Core Insights - The report highlights the increasing frequency of attacks in Tehran, Iran, indicating a persistent and unresolved conflict situation [4] - It notes significant political events in the U.S., including a planned budget proposal by Trump and large-scale protests against his administration [4] - The report discusses the EU's consideration of imposing a windfall tax on energy companies, reflecting ongoing economic policy debates [4] Economic Data - China's industrial enterprises saw a profit increase of 15.2% in January-February [4] - The report provides various market indices, including the Baltic Dry Index at 2031.00, down 0.84%, and the Nasdaq Index at 20948.36, down 2.15% [5] - The report lists the performance of key indices, with the Dow Jones Industrial Average at 45166.64, down 1.73%, and the S&P 500 at 6368.85, down 1.67% [5]

Group 1 - The macroeconomic perception has fluctuated significantly, indicating that if the conflict evolves into a protracted war, it will impact global energy, supply chains, inflation, asset pricing, and the reassessment of great power security premiums [2][5]. - The market's understanding of the US-Iran conflict has shifted from a quick resolution to a prolonged struggle, leading to broader macroeconomic implications [4]. - Recent trading has shown a "compensatory correction," with macroeconomic fluctuations outpacing changes in the war's status, highlighting concerns over supply chain disruptions and escalating military actions [4][5]. Group 2 - A prolonged conflict will not only be a geopolitical issue but will also significantly raise energy prices due to longer shipping times, higher premiums, reduced supply, and persistent security threats [5]. - Since February 28, crude oil prices have surged, with WTI increasing by approximately 47% and Brent by about 55%, reflecting normal feedback within traditional supply-demand frameworks [5]. - The bond market is experiencing a phase of "giving up on fantasies," with the 2-year US Treasury yields rising above the upper range of the federal funds rate, indicating market skepticism about the end of the Fed's rate hike cycle [5][8]. Group 3 - Central banks' hawkish stances have intensified tightening fears, with the Federal Reserve discussing potential rate hikes and adjusting inflation expectations upward [8]. - The European Central Bank and the Bank of England have adopted more aggressive positions, with the ECB raising its inflation forecast significantly, which has led to increased expectations for rate hikes [8]. - The dollar index has appreciated by about 1.9% since February 28, reflecting both safe-haven demand and tightening liquidity expectations [8]. Group 4 - Various asset classes have recently breached critical levels, indicating a tightening liquidity environment, with significant declines in commodities, bonds, and equities [9]. - The energy supply shortage is beginning to impact demand, with industrial supply and global flight operations facing notable pressures [11]. - Southeast Asian countries are proactively reducing production scales in response to supply chain disruptions, which may further strain global economic growth [12]. Group 5 - The surge in aviation fuel prices by 140% is directly affecting fuel surcharges, leading airlines to consider reducing flight schedules, which could significantly impact the third sector's economic activities [13]. - The US economy was already exhibiting stagflation-like conditions before the conflict, with inflation not returning to 2% in a non-recession environment and zero growth in employment despite nominal increases [13].

1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Views - FOMC resolution landed as expected, keeping the interest rate unchanged with reduced divergence. The Fed announced to maintain the federal funds rate, with a neutral tone in the resolution statement and uncertainty about the impact of the Middle - East situation on the US economy. Only one voting member opposed the resolution [3]. - The market reaction was mild within 15 minutes after the resolution release as the market had almost fully priced in the unchanged interest rate. The S&P 500 index fell 0.10%, 2 - year US Treasury yield declined 0.01 basis points to 3.703%, 10 - year US Treasury yield dropped 0.08 basis points to 4.214%, spot gold fell 0.08% to $4890.64 per ounce, and the US dollar index rose 0.14% to 99.86 [3][7]. - The dot - plot shows one rate cut in 2026 and 2027 respectively. Powell's speech was hawkish, emphasizing inflation expectations. The latest economic forecast significantly raised the economic growth rate and inflation expectations. The market priced in the hawkish remarks, with the S&P 500 falling 0.39%, 2 - year US Treasury yield dropping 5.1 basis points to 3.567%, 10 - year US Treasury yield rising 4.3 basis points to 4.257%, spot gold falling 0.67%, and the US dollar index rising 0.28% to 100.09 [3]. - The short - term US Treasury yield curve may show a bear - steepening trend, and the US dollar will maintain a relatively strong oscillation. The short - term Treasury interest rate will continue to reverse the previous rate - cut expectations, and the long - term Treasury interest rate will rise due to higher inflation and economic expectations. The 2 - year US Treasury interest rate may oscillate between 3.44% - 3.8%, and the 10 - year US Treasury interest rate may oscillate between 4% - 4.4%. The US dollar index is expected to oscillate strongly in the range of 97 - 101. Chinese bond interest rates are mainly determined by domestic factors and are less affected by overseas factors [3][21]. 3. Summary by Directory 3.1 Fed Interest - Rate Meeting Focus 3.1.1 FOMC Resolution Keeps Interest Rate Unchanged - The 2026 March FOMC resolution had three points of concern compared to January: new description of stable unemployment rate, uncertainty about the impact of the Middle - East situation on the US economy, and reduced divergence with only one opposing vote [6]. - The market had almost fully priced in the unchanged interest rate before the meeting, so the immediate market reaction was mild [7]. 3.1.2 Dot - Plot Shows One Rate Cut in 2026 and 2027 Respectively - The Fed's economic forecast in March 2026 shows that economic growth is still guaranteed, and inflation is a more concerning issue. GDP growth rate forecasts for 2026 - 2028 were raised, unemployment rate forecast for 2027 was raised, and inflation expectations were also increased [11]. - The median of the federal funds rate for 2026 - 2027 is 3.4% and 3.1% respectively, with one rate cut expected each year. The dot - plot divergence has reduced, and the rate - cut幅度 of dovish voting members has generally decreased [11][12]. 3.1.3 Press Conference Speech is Hawkish - Powell's speech was hawkish, with the "employment - inflation" focus shifting slightly towards inflation, especially emphasizing inflation expectations [15]. - Regarding employment, he believes the labor market is balanced, but the zero net employment creation in the private sector implies risks. Regarding inflation, he is cautious, emphasizing the need to focus on the transmission of tariff inflation and the stickiness of non - housing service inflation. He avoids directly answering whether to ignore oil inflation [15][16]. - The current interest rate level is appropriate, between the boundaries of tight and non - tight. The market priced in the hawkish remarks clearly [16][17]. 3.2 How to View the Market - In the short term, the US Treasury yield curve may show a bear - steepening trend. The 2 - year US Treasury interest rate may oscillate between 3.44% - 3.8%, and the 10 - year US Treasury interest rate may oscillate between 4% - 4.4% [21]. - The US dollar index is expected to maintain a relatively strong oscillation in the range of 97 - 101 due to reduced rate - cut expectations and the US dollar's safe - haven and liquidity advantages [21]. - Chinese bond interest rates are mainly determined by domestic factors and are less affected by overseas factors, but attention should be paid to the depreciation pressure on the RMB caused by the strong US dollar [21].

Market Performance - The three major U.S. stock indices closed lower, with the Dow Jones down 1.05% at 48,977.92 points, the S&P 500 down 0.43% at 6,878.88 points, and the Nasdaq down 0.92% at 22,668.21 points [1] - Most large-cap tech stocks declined, with Nvidia down over 4%, Apple down more than 3%, Microsoft down over 2%, and Tesla and Facebook down over 1%. In contrast, Google rose over 1% and Amazon increased by about 1% [1] - Chinese concept stocks mostly fell, with Canadian Solar down over 11%, iQIYI down more than 6%, and NIO down over 4%. However, Kingsoft Cloud rose nearly 7%, Tuya Smart increased nearly 5%, ZTO Express rose over 1%, and Pony.ai gained nearly 1% [1] European Market - European stock indices had mixed results, with Germany's DAX down 0.02% at 25,284.26 points, France's CAC40 down 0.47% at 8,580.75 points, while the UK's FTSE 100 rose 0.59% to 10,910.55 points [1] Commodity Prices - International precious metal futures generally rose, with COMEX gold futures up 1.97% at $5,296.40 per ounce and COMEX silver futures up 7.77% at $94.39 per ounce [1] - U.S. oil main contracts increased, with WTI crude up 3.19% at $67.29 per barrel and Brent crude up 3.26% at $73.15 per barrel [1] Currency and Bond Markets - The U.S. dollar index fell 0.15% to 97.64, while the offshore RMB against the U.S. dollar dropped 168 basis points to 6.8612 [1] - U.S. Treasury yields collectively declined, with the 2-year yield down 5.10 basis points to 3.377%, the 3-year yield down 5.62 basis points to 3.377%, the 5-year yield down 6.37 basis points to 3.502%, the 10-year yield down 5.91 basis points to 3.943%, and the 30-year yield down 4.22 basis points to 4.613% [1] - European bond yields also generally fell, with the UK 10-year yield down 4.4 basis points to 4.231%, France's 10-year yield down 3.2 basis points to 3.217%, Germany's 10-year yield down 4.7 basis points to 2.643%, Italy's 10-year yield down 2.8 basis points to 3.272%, and Spain's 10-year yield down 3.6 basis points to 3.062% [1]

Market Overview - The global market experienced a "collective turn" on Friday night, characterized by a decline in U.S. stock markets, with the Dow Jones down 1.07%, S&P 500 down 0.43%, and Nasdaq down 0.92% [3] - The 10-year U.S. Treasury yield fell below 4% (reported at 3.94%), reaching its lowest level since October, while the 2-year yield dropped to its lowest level since 2022 (reported at 3.37%) [3] - Gold prices surged nearly $100, surpassing $5,200 [3] - The U.S. dollar index experienced a slight decline after reaching a high [3] - Oil prices increased by nearly 3%, as investors weighed the risks of U.S. strikes on Iran over the weekend [3] Influencing Factors - Multiple news events influenced the market, rather than a single event as seen previously [4] - The U.S. January PPI rose significantly above expectations, indicating that inflation is not retreating [5] - Escalation risks in the Middle East were highlighted, with UN inspectors noting "unusual activity" near bombed uranium enrichment facilities in Iran [5] - A lesser-known UK mortgage institution, MFS, faced a crisis, raising concerns about systemic defaults in private credit, which could lead to a reevaluation of tech company valuations linked to AI bubble anxieties [5] Market Sentiment - The market has entered a "risk-off mode," with declines in stocks, increases in bonds, gold, and oil, reflecting a general sense of caution [5] - The drop in U.S. stocks may lead to a spread of panic, particularly as this decline is associated with rising oil and U.S. Treasury prices [6] - The notable drop in the 10-year Treasury yield below 4% suggests that risk aversion is outweighing inflation concerns, despite the PPI being higher than expected [7] - Gold has decoupled from U.S. stock movements, restoring its safe-haven function, indicating a potential phase shift in market sentiment [7] Future Outlook - A report predicting the peak timing and price of gold has emerged, suggesting significant market implications [8] - The Chinese yuan is approaching 6.80, potentially serving as a negotiation tool, with questions about its future trajectory [8] - Predictions for March regarding gold, silver, oil, A-shares, Hong Kong stocks, and the yuan have been released, indicating potential surprising developments [8] - The future of A-shares in the coming month appears predetermined, with a two-character forecast for March's trend [9]

Market Performance - The three major U.S. stock indices closed higher, with the Dow Jones up 0.63% at 49,482.15 points, the S&P 500 up 0.81% at 6,946.13 points, and the Nasdaq up 1.26% at 23,152.08 points [1] - Major U.S. tech stocks saw collective gains, including Microsoft up nearly 3%, Facebook up over 2%, Tesla up nearly 2%, Nvidia up over 1%, Amazon up about 1%, Apple up 0.77%, and Google up 0.66% [1] - European stock indices also closed higher, with Germany's DAX up 0.73% at 25,169.13 points, France's CAC40 up 0.4% at 8,553.11 points, and the UK's FTSE 100 up 1.18% at 10,806.41 points [1] Commodity Prices - COMEX gold futures rose 0.14% to $5,183.70 per ounce, while COMEX silver futures increased by 1.95% to $89.21 per ounce [1] - U.S. oil main contract fell 0.09% to $65.57 per barrel, while Brent oil main contract rose 0.45% to $70.90 per barrel [1] - London base metals saw an overall increase, with LME tin up 7.19% at $53,915.0 per ton, LME aluminum up 2.62% at $3,174.5 per ton, LME lead up 2.07% at $1,995.5 per ton, LME copper up 1.39% at $13,349.5 per ton, LME nickel up 0.76% at $18,045.0 per ton, and LME zinc up 0.22% at $3,387.0 per ton [1] Bond Market - U.S. Treasury yields rose across the board, with the 2-year yield up 3.10 basis points to 3.471%, the 3-year yield up 3.06 basis points to 3.486%, the 5-year yield up 3.29 basis points to 3.622%, the 10-year yield up 2.10 basis points to 4.052%, and the 30-year yield up 1.94 basis points to 4.699% [1] - European bond yields showed mixed results, with the UK 10-year yield up 1.2 basis points to 4.316%, France's 10-year yield down 1.2 basis points to 3.253%, Germany's 10-year yield up 0.1 basis points to 2.705%, Italy's 10-year yield down 0.6 basis points to 3.306%, and Spain's 10-year yield down 0.9 basis points to 3.108% [1]

Core Viewpoint - The global capital markets exhibited a stable performance during the Spring Festival holiday, setting a favorable external environment for the A-share market's reopening, with key drivers including expectations of interest rate cuts by the Federal Reserve and a recovery in industrial metal demand [3][6][13]. Equity Markets - The A-share market experienced a slight decline before the holiday, with the Shanghai Composite Index closing at 4082.07 points, down 1.26%, and the Shenzhen Component Index down 1.28% [4]. - The Hong Kong stock market was the only major Asian market open during the holiday, with the Hang Seng Index rising 0.52% to 26705.94 points, driven by sectors such as semiconductors and AI applications [5]. - The U.S. stock market remained stable, with the Dow Jones increasing by 0.10% and the S&P 500 maintaining a strong position, supported by robust corporate earnings and expectations of interest rate cuts [5][14]. Debt Market and Currency - The U.S. Treasury yields declined, with the 10-year yield falling to 3.85%, reflecting an 80% probability of a rate cut by June, driven by easing inflation data [6][13]. - The exchange rate remained stable, with the USD/CNY rate at 6.9225, supported by the People's Bank of China's liquidity measures and narrowing interest rate differentials [6]. Commodity Market - Industrial metals showed strong performance, with copper prices rising by 1.4% to $13,176 per ton, benefiting from global demand recovery and expectations of liquidity easing [7]. - Oil prices remained stable, with WTI crude oil slightly increasing to $62.89 per barrel, influenced by geopolitical factors and supply-demand dynamics [7]. Market Outlook - The A-share market is expected to experience a bullish trend post-holiday, with historical data indicating a 76% probability of an increase in the first five trading days after the Spring Festival [9]. - The Hong Kong market is anticipated to undergo a structural rebound, with a 60% probability of an increase in the month following the holiday, driven by external sentiment and capital inflows [11]. - The U.S. market is projected to continue its strong performance, particularly in technology sectors, supported by favorable interest rate expectations and solid corporate earnings [14].

Core Insights - Morgan Stanley's 2026 earnings guidance indicates a spending forecast of $105 billion, exceeding market expectations [1] - The corporate and investment banking sectors are expected to be the main growth drivers, with Q1 2026 EPS projected to grow by 13.40% year-over-year and net profit expected to increase by 9.88% [1] Recent Events - On February 13, 2026, the U.S. stock market experienced a decline, led by technology stocks, with Chinese concept stocks weakening and the banking sector under pressure, affecting financial stocks like Morgan Stanley in the short term [2] - Morgan Stanley recommended shorting 2-year U.S. Treasuries, citing strong U.S. economic growth and limited room for Federal Reserve rate cuts [2] - The firm emphasized that geopolitical factors and AI technology will be key drivers of market volatility in 2026 [2] Institutional Perspectives - Overall, institutional ratings for Morgan Stanley are positive, with 62% of institutions giving buy or hold ratings in February 2026, and a target average price of $350.92, indicating potential upside from the current stock price [3] - The report noted that market expectations for Chinese corporate earnings growth in Q4 2025 are low, suggesting upward correction potential for the financial sector, with over 60% positive earnings forecasts in disclosed results from capital markets and industrial sectors [3] Stock Performance - Over the last 7 trading days (as of February 13, 2026), Morgan Stanley's stock has fluctuated between a decline of 6.28% and a volatility of 9.27%, with the latest stock price at $302.15, down 0.16% on the day and a year-to-date decline of 5.80% [4] - The banking sector has seen a slight decline of 0.44% during the same period, performing slightly better than the overall market [4]

Group 1 - The long-term U.S. Treasury yields are expected to remain stable in the short term but are projected to rise later in the year due to inflation and concerns over the independence of the Federal Reserve [1] - Nearly 60% of bond strategists believe that the massive issuance of government debt to finance Trump's tax cuts and spending plans will make it unfeasible for the Federal Reserve to significantly reduce its balance sheet by $6.6 trillion [1] - The Federal Reserve is anticipated to implement two rate cuts later this year, with the first expected in June when Walsh takes over as Fed Chair [1] Group 2 - The 2-year Treasury yield, sensitive to interest rates, is projected to decrease from the current 3.50% to 3.45% by the end of April and further to 3.38% by the end of July [1] - The median forecast indicates that the benchmark 10-year Treasury yield is expected to rise to 4.29% in one year, up from last month's prediction of 4.20% [1]

Market Performance - The three major U.S. stock indices experienced slight declines, with the Dow Jones down 0.13% at 50,121.4 points, the S&P 500 unchanged at 6,941.47 points, and the Nasdaq down 0.16% at 23,066.47 points [1] - Popular tech stocks showed mixed results, with Google and Microsoft down over 2%, Amazon down over 1%, while Intel rose over 2%, and Nvidia, Apple, and Tesla had gains of less than 1% [1] - Chinese concept stocks also had mixed performance, with Century Internet up over 12%, Kingsoft Cloud up 10%, and TSMC up over 3%, while NetEase fell over 4% and iQIYI dropped over 2% [1] European Market - European stock indices closed mixed, with Germany's DAX down 0.53% at 24,856.15 points, France's CAC40 down 0.18% at 8,313.24 points, and the UK's FTSE 100 up 1.14% at 10,472.11 points [1] Commodity Markets - International precious metal futures generally rose, with COMEX gold futures up 1.53% at $5,107.80 per ounce and COMEX silver futures up 4.60% at $84.08 per ounce [1] - U.S. oil futures rose 1.45% to $64.89 per barrel, while Brent oil futures increased by 1.15% to $69.60 per barrel [1] - London base metals saw an overall increase, with LME nickel up 3.29% at $18,065.0 per ton, LME tin up 1.59% at $50,065.0 per ton, and LME copper up 1.00% at $13,239.0 per ton [1] Bond Markets - U.S. Treasury yields collectively rose, with the 2-year yield up 6.41 basis points at 3.512%, the 3-year yield up 5.87 basis points at 3.569%, and the 10-year yield up 2.77 basis points at 4.170% [1] - European bond yields collectively fell, with the UK 10-year yield down 3 basis points at 4.475%, France's 10-year yield down 2.6 basis points at 3.377%, and Germany's 10-year yield down 1.6 basis points at 2.790% [1]