Core Viewpoint - Moelis & Company reported better-than-expected first-quarter 2025 results, with adjusted earnings of 64 cents per share, surpassing the Zacks Consensus Estimate of 57 cents, and significantly improving from 22 cents per share in the prior-year quarter [1][2] Financial Performance - Net income on a GAAP basis was $50.3 million, compared to $16.6 million in the prior-year quarter [2] - Total revenues on a GAAP basis grew 41% year over year to $306.6 million, driven by increases in M&A and capital markets revenues, exceeding the Zacks Consensus Estimate of $289.8 million [3] - Total operating expenses on a GAAP basis rose 27.4% to $269.9 million, attributed to increases in compensation and benefits costs as well as non-compensation expenses, with estimates for total operating expenses at $252.9 million [3] Other Income and Liquidity - Other income on a GAAP basis was $6.1 million, up 45.2%, surpassing projections of $5.5 million [4] - As of March 31, 2025, the company held cash and liquid investments of $336.3 million, with no debt or goodwill [4] Strategic Outlook - The company's hiring spree and rising revenue-related compensation may negatively impact bottom-line growth, alongside concerns regarding a delayed rebound in global deal-making [5] - However, global expansion initiatives and diverse operations across various sectors are seen as positive factors for future growth [5] Peer Performance - Morgan Stanley reported first-quarter 2025 earnings of $2.60 per share, exceeding the Zacks Consensus Estimate of $2.23, with a 28.7% increase from the prior-year quarter [6] - Goldman Sachs achieved first-quarter 2025 adjusted earnings per share of $14.12, surpassing the Zacks Consensus Estimate of $12.71, and showing growth from $11.58 in the year-ago quarter [7]

Core Insights - The decline in AES's share price was perceived as excessive considering the fundamental value of the business [1] - The share price experienced volatility, reaching a peak of $13.23 in January before dropping again [1] Company Analysis - The analyst emphasizes a strategy of seeking companies that provide both growth and value, indicating a preference for undervalued firms with strong growth potential [1] - The analyst has extensive experience in the financial sector, having worked for 15 years in various roles related to analysis and risk management [1] Investment Philosophy - The belief is that the best investments are those that are undervalued yet possess significant growth prospects [1] - The analyst's approach is independent, focusing on personal analysis rather than following market trends without critical evaluation [1]

Investment Rating - The report does not explicitly provide an investment rating for the industry or economies discussed Core Insights - Shifting away from China for Asia ex China (AXC) economies to avoid US tariffs is deemed nearly impossible due to China's integral role as a key market, critical supplier, and significant source of FDI inflows [1][5][13] - Implementing trade restrictions on China would likely lead to reciprocal measures from China, resulting in significant negative impacts on trade, capital expenditure, and growth outlook for AXC economies [5][8][13] Summary by Sections Trade Relations and Economic Impact - The US may seek to have AXC economies limit their economic involvement with China, but the report argues that such restrictions are impractical given China's central role in the region's production network [5][8] - China is a major source of end demand, critical inputs, and FDI, especially for ASEAN economies, making any trade restrictions potentially damaging [5][10][12] Economies at Risk - Economies like Vietnam, Thailand, and India, which have trade surpluses with the US and deficits with China, may be pressured to impose tariffs on China, but the report suggests they would struggle to do so [8][10] - Japan, Korea, and Taiwan, which also have significant trade surpluses with the US, run trade surpluses with China, making tariffs on Chinese imports unlikely [8][10] Trade Dynamics - Exports to the US account for 17.5% of AXC economies' total exports, while exports to China account for 16.6%, highlighting the importance of both markets [10][24] - China accounts for 41% of global value chain-related output in manufacturing, emphasizing its critical role in the region's supply chains [12][21] Potential Measures and Challenges - The report evaluates three potential measures the US could ask AXC economies to adopt: stricter rules of origin, tariffs on China, and limiting investment from China, all of which present significant challenges [15][16] - Imposing tariffs on Chinese imports could lead to inflationary pressures and disruptions in domestic manufacturing sectors, with potential retaliatory actions from China [18][31] Investment Flows - China's FDI inflows account for 11% of total FDI in ASEAN economies, with significant reliance on Chinese investments, particularly in Singapore, which acts as a conduit for FDI into ASEAN [37][39] - Other Asian economies like Japan, Korea, and Taiwan have lower reliance on Chinese FDI, which has been declining, thus limiting exposure to retaliatory measures [38][39] Transshipment and Domestic Production - The report notes limited evidence of transshipment activities in Vietnam, Thailand, and India, suggesting that their trade deficits with China reflect reliance on Chinese inputs for domestic production rather than trade rerouting [51][52]

Financial Data and Key Metrics Changes - The company achieved revenues of $307 million in Q1 2025, representing a 41% increase compared to the prior year period, driven by growth in M&A and capital markets [6] - The first quarter compensation expense ratio was 69%, with a non-compensation ratio of 19% [6][7] - The underlying corporate tax rate for the quarter was 29.5%, with a net tax benefit due to a discrete tax benefit related to equity awards [8][9] - The board declared a regular quarterly dividend of $0.65 per share, maintaining a strong balance sheet with no funded debt [9] Business Line Data and Key Metrics Changes - The revenue split for the quarter was approximately two-thirds from M&A and one-third from capital markets and restructuring [61] - The company reported record new business origination and a robust pipeline, although some transactions have been delayed due to market volatility [10][11] Market Data and Key Metrics Changes - Post-April 2nd, a new wave of volatility in capital markets has slowed M&A transaction activity, but the company believes this is a temporary phenomenon [11] - The backlog decreased from $331 million due to some transactions being shelved, with the majority being delayed rather than canceled [21][22] Company Strategy and Development Direction - The company continues to invest in the growth of its private funds advisory business, aiming to be a market leader in private capital solutions [12][13] - The focus remains on adding talent in strategic areas, including technology and business services, to enhance service offerings [13][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, stating that clients will continue to need strategic advice despite current market volatility [11] - The company is actively hiring in private capital advisory, indicating confidence in future M&A activity once the policy situation stabilizes [52][88] Other Important Information - The company has not seen a dramatic change in the recruiting environment despite recent market volatility, and it expects to benefit from talent leaving heavily leveraged institutions [66][69] - The tech team has been performing exceptionally well, contributing significantly to revenue and enhancing the company's overall impact in the sponsor world [102][106] Q&A Session Summary Question: How does the backlog move from here and what could potentially cancel them? - Management indicated that the majority of the backlog is on delay due to market conditions, with some transactions shelved [21][22] Question: What is the tone shift in the restructuring business? - The restructuring business was flat in Q1, with increased conversations about financing options rather than immediate restructuring mandates [25][27] Question: How does volatility impact different geographic markets? - The US is seen as dynamic, while Europe has been less affected by recent volatility, with indications of potential positive actions in the European economy [36][37] Question: What is the expected trajectory for restructuring in a weaker economic scenario? - Management believes that liability management will be a significant focus, with less emphasis on traditional restructuring compared to previous downturns [56][58] Question: What is the split of revenue across M&A, capital markets, and restructuring? - The revenue split is about two-thirds from M&A and one-third from capital markets and restructuring combined [61] Question: How is the recruiting environment and talent retention being managed? - The company plans to aggressively pursue talent in private capital advisory and believes it will benefit from talent leaving leveraged institutions [66][69] Question: What is the impact of the accelerated vesting of retirement-eligible bankers on comp expense? - The first quarter saw a higher fixed comp ratio due to the accelerated vesting, approximately double the expense of a normal quarter [108]

Investment Rating - The report suggests a defensive and diversified stance is warranted in equities and credit due to high recession risks [1][7][11]. Core Insights - The US economy is at risk of tipping into recession, with a 45% chance over the next 12 months, despite a brief pause in reciprocal tariffs [1][7]. - Markets are underpricing recession risks, with asset values not reflecting the likelihood of a full-blown recession [9][11]. - The recent tariff announcements and ongoing trade tensions have created significant uncertainty, impacting consumer and business confidence [1][7][9]. Summary by Sections Economic Outlook - The April 9 pause in tariffs provided temporary relief but did not eliminate recession risks, as financial conditions remain tighter than before [1][7]. - The report highlights that substantial tariffs are still in place, complicating the economic outlook and increasing the likelihood of reduced consumer spending and business investment [7][9]. Market Dynamics - Markets have reacted to tariff announcements by downgrading US growth expectations, but most assets have not fully priced in a recession [9][11]. - The report indicates that the S&P 500 could trade around 4600 in a recession scenario, with high-yield credit spreads exceeding 600 basis points [11]. Federal Reserve Considerations - The Fed faces dilemmas due to the conflicting pressures of growth risks and rising inflation expectations, complicating its policy decisions [18][21]. - The report anticipates that a significant increase in unemployment could prompt the Fed to cut rates by up to 200 basis points in a recession, which is more than currently priced in by the market [18][21]. Currency and Global Implications - The report discusses a potential decline in the US Dollar due to tariffs and trade tensions, which may lead to a structural shift in currency allocations [22][26]. - It notes that the trade war is likely to negatively impact global growth, particularly for countries with large trade surpluses, while allowing for easier policy adjustments in other economies [28][30]. Investment Strategies - The report suggests that traditional hedges have become less effective, and investors should consider diversifying their portfolios to mitigate risks associated with US assets [35][38]. - Positioning for further USD weakness against G10 currencies is recommended as a strategy to hedge against potential reallocations away from US assets [35][38].

Investment Rating - The report expects US GDP growth to slow from 2.5% last year to just 0.5% this year on a Q4/Q4 basis [2][5]. Core Insights - The slowdown is largely attributed to higher tariffs, tighter financial conditions, and increased policy uncertainty [2][5]. - Initial jobless claims, the Philly Fed manufacturing index, and ISM services indices are identified as timely indicators of slower growth [2][12]. - Consumer spending is anticipated to decline as disposable income is affected by rising consumer prices due to tariffs [29][37]. - Capital expenditure (capex) growth is expected to be depressed, with a peak drag anticipated in the second half of 2025 [42][44]. - The labor market is showing initial signs of weakness, with jobless claims being a key indicator [49][54]. Summary by Sections Economic Growth - US GDP growth is projected to decrease significantly, reflecting the impact of tariffs and financial conditions [2][5]. - Historical data suggests that hard economic indicators typically show signs of weakness about four months after a growth slowdown begins [20][62]. Consumer Spending - Higher tariffs are expected to raise consumer prices, leading to a slowdown in consumer spending as disposable income declines [29][37]. - Core retail sales are highlighted as a reliable indicator of consumer spending during growth slowdowns [37][38]. Capital Expenditure - Tighter financial conditions and policy uncertainty are likely to negatively impact capex growth, with a significant drag expected in 2025 [42][44]. - Historical analysis indicates that soft data on capex tends to deteriorate before hard data, which may take longer to reflect the slowdown [46][48]. Labor Market - Initial jobless claims are considered a timely indicator of economic slowdown, with expectations of increased claims as the economic outlook worsens [49][54]. - The report notes that while layoffs remain low, hiring in sectors like healthcare and education may slow down significantly [41][54].

Investment Rating - The report does not explicitly provide an investment rating for the industry [4]. Core Insights - Market function measures have deteriorated recently, reflecting weaker risk sentiment, although they are better than the peak stress observed a few weeks ago [1][6]. - Credit and rates market functions have shown modest improvement but have not returned to normal levels [1]. - Funding conditions remain largely unchanged, while liquidity conditions in equities have improved for large-cap stocks but remain challenging for small-cap stocks [1]. Summary by Sections Summary of Market Function Measures - Stress indicators are normalized by market segment and averaged across categories, with indices represented as 3-day moving averages [6]. Temperature Check - The report includes a percentile ranking of various market indicators compared to the past 10 years, indicating current market conditions [9]. DM Credit Markets - Specific insights into the credit markets are provided, but detailed data is not included in the excerpts [11]. Rates Markets - The report discusses the rates markets, but specific findings are not detailed in the excerpts [16]. Equity Markets - Insights into equity markets are mentioned, but specific data points are not provided in the excerpts [21]. Emerging Markets - The report touches on emerging markets, but detailed insights are not included in the excerpts [26].

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 22, 2025.A key force at the center of the stock market's massive two-day rally is the frantic behavior of short sellers covering their losses.Hedge fund short sellers recently added more bearish wagers in both single stocks and securities tied to macro developments after the whipsaw early April triggered by President Donald Trump's tariff rollout and abrupt 90-day pause, according to Goldman Sachs' prime brokerage ...

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中金研究 中金公司研究部发布了2025年二季度图说中国，本产品汇集了中金公司研究部宏观、策略、量化及ESG、固收、大宗、外汇等各组对于当前中国经 济、市场和资产价格的最新观点和数据更新。近120页的图册提供了对于中国市场的一个全景式展示和介绍，这对于希望快速了解中国市场的投资者是 一个很好的总结和更新。 点击小程序查看报告原文 目求 | ● 中金研究团队介绍 p. 2 | | --- | | · 宏观经济 p. 3 | | ● 市场策略 p. 14 | | ● 量化及ESG p. 45 | | ● 固定收益 … p. 52 | | ● 大宗商品 ……………………………… p. 74 | | · 外汇研究 p. 94 | 注:除特别说明,本产品中所有价格数据均截至2025年4月21日 返回目塞 中金研究团队介绍 | 宏观经济 | 市场策略 | 量化及ESG | 固定收益 | 大宗商品 | | --- | --- | --- | --- | --- | | · 彭文生 | · 缪延亮 | · 刘均伟 | · 陈健恒 | · 郭朝辉 | | · 张文朗 | · 刘刚, CFA | · 周萧漬 | · 许艳 | · ...