Report Summary 1. Report Industry Investment Rating - Not provided in the given content. 2. Core View of the Report - Today, the stock indices closed higher overall, with a slight decline in the late trading session. The "Beijing Special Action Plan for Deepening Reforms to Boost Consumption" issued by the Beijing Municipal Government mentioned optimizing the new supply of housing consumption and relevant policies, which stimulated the real - estate sector to surge significantly after the afternoon opening and led the gains today. Besides the real - estate sector, the financial sector also performed strongly, with the stock prices of the four major banks hitting new historical highs, driving the relatively stronger performance of large - cap stocks. Overseas, there has been a new trade storm recently, as Trump threatened multiple countries with new tariff rates, but the market reaction was relatively desensitized, waiting for subsequent data verification. Although the trading volume of the two markets decreased slightly today, it still approached 1.5 trillion yuan, and there was no obvious change in market sentiment. Therefore, it is expected that the stock indices will continue to fluctuate slightly stronger in the short term [6]. 3. Summary by Relevant Catalogs Market Review - Today, the stock indices closed higher. For example, the CSI 300 index closed up 0.47%. In terms of capital flow, the trading volume of the two markets decreased by 11.028 billion yuan. All stock index futures increased in volume and price [4]. Important Information - President Trump posted letters to the leaders of eight countries regarding tariff increases on social media platforms. The new tariff rates will take effect on August 1st. - The Beijing Municipal Government issued the "Beijing Special Action Plan for Deepening Reforms to Boost Consumption". The overall requirement is to combine market and government forces, promote both supply and demand, support both enterprises and scenarios, and integrate international and domestic resources. By 2030, the city aims to achieve an average annual growth of about 5% in total market consumption, create 2 - 3 new consumption landmarks with a scale of 100 billion yuan integrating culture, business, tourism, and sports, and further enhance its radiation, resource allocation, and innovation - leading capabilities in the global consumption market, making new breakthroughs in building an international consumption center city [5]. Strategy Recommendation - Hold long positions and wait and see [7]. Futures Market Observation | | IF | IH | IC | IM | | --- | --- | --- | --- | --- | | Main contract intraday change (%) | 0.38 | 0.49 | 0.36 | 0.19 | | Trading volume (10,000 lots) | 9.7027 | 5.6248 | 7.3407 | 16.8165 | | Trading volume change (10,000 lots) | 1.4938 | 1.3869 | 0.2623 | 0.5777 | | Open interest (10,000 lots) | 25.802 | 9.5486 | 22.7469 | 33.3057 | | Open interest change (10,000 lots) | 1.1835 | 0.9632 | 0.5291 | 1.1313 | [7][8] Spot Market Observation | Name | Value | | --- | --- | | Shanghai Composite Index change (%) | 0.48 | | Shenzhen Component Index change (%) | 0.47 | | Ratio of rising to falling stocks | 1.29 | | Trading volume of the two markets (billion yuan) | 1494.148 | | Trading volume change (billion yuan) | - 11.028 | [8]

Core Viewpoint - The A-share market experienced fluctuations, with the charging pile sector receiving positive news, leading to significant stock price increases in related companies [1][13][14]. Market Overview - The Shanghai Composite Index closed up 0.02%, while the Shenzhen Component Index fell by 0.7%, and the ChiNext Index dropped by 1.21% [1]. - A total of 3,255 stocks rose, with 76 hitting the daily limit, while 1,978 stocks declined [2][3]. Charging Pile Sector - The charging pile concept stocks saw a surge, with companies like Aotexun hitting the daily limit [13]. - The National Development and Reform Commission issued a notice promoting the scientific planning and construction of high-power charging facilities, aiming for over 100,000 such facilities nationwide by the end of 2027 [14][15]. - The notice emphasizes the integration of charging networks with existing infrastructure and encourages the development of intelligent charging stations [16][17]. Electric Power Sector - Electric power stocks surged, with companies like Shao Neng Co. and Huayin Electric hitting the daily limit due to increased electricity demand from high temperatures [4][5]. - The notice on charging facilities is expected to further boost the electric power sector as it aligns with the growing demand for electric vehicle charging [14][15]. Other Sectors - The cross-border payment and stablecoin concept stocks also showed volatility, with several companies experiencing significant price increases [6][7]. - Real estate stocks saw a rise following a directive from the Ministry of Housing and Urban-Rural Development to stabilize the market and enhance housing supply [8]. Conclusion - The charging pile sector is positioned for growth due to government support and increasing demand for electric vehicle infrastructure, while the electric power sector benefits from rising electricity consumption [14][15][4].

Group 1 - The core viewpoint emphasizes the importance of building a unified national market to enhance economic resilience and promote effective market and government collaboration [1][2] - Recommendations include strengthening fair competition reviews, addressing barriers to economic circulation, and enhancing regulatory frameworks to support market integration [1] - The establishment of a long-term mechanism for private enterprises to participate in national technology initiatives is suggested, focusing on improving the development environment for private companies [3][4] Group 2 - The need for a unified technology transfer system and a platform for rapid matching of innovation results with market demands is highlighted to enhance the conversion of scientific achievements [5][6] - Investment in human capital is proposed as a strategy to drive high-quality development, linking improvements in living standards with economic growth [7] - Recommendations for optimizing the fiscal relationship between central and local governments to ensure balanced regional development and effective public service delivery are presented [8][9] Group 3 - The financial system's role in supporting private enterprises and technological innovation is emphasized, with suggestions for improving financial support mechanisms [10] - A multi-faceted investment growth mechanism is proposed to foster future industries, focusing on government guidance and innovative financing models [11][12] - The importance of addressing challenges in the AI industry, particularly in data sharing and computational power, is discussed to promote innovation [13][14] Group 4 - Recommendations for enhancing agricultural technology promotion through systemic reforms and innovative service models are outlined to support agricultural development [15][16] - The role of county-level cities in urban-rural integration is emphasized, with suggestions for improving infrastructure and public services [17][18] - Strategies for promoting high-quality employment for college graduates, including enhancing cooperation between educational institutions and industries, are proposed [19] Group 5 - The need for a new model of real estate development is highlighted, focusing on meeting the housing needs of new citizens and young people while ensuring market stability [20] - Suggestions for enhancing investment quality and efficiency in the Belt and Road Initiative are presented, emphasizing financial coordination and risk management [21][22] - The importance of stabilizing and improving the quality of foreign investment and trade is discussed, with a focus on attracting high-end service industries and supporting domestic enterprises in international markets [23]

Economic Performance - In May, the industrial added value of large-scale enterprises increased by 5.8% year-on-year, while the total retail sales of consumer goods reached 41,326 billion yuan, growing by 6.4% year-on-year [1] - The total import and export value of goods was 38,098 billion yuan, with a year-on-year increase of 2.7% [1] Trade and Export Dynamics - The diversification strategy of China's export markets has shown effectiveness against the backdrop of trade frictions, with private enterprises expected to continue leading as the largest foreign trade entity [1][9] - In May, high-end manufacturing exports, including electromechanical products and integrated circuits, grew significantly by 7.4%, with private enterprises accounting for 57.1% of total foreign trade, marking a record high [9][10] Consumer Market Recovery - The retail sales growth in May reached 6.4%, the highest since 2024, driven by government subsidies, the early promotion of the "618" shopping festival, and holiday effects [3] - The "old for new" policy for consumer goods has positively impacted sales, particularly in home appliances and communication equipment, with significant year-on-year growth rates [3] Real Estate Market Trends - The real estate market is still in an adjustment phase, with ongoing efforts to stabilize and restore market confidence [2][6] - New housing prices in major cities have seen a narrowing of year-on-year declines, indicating a potential stabilization in the market [6][7] Policy Recommendations - It is suggested to enhance support for private enterprises in technology innovation and brand building, shifting foreign trade development from "price competition" to "quality competition" [1][10] - The government is encouraged to implement localized standards for "good housing" to improve residential quality and adapt to regional differences [8]

Group 1: Economic Demand and Investment - In May, the retail sales of consumer goods increased by 6.4% year-on-year, up 1.3 percentage points from the previous month (5.1%) [26] - Fixed asset investment showed a month-on-month increase of 0.3% in May, recovering from a previous decline of 0.8% [53] - Infrastructure investment rebounded with a month-on-month growth of 0.9%, while manufacturing investment accelerated with a month-on-month increase of 1.9% [60] Group 2: Industrial Production and Employment - The industrial added value in May increased by 0.4% month-on-month, recovering from a previous decline of 0.2% [66] - The urban survey unemployment rate decreased to 5.0% in May, down 0.1 percentage points from the previous month (5.1%) [81] - The unemployment rate in 31 major cities also fell to 5.0%, indicating a marginal improvement in employment conditions [83] Group 3: Future Economic Outlook - The temporary suspension of certain tariffs by the Trump administration is expected to alleviate external demand pressure, allowing for a better internal demand recovery [88] - The GDP growth forecast for the year is maintained at 5.0%, despite anticipated pressure on exports in the second half of the year [88] - Risks include potential delays in policy implementation and unexpected geopolitical events that could impact export performance [89]

Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - This week, domestic commodities continued to rebound, with most industrial products rising and agricultural products soaring. The main reasons were the large - scale conflict between Israel and Iran, the improvement of the Sino - US framework agreement, the resilience of the Chinese economy, and the lower - than - expected US inflation boosting the interest - rate cut expectation, which improved market risk appetite [3]. - Multiple factors may cause the commodity market to continue to rebound in the short term, including the Sino - US framework agreement, the improvement of the US economic outlook and the decline of inflation expectations, and the deterioration of the Middle - East situation [3]. 3. Summary of Each Section Overseas Situation Analysis - **Sino - US London Consultation Reached a Principle Agreement**: From June 9 - 10, the first meeting of the Sino - US economic and trade consultation mechanism was held in London. The two sides reached a principle agreement on implementing the consensus of the heads - of - state call and consolidating the results of the Geneva economic and trade talks. China's exports may still have a window period for "rush exports" before July, but the export growth rate may decline in the second half of the year [6][7]. - **US: May CPI Lower than Market Expectations**: In May, the overall CPI in the US rose 2.4% year - on - year and 0.1% month - on - month; the core CPI was flat at 2.8% year - on - year and rose only 0.1% month - on - month, for the fourth consecutive month lower than expected. After the data was released, the probability of the Fed cutting interest rates before September jumped to 75%, and the annual interest - rate cut expectation remained at about 45 basis points. It is believed that the probability of a soft landing of the US economy in recent years is still large, and the Fed may cut interest rates in the fourth quarter [10]. - **US: Confidence Index Rebounded and Inflation Expectation Declined**: In June, the preliminary value of the University of Michigan consumer confidence index was 60.5, a month - on - month increase of 15.9%. The 1 - year inflation expectation dropped to 5.1% from 6.6%, and the 5 - year inflation expectation slightly decreased to 4.1% from 4.2%. The suspension of tariffs and the decline of inflation expectations drove the confidence to rebound, but there are still concerns in the future [13]. - **Middle - East Situation Escalated**: On the early morning of June 13, Israel launched an attack on Iran. Iran launched a series of retaliatory actions. The global economy was shaken, with the Brent crude oil price soaring 8% to $94 per barrel, the global stock markets falling generally, and the gold price breaking through $3400 per ounce [16]. Domestic Situation Analysis - **Financial Data: Mixed Results**: In June, the new social financing was 228.94 billion yuan, with a growth rate of 8.7%. The new RMB loans were 620 billion yuan, with a growth rate of 7.1%. M2 increased 7.9% year - on - year, and M1 increased 2.3%. Overall, the government sector was still the main force of entity - sector financing. The central bank's actions to guide monetary easing and the expectation of restarting treasury bond trading may bring a favorable environment to the capital market [21]. - **Foreign Trade Data Interpretation: Exports Maintained Short - term Resilience**: In May, exports increased 4.8% year - on - year, and imports decreased 3.4% year - on - year. The decline in exports was affected by the weakening of "rush exports" and the high base, and the decline in imports was dragged down by the decline in commodity imports. In the short term, exports are expected to maintain a certain resilience, but there will be pressure in the second half of the year [24]. - **Policy Tracking**: The release of the "Opinions on Further Ensuring and Improving People's Livelihood" may bring development opportunities to multiple fields such as consumption and elderly care. The acceleration of the "one - old - and - one - young" policy may bring development opportunities to multiple industries, including the maternal and infant consumption, elderly care service, and related equipment industries [25]. High - Frequency Data Tracking - **Production End: Industrial Production was Generally Stable**: In the chemical industry, the production load remained stable, and product prices declined. In the steel industry, production declined slightly, and demand slowed down [34]. - **Demand End: Real - Estate Sales Increased Week - on - Week and Passenger - Car Retail Sales Increased Year - on - Year**: As of June 12, the commercial housing transaction area of 30 large and medium - sized cities increased 43.96% week - on - week. In the first week of June, the average daily retail sales of the national passenger - car market were 43,000 units, a year - on - year increase of 19% [41]. - **Price Trends**: As of June 13, most food prices fell this week. The average vegetable price decreased 0.05% month - on - month, the average pork price decreased 1.48% month - on - month, the agricultural product wholesale price 200 index decreased 0.25% month - on - month, and the fruit price decreased 2.01% month - on - month [42].

Investment Rating - The report suggests maintaining an overweight position in gold, increasing allocation to Chinese stocks, shifting from aggressive to defensive in US stocks, underweighting global commodities, and maintaining a standard allocation in domestic and foreign bonds to achieve good returns [1]. Core Viewpoints - The US tariff policy is the main contradiction affecting global asset performance in the first half of 2025, with significant impacts on market sentiment and asset allocation strategies [2]. - The report highlights the potential for a "super cycle" in certain commodities driven by green transformation, although short-term economic cycles may have a more significant impact on commodity prices [6]. - The AI revolution is seen as a major opportunity for stock assets, particularly in the context of China's market, which is expected to benefit from the application of AI technologies [4]. Summary by Sections Tariff Outlook - The unexpected impact of US tariffs since April has led to a shift towards a risk-averse market environment, with tariffs remaining a significant factor influencing global trade and economic conditions [2]. - The report notes that the average effective tariff rate in the US is close to 16%, significantly higher than the 2.4% level at the end of 2024, indicating potential negative effects on global trade [2]. Dollar Cycle - The report indicates that the long-term dollar bull market may be coming to an end, with expectations of a decline in the dollar's value impacting the attractiveness of dollar-denominated assets [3]. - It predicts that the US fiscal deficit may continue to shrink in 2025, potentially leading to a lack of support for economic growth [3]. Technology Cycle - The emergence of AI is expected to drive a new wave of technological revolution, with significant implications for stock market performance, particularly in the US and China [4]. - The report emphasizes that Chinese stocks have not fully priced in the potential of AI, suggesting a valuation advantage [4]. Real Estate Cycle - The report discusses the stabilization of the real estate market in China post-September 2024, although it notes that the market has not yet completed its downward cycle [7]. - It highlights the relationship between credit cycles and real estate cycles, suggesting that stock markets may respond positively during periods of deleveraging [7]. Asset Allocation Insights - The report recommends an asset allocation strategy that favors gold, high-dividend bonds, and Chinese technology stocks while being cautious with US stocks and commodities [8]. - It suggests that the uncertainty surrounding US fiscal policy and inflation could lead to opportunities in US Treasuries, although the overall outlook remains cautious [8].

Core Viewpoint - The article highlights a significant shift in global asset allocation, with a notable inflow into European equities and bonds, while Chinese equities are experiencing outflows, indicating a "seesaw" effect in the market dynamics [1][3][41]. Market Review - The successful outcome of the China-US-Switzerland talks on May 12 has significantly boosted global risk appetite, leading to an increase in global stock indices [10][41]. - The 20-year US Treasury auction on May 22 was poorly received, with the final yield surpassing 5%, raising concerns about US fiscal pressure [1][10]. Global Asset Performance - In May, equity assets generally rose, while US Treasury yields increased and the dollar weakened. The 10-year US Treasury yield rose by 24 basis points [2][13]. - Gold prices increased by 2.1%, and Brent crude oil rose by 1.7% during the same period [2][13]. Global Fund Flows - In May, there was a significant inflow of $215 billion into global money market funds, with developed market equities receiving $305 billion, while emerging market equities saw an outflow of $83 billion [3][20]. - Developed European fixed income and equity funds attracted inflows of $190 billion and $247 billion, respectively, indicating stronger performance compared to the US [3][20]. China Market Dynamics - By the end of May, global equity funds experienced an outflow of $88.5 billion from China, a reversal from the inflow of $198.3 billion in April [4][41]. - The outflow was primarily driven by passive ETFs, which saw a withdrawal of $82.5 billion in May compared to an inflow of $203.9 billion in April [4][41]. - In terms of sector performance, there was a significant inflow into technology, real estate, and materials, while telecommunications, consumer staples, and healthcare saw outflows [4][41]. Country Allocation - Global market funds reduced their allocation to US equities by 1.0 percentage points in April, while increasing allocations to European equities [5][41]. - The allocation to China remains stable at 26.4%, indicating potential for further growth [5][41]. Emerging Markets - Emerging market funds saw a decrease in allocation to Chinese equities, with a drop of 1.6 percentage points compared to March, while the allocation to Indian equities also decreased [5][41]. - In May, emerging market equity funds experienced a net outflow of $45 billion, with China being the primary contributor to this outflow [43][46].

Core Viewpoint - The expected GDP growth rate for the second quarter is around 4.8%, influenced by factors such as export fluctuations, the diminishing impact of trade-in policies on consumption, and ongoing adjustments in the real estate sector [1][2]. Economic Analysis - The economic situation in China is projected to remain relatively stable in the short term, primarily due to a backlog of export orders and the positive effects of trade-in policies on retail [2]. - Export growth is expected to maintain a high level in May and June, potentially close to April's 8% growth rate, but challenges may arise in the second half of the year [2]. - The increase in tariffs on Chinese goods by the U.S. has significantly impacted exports, particularly with a 54% tariff on small packages, which may lead to a substantial decline in exports after the initial surge [3]. - The positive effects of trade-in policies for durable goods are expected to wane, with potential negative impacts on consumer demand in the latter half of the year [3][4]. - The real estate sector is experiencing a prolonged downturn, with a 10% annual decline and a 22% drop in new housing starts, complicating efforts to stabilize domestic demand [4]. Policy Recommendations - Maintaining the stability of the RMB exchange rate is crucial for economic stability, especially given the current challenges in the real estate market and capital outflow concerns [5][6]. - Accelerating fiscal spending and exploring additional stimulus measures are necessary to stabilize the economy in the second half of the year [6]. - The stability of the real estate market is critical, requiring measures such as interest rate cuts and debt resolution for developers to prevent further economic decline [7]. - Structural reforms in the social security system are needed to enhance consumer spending, particularly by increasing pension levels for rural elderly populations [8]. - Fiscal reform is essential to improve local government finances and create independent revenue sources beyond real estate, which is vital for enhancing the business environment [9].

Core Viewpoint - The increase of tariffs on imported steel and aluminum from 25% to 50% is expected to significantly raise costs for various industries in the U.S., leading to higher prices for consumers and potential job losses in sectors reliant on these materials [4][10][25]. Group 1: Impact on Industries - The steel cable industry, represented by companies like Walz's, faces severe challenges due to increased raw material costs and competition from foreign products [1]. - The manufacturing sector, particularly metal manufacturing, is projected to incur an additional cost of $22.4 billion for imported steel and aluminum, with derivative product costs rising by $29 billion [7]. - The construction industry anticipates an increase in average new home costs by over $10,000 due to the tariffs, exacerbating existing pressures from high housing prices and mortgage rates [16][18]. Group 2: Consumer Impact - The tariffs are expected to raise prices across a wide range of consumer goods, including automobiles, household appliances, and canned foods, disproportionately affecting low-income households [10][14]. - The cost of essential items, such as canned foods and housing, is likely to rise significantly, impacting affordability for ordinary families [14][16]. Group 3: Employment Effects - The tariffs may lead to a net loss of jobs, with estimates suggesting that while the steel industry could gain around 1,000 jobs, other sectors like manufacturing and construction could lose approximately 75,000 jobs [25][29]. - The overall economic outlook is pessimistic, with recent data showing a slowdown in job creation, indicating that the tariffs may be counterproductive to the goal of protecting American jobs [22][25].