Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the impact of tariffs on global equities, particularly focusing on the dynamics between the United States and its key trading partners, including Mexico, Canada, the European Union, and China [2][3][4]. Core Insights and Arguments - **Tariff Baskets**: J.P. Morgan has launched 11 new equity tariff baskets in collaboration with global equity strategists and analysts, covering approximately 1,000 companies to help investors navigate trade turbulence [2]. - **Current Tariff Situation**: The effective tariff rate on US imports is historically low at around 2.4%. However, proposed tariffs could significantly impact S&P 500 earnings, with an estimated EPS impact of ~$20, potentially erasing two-thirds of next twelve months (NTM) EPS growth [3][4][28]. - **Sector Exposure Changes**: - Mexico has increased its exposure to the US Auto and Industrial sectors, while Canada has seen a decline in Auto sector exposure but growth in Natural Resources [3][13]. - China’s leading export sector has shifted from Technology to Discretionary Retail due to tariff impacts [3][13]. - The EU, while largely unaffected in the current round, has a significant trade surplus with the US, which may become a negotiation target [3][4]. - **Market Volatility**: The market is expected to experience sudden bouts of volatility followed by recovery, with high stock dispersion being a consistent feature in 2025 [2]. Additional Important Insights - **Corporate Sentiment**: Negative sentiment has been observed in the Technology and Materials sectors, with a notable shift from the previous administration's focus on the Industrials sector [10]. - **Consumer Impact**: The implementation of tariffs could lead to an estimated annual cost of $2,000-$3,000 per household, particularly affecting low-end consumers who are already under pressure [12][33]. - **Trade Interdependence**: The interconnectedness of the US, Mexico, and Canada means that escalating trade tensions could pose significant challenges to their economies, especially for Mexico and Canada, which rely heavily on US exports [13]. - **Closing of De Minimis Loophole**: The potential removal of the de minimis exemption could lead to higher prices for consumer goods, significantly impacting e-commerce and retail sectors [14]. Conclusion - The evolving landscape of tariffs and trade policies presents both risks and opportunities for various sectors and companies. Investors should closely monitor these developments to assess their potential impacts on earnings and market dynamics.

China Insurance Revisiting market volatility during trade tensions; sector's beta appears to be higher compared to 2018 China's insurers allocate a significant portion of their AUM to A-share equities (9-18% of AUM), which is equivalent to a substantial portion of their book value (1.1x on average). As such, the sector's stock beta remains above 1 (Table 1), making China equity market volatility critical to their stock performance. In addition, the regulatory environment has been updated, with a notable 30% ...

Flash | 05 Feb 2025 11:49:26 ET │ 10 pages CITI'S TAKE MCT reported travel traffic and industry revs were up 5.9/7.0% yoy 501mn/Rmb677bn during 8-day CNY holiday, implying average spending per capita +1%, while MOT reported national passenger throughput up 5.8% with volume of railway/airline/roadway/waterway +5/+3/+6/+7% during the holiday. OTAs' share prices corrected today, which we attribute to 1) passenger throughput growth not picking up in last two days of CNY holiday as some investors had expected, e ...

V i e w p o i n t | 05 Feb 2025 03:57:24 ET │ 13 pages Asia FX and Rates Strategy China: Bond Supply/Demand Dynamics – How To Measure "Asset Famine"? CITI'S TAKE We discuss China bond demand and supply outlook for 2025, and come up with a way to proxy demand-supply balance to measure the degree of "asset famine" in China. Under our base case assumptions, the "asset famine" may be somewhat less severe in 2025, but the overall bond demand-supply balance may still skew towards the demand side. Rohit Garg AC +6 ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Indian economy, particularly high-frequency economic indicators for January 2025, indicating a mixed but gradually improving trend in economic activity [1][2]. Core Insights and Arguments - **Monetary and Fiscal Policy**: The combination of monetary easing and increased fiscal spending is expected to support economic growth in the upcoming months [1][2]. - **High-Frequency Data Trends**: - GST collections reached INR 1.96 trillion, marking a 12.3% year-over-year growth, the highest in nine months, compared to 7.3% in December [6]. - Central government capital expenditure (capex) rose to INR 1.7 trillion in December, a 95.3% increase year-over-year, significantly higher than the average of INR 640 billion from April to November [6]. - Manufacturing PMI increased to a six-month high of 57.7 in January, driven by higher export orders, while services PMI decreased to 56.5, the lowest since November 2022 [6]. - Credit growth improved to 11.5% year-over-year as of January 10, up from 11.2% in December [6]. - Vehicle registrations for two-wheelers showed recovery, while passenger vehicle registrations slightly moderated year-over-year [6]. - The Naukri Job Index grew at a slower pace, influenced by base effects [6]. - Air passenger traffic remained robust, and consumer sentiment showed resilience, although power demand weakened to 2.5% year-over-year in January [6]. Important Trends to Monitor - **Government Spending**: Continuous monitoring of both revenue and capital expenditure trends is crucial [3]. - **Agricultural Output**: The winter crop (rabi) output will be tracked to assess food price volatility and rural demand strength [3]. - **Domestic Liquidity**: Observing domestic liquidity and financial conditions is essential for understanding economic stability [3]. - **External Environment**: The impact of trade and tariff developments, as well as the Federal Reserve's actions, will be significant [3]. Additional Insights - The government aims to maintain its capex at 3.1% of GDP for FY2026, while also investing in social infrastructure [2]. - The expected rate cut of 25 basis points on February 7 is anticipated to further stimulate growth [2]. - The strength in services exports is seen as a positive indicator for employment prospects [2]. Conclusion - The Indian economy is showing signs of recovery, supported by strong government spending and improving high-frequency indicators. Continuous monitoring of these trends will be essential for assessing future growth prospects and potential investment opportunities.

Summary of Texas Instruments Inc (TXN) Capital Management Call Company Overview - **Company**: Texas Instruments Inc (TXN) - **Industry**: Semiconductor - **Market Cap**: $164.49 billion [7] Key Points Capital Expenditure and Financial Targets - TXN reiterated its capital expenditure (capex) plans, maintaining a capex spend of $5 billion for 2025 and a floor of $2 billion for 2026, contingent on revenue growth [2][11] - The company is nearing the end of its capex investing cycle, which is expected to transition from a depreciation headwind to a tailwind in the coming years [11][21] Inventory and Sales Expectations - An analog inventory replenishment is anticipated in 2025, as sales remain approximately 25% below peak levels [2][12] - TXN is expected to benefit significantly from this replenishment due to its expanded 300mm manufacturing capacity [10][12] Earnings Projections - TXN is projected to achieve peak sales of $20 billion, with peak gross margins of 70% and peak operating margins of 52%, leading to a long-term peak EPS of over $10.00 [3][17] - Free cash flow (FCF) per share is expected to grow from $1.64 in 2024 to between $8 and $9 as sales recover to 2022 levels [4][31] Valuation and Investment Rating - The current target price for TXN is set at $235.00, reflecting a 30.2% expected return, with a Buy rating reiterated based on anticipated 100% EPS growth [5][35] - TXN trades at a premium to peers, justified by its quality and growth potential [36] Margin and Cost Structure - TXN's operating margins have decreased significantly, from 53.6% in 1Q22 to an estimated 29.5% in 1Q25, but are expected to recover as the high capex phase concludes [21] - The company plans to increase the proportion of revenue manufactured on its 300mm facility from 60% to 70% by 2026, which could reduce costs by 40% compared to 200mm wafers [26] Market Position and Risks - TXN has shifted its revenue mix towards industrial and automotive markets, increasing from 46% in 2015 to 69% in 2024, which may provide margin benefits [29] - Risks include dependence on the industrial end market, competition from companies like Analog Devices and Microchip, and potential product obsolescence due to lower R&D spending compared to competitors [41][42] Financial Performance Metrics - Projected revenue for 2025 is $16.7 billion, with a gradual increase to $20 billion by 2027 [9] - EPS estimates for 2025 are projected at $5.38, with further growth expected in subsequent years [6] Conclusion - Texas Instruments Inc is positioned to benefit from an anticipated recovery in analog inventory and has a strong outlook for earnings growth, supported by strategic capex and a favorable shift in market focus. The company remains a top pick in the analog semiconductor space, with a solid investment rating and growth potential.

February 5, 2025 03:36 PM GMT China Transportation | Asia Pacific Infrastructure Asia Pacific Industry View In-Line Measuring Risks from China – US Cross-Border E-commerce Growth Dynamics Key Takeaways What's new: The market is discussing potential downside risks to China-US cross- border e-commerce following the higher taxes on small parcels shipped from China to the US. Bear case – What if cross-border e-commerce demand is back to pre-Covid level? A down-cycle for air freight rates? We are unsure: Long ha ...

Summary of Thematic Equity Strategy Conference Call Industry Overview - The thematic equity market remains a growth market in 2025, with growth themes and key indices outperforming on an equally weighted basis, despite cap-weighted returns being influenced by the "Magnificent 7" stocks [1][2][3] Key Points Market Performance - Year-to-date, growth themes are outperforming value themes when measured on an equal-weighted basis, indicating a broadening of the growth trade beyond the Magnificent 7 [2][9] - The NASDAQ-100 has lagged behind the S&P 500 on a cap-weighted basis, but equal-weighted measures show that growth stocks are performing well [8][19] Investment Strategy - A balanced approach is recommended, focusing on incremental alpha opportunities within a Growth-Cyclicals/Defensives barbell allocation [3][10] - The strategy emphasizes managing risks associated with rising rates, AI disruptions, and tariffs, while maintaining exposure to growth, cyclicals, and defensives [7][43] Thematic Updates - Republic Services (RSG) has been added to the Thematic 30 recommended list, replacing Edison International (EIX) due to better expected returns and operational efficiency [5][35] - RSG is highlighted for its low market beta and expected improvement in return on equity (ROE) driven by operational efficiencies [36][37] Performance Metrics - Thematic 30 has outperformed the Russell 1000 benchmark by over 300 basis points, indicating strong performance amidst market volatility [29] - Growth themes have shown an average year-to-date total return of 4.68% on an equal-weighted basis, compared to 3.39% on a cap-weighted basis [25] Sector and Theme Analysis - Key themes include Artificial Intelligence, Digital Leisure, FinTech, and Pollution Solutions, with varying performance across sectors [14][27] - Notable performers include Wearable Technology (12.87% return) and Digital Leisure (12.31% return) on an equal-weighted basis, while Video Gaming has underperformed significantly (-6.28% return) [28][33] Additional Insights - The report emphasizes the importance of focusing on high-quality, less rate-sensitive exposures in defensives due to ongoing rate risks and inflation concerns [12][43] - The overall strategy suggests that investors should be patient and focus on incremental alpha opportunities rather than attempting to time market rotations [11][44] Conclusion - The thematic equity landscape in 2025 is characterized by a focus on growth, with a balanced approach recommended to navigate various market risks. The addition of Republic Services to the recommended list reflects a strategic shift towards companies with strong operational efficiencies and lower market sensitivity.

February 5, 2025 09:00 PM GMT China Equity Strategy | Asia Pacific Positions of Active Long-only Managers in China/HK Chinese equities continued to show outflow from foreign funds in January 2025, though at a slower pace vs. December 2024. Passive funds had US$0.7bn outflows and active funds had US $1.7bn outflows. EM LOs added underweights in China to 2.9ppt. Foreign domiciled funds flow: Chinese domestic funds flow: Short interest ( Exhibit 14 , Exhibit 15 ): M Update Morgan Stanley Asia Limited+ Chloe Li ...

J P M O R G A N CEEMEA Credit Research 05 February 2025 What we learned from meetings with 30 EM corporate investors Cautiously constructive; OW HY but shying away from riskier names; A 'carry-year' ahead We met/spoke with ~30 EM corporate credit investors (mostly real money, some fast, mostly dedicated, some cross-over / opportunistic) in London and US over the past 2 weeks with respect to CEEMEA credits. Key takeaways Investors remain generally constructive and engaged, but more defensively positioned Spr ...