February 25, 2025 Global | Sustainability & Transition Strategy What's the Market Paying For? February 2025 1) EU ETS has had the strongest performance over 12M (+41%), while Bloomberg Commodity Index (+9%) has been strongest YTD (i.e. 2025). 2) Improvers in our universe over the last 1M include Solar (TAN), Global Alternative Energy (MS700750), and Global Clean Energy (ICLN), up 6.8%, 3.5%, and 4%, respectively, vs the S&P 500. 3) For 4/4/24-2/21/25, the 100 Best Companies to Work For 2024 list has underpe ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Autos & Shared Mobility** sector, particularly regarding **China-US cooperation on electric vehicles (EVs)** [1][8]. Core Insights and Arguments - **Sino-US Relations**: Current relations between the US and China in the auto industry are at a low point, but there is potential for cooperation in EV technology despite ongoing national security concerns [1][2]. - **Market Transformation**: The transition from traditional vehicles to AI-enabled EVs is reshaping the global auto market, supply chains, and regulatory frameworks. Cooperation between US and Chinese automakers is deemed necessary for mutual benefit [2][3]. - **EV Adoption Forecast**: Short-term EV sales are influenced by policies and tariffs, but a significant increase in adoption is expected from 2027 to 2030. EVs are seen as essential for integrating AI technologies into vehicles [3][4]. - **China's Competitive Edge**: China is perceived to have a lead in producing affordable EVs, which may need to be manufactured in the US to meet local market demands. Tariffs may be used to incentivize localization of production [4][5]. - **Capital Efficiency**: Traditional US automakers like GM and Ford are expected to seek more capital-efficient strategies in the EV market, potentially collaborating with Chinese firms to optimize their investments [5][6]. - **IRA Restructuring**: The Inflation Reduction Act (IRA) may require significant changes, particularly regarding the definition of Foreign Entity of Concern (FEOC), to facilitate joint ventures that utilize US-based resources while relying on Chinese technology [6][9]. Additional Important Insights - **Strategic Partnerships**: Increased frequency of strategic announcements, joint ventures, and consolidations between legacy Western and Chinese EV companies is anticipated [11]. - **Stock Ratings**: Companies such as Tesla (TSLA), Rivian (RIVN), and Lucid (LCID) may see continued support, while traditional internal combustion engine (ICE) companies may face stagnation [11][62]. - **Investment Opportunities**: Analysts suggest reconsidering investments in Chinese EV-exposed companies and highlight potential benefits for EV-exposed suppliers [11][62]. This summary encapsulates the critical insights and implications for the auto industry, particularly regarding the evolving dynamics between US and Chinese automakers in the context of electric vehicle technology and market strategies.

Equity Research 24 February 2025 Data Center View Still cautious, but context matters We remain more conservative than most on DC growth – but there are nuances to our perspective. MSFT's own commentary, more so than purported lease cancellations, is reason to be cautious on the AI ecosystem, in our view. Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of ...

ab 24 February 2025 Global Research First Read Apple Inc. $500B in investments in the US over 4 years? Call us a skeptic We think Apple's supply chain and financial model raises doubts around the $500B Apple announced it plans to spend and invest more than $500 billion in the US over the next four years including the hiring of around 20,000 people, of which the vast majority would be focused on R&D, silicon engineering, software development and AI/ML. While the headline figure on the surface is a large numb ...

Summary of Key Points from the Conference Call Industry and Company Overview - The document primarily discusses the implications of macroeconomic factors on equity markets, Treasury yields, and European defense spending strategies, with a focus on the U.S. financial system and European geopolitical dynamics. Core Insights and Arguments Treasury Yields and Equity Performance - The correlation between equity prices and nominal Treasury yields has recently trended negative, indicating a regime shift in market behavior. The critical level for U.S. Treasury 10-year yields (UST 10Y) remains at 5%, but recent trends suggest negative equity reactivity at lower yield levels (~3% UST 10Y) due to a transition from a low yield/low inflation environment to a moderate yield/high inflation context post-COVID [5][16][18]. - Core CPI moderation over the last two years suggests that 5% UST 10Y remains a headwind for equities, but if core CPI were to reflate, negative yield/equity correlation could occur at sub-5% UST 10Y yields [5][16][18]. - The current negative yield/equity correlation presents an opportunity for hedging against recession scenarios, with specific strategies recommended for equity and bond positioning [5][16]. Supplementary Leverage Ratio (SLR) Relief - Anticipated SLR reforms under the Trump administration could reduce the minimum requirement for U.S. Global Systemically Important Banks (GSIBs), potentially creating about $6 trillion in incremental leverage capacity. This could support bank demand for Treasuries and widen swap spreads [5][19][21]. - SLR relief may also enhance dealer repo intermediation capacity but could reduce the value of central clearing, shifting focus towards margin cost reduction [5][20]. European Defense Spending Strategy - Europe's defense spending is currently low and inefficiently allocated, with national competencies leading to fragmented decision-making. A proposed increase in euro area defense spending from approximately 2% to 3.5% of GDP by 2035 could boost GDP by 1.6 percentage points compared to a no-increase scenario [6][24]. - The anticipated increase in defense spending would require careful consideration of public finances and government securities issuance, with expectations for flexible EU fiscal rules and potential redirection of unused EU funds towards defense [6][24]. - A well-designed pan-European solution for defense spending that promotes R&D and resource reallocation is deemed more effective than merely reforming fiscal frameworks for national increases [6][24]. Additional Important Insights - The document highlights the potential for a significant shift in European defense policy due to geopolitical pressures, including Russian aggression and competition from China, necessitating a reevaluation of security and defense strategies [6][24]. - The upcoming German elections are viewed as a critical moment for Europe, with potential implications for fiscal policy and defense spending, which could affect market sentiment and investment flows [6][34][35]. This summary encapsulates the key points discussed in the conference call, focusing on the implications of macroeconomic trends on equity markets, the anticipated regulatory changes affecting banks, and the evolving landscape of European defense spending.

Asia Economics Comment Economics Tariff cascade in action Asia Facts On 20 February 2025, Korea announced provisional anti-dumping tariffs (27.91% to 38.02%) on Chinese steel plates used in shipbuilding and construction, set to take effect after the finance ministry approves. 1 On 21 February 2025, Vietnam announced temporary anti-dumping tariffs (up to 27.83%) on hot-rolled steel products from China for 120 days, from 7 March 2025. 2 According to media reports from 23 February 2025, US trade officials urge ...

Global Research ab 24 February 2025 China Property 2025 NPC preview: Execution of existing measures We expect a similar policy stance as September 2024 We expect National People's Congress (NPC) meeting, starting on 5 March, may follow the policy set in late September 2024, ie: 1) property market stabilisation; 2) ensuring housing delivery; 3) increasing social housing supply; 4) promoting inventory and idle land buybacks; and 5) the establishment of a new model for real estate development. We analysed mult ...

ab 24 February 2025 NIC pre-reported revenue, EBITDA & ending cash at their Dec-Q production update (link); the key incremental information from today's result included 1) the $204m impairment for HNI & RNI and 2) dividend of ~A1.5cps with DRP overlay. We refine our modelling assumptions around RKEF output and ENC ramp-up, taking into account the tentative commodity outlook with the market still in oversupply and (non- nickel) LFP batteries continuing to eek share from ternary batteries. This sees us downgr ...

Asia Pacific Equity Research 24 February 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. CATL Overweight "America First Investment Policy" implication Price: Rmb275.55 On February 21, 2025, the White House issued the America First Investment Policy Memo ...

ab 25 February 2025 Global Research First Read Japan Electric Components Sector Feedback from Asian investor trip We visited investors in Hong Kong and Singapore From 17-20 February, we visited investors in Hong Kong and Singapore and had the opportunity to participate in 28 meetings. Cautious views on the electronic components sector predominated throughout 2024. On this visit, there was still a strong sense of caution, but we could detect expectations, albeit slight, regarding a cyclical recovery and edge ...