 billion, respectively [3][3] 2. **Credit Data**: Credit data indicates a restored household risk appetite towards equities, although the negative wealth effect from housing still outweighs equity gains. October credit fell 20 basis points YoY to 8.7% [12][12] 3. **Earnings Stability**: 3Q25 MSCI China results showed slight quarter-on-quarter deterioration in earnings surprises, adding uncertainty to the stabilization trend [13][13] Additional Insights 1. **Investor Sentiment Metrics**: The new MSASI is based on 12 individual indicators capturing different dimensions of investor sentiment and market activity, normalized using a 100-day moving min-max method [15][15] 2. **Normalization Process**: The normalization process ensures that each indicator contributes proportionally, highlighting directional shifts in sentiment over time [23][23] 3. **Weighting of Indicators**: Each of the 12 series is assigned a weight based on its historical explanatory power relative to the CSI 300 Index, ensuring the overall index reflects sentiment components most relevant to A-share performance [24][24] Conclusion - The A-share market sentiment remains flat with moderate earnings growth expected. Key factors such as domestic deflation, credit trends, and investor sentiment metrics will be crucial in shaping the market outlook moving forward.

Summary of Key Points from the Conference Call Industry Overview - The discussion centers around the **Chinese economy**, specifically focusing on inflation metrics such as **CPI (Consumer Price Index)** and **PPI (Producer Price Index)**, and the potential for reflation in the coming years [1][2][3]. Core Insights and Arguments 1. **CPI and PPI Trends**: - Recent CPI has shown a year-over-year increase of **1.2%**, the highest in nearly four years, while PPI deflation has narrowed for three consecutive months [2][3]. - However, the increase in CPI is largely attributed to temporary factors, indicating that reflation is not yet underway [2][4]. 2. **Temporary Factors Influencing CPI**: - The October CPI increase was driven by short-lived factors such as the "super Golden Week," a favorable base effect, and rising gold prices [4][16]. - The PPI increase was influenced by non-ferrous metals, particularly copper, and a surge in demand for daily sundry items due to early shopping events [4][16]. 3. **Weak Domestic Demand**: - Despite some positive indicators, final demand remains weak, primarily due to a downturn in the housing market and stagnant wage growth [2][6]. - The consumer goods trade-in program, which previously supported core CPI, is losing effectiveness, with participation rates dropping significantly [5][8]. 4. **Deflationary Pressures**: - The ongoing housing market adjustment continues to negatively impact household sentiment, contributing to a deflationary loop that suppresses wage growth [6][10]. - The overall policy framework remains focused on technology and supply, with limited immediate relief for domestic demand [2][21]. 5. **Future Outlook**: - The expectation is for a gradual reflation process from **2026 to 2027**, with the GDP deflator likely remaining negative in **2026** before turning slightly positive in **2027** [2][21]. - Successful reflation is contingent upon economic rebalancing and a shift towards a more balanced growth model, which may take time to implement [21][22]. Additional Important Insights - **CPI Measurement Limitations**: - The CPI may not fully capture underlying price dynamics due to its inclusion of non-market-based components, such as imputed rents for owner-occupied housing [13][16]. - The relatively low weight of housing rent in China's CPI (approximately **5%**) compared to other countries may understate the impact of housing market adjustments on inflation [16][19]. - **Gold Prices Impact**: - The recent surge in gold prices has inflated CPI figures but does not indicate domestic reflation, as the increase is driven by global demand rather than local consumption [16][19]. This summary encapsulates the key points discussed in the conference call regarding the current state and future outlook of the Chinese economy, particularly in relation to inflation and reflation dynamics.

Summary of Key Points from the Conference Call Industry Overview - The discussion revolves around the macroeconomic environment and monetary policy, particularly focusing on the Federal Reserve (Fed), European Central Bank (ECB), Bank of Canada (BoC), Bank of Japan (BoJ), and Bank of England (BoE) [1][2][3]. Core Insights and Arguments 1. **Market Sentiment Shift**: Over the past two months, markets have transitioned from a 'central bank put' to a more reflationary outlook following the FOMC meeting, with expectations of monetary policy adjustments influencing market dynamics [1][2]. 2. **Fed Rate Cuts**: There is a high probability (1 to 4 cuts) assigned by markets for additional Fed cuts over the next 12 months, with a notable increase in this probability since September [2][19]. 3. **ECB and Other Central Banks**: The ECB is expected to maintain its current policy stance, while the BoC has already cut rates by 25 basis points. The BoJ is anticipated to raise rates in January, and the BoE is expected to cut rates by 25 basis points soon [3][4]. 4. **Asset Performance**: Many asset classes have benefited from the dovish repricing of monetary policy, particularly developed and emerging market fixed income, credit excess returns, and small-cap equities [4][5]. 5. **Volatility and Risk Management**: A modest pro-risk stance is maintained in asset allocation, with a focus on using cross-asset volatility resets to add hedges as year-end approaches [5][8]. Additional Important Insights 1. **Bond Yield Expectations**: The base case anticipates only modest increases in bond yields, with the US yields expected to consolidate at the lower end of the year-to-date range until visibility improves post-government shutdown [8]. 2. **UK Budget Impact**: The upcoming UK budget is expected to lower 10-year Gilt yields, with forecasts adjusted to 4.0% for year-end 2026 [3][20]. 3. **Global Economic Indicators**: Key indicators have turned weaker recently, influencing expectations for monetary policy adjustments across various central banks [3][4]. This summary encapsulates the essential points discussed in the conference call, highlighting the shifts in market sentiment, central bank policies, and asset performance trends.