Macro Review and Outlook for This Week

1. Macro Review of This Week

1. The overall market performance is cautious.

This week, the three major U.S. stock indices generally pulled back, with the Dow Jones Industrial Average falling by 3.1%, the Nasdaq index down by 2.6%, and the Russell 2000 index decreasing by 1.8%. The utilities sector rose against the trend by 1.4%, reflecting a flow of funds into defensive assets. The VIX index remained above 20, indicating that market sentiment is still in a cautious adjustment phase.

2. The product market is clearly differentiated.

Gold prices have broken through $3000/ounce, setting a new historical high, indicating an increase in safe-haven demand. Copper prices rose by 3.9%, suggesting that manufacturing demand remains supported. Crude oil prices are stable around $67, but net futures positions have decreased by more than 9.6%, reflecting weak market expectations for global demand growth. Natural gas prices continue to decline, mainly due to oversupply and weak industrial demand.

3. Cryptocurrency market synchronized adjustment

The short-term selling pressure on Bitcoin has eased, but altcoins are performing weakly, and market risk appetite is declining. The market capitalization of stablecoins continues to grow, but net inflows are slowing down, indicating a cautious trend in market liquidity.

4. Global Supply Chain Accelerated Adjustment

The Baltic Dry Index ( BDI ) continues to rise, indicating strong shipping demand in the Asia-Europe region. The U.S. transportation index has dropped by 6.5%, showing weak domestic demand. This reflects that under the influence of tariff policies, the global supply chain is undergoing regional restructuring, putting pressure on the U.S. economy.

5. Inflation data cools but expectations diverge

CPI and PPI data fell short of expectations, strengthening the market's expectations for interest rate cuts. However, consumer inflation expectations have risen, and there are significant partisan divides. The widening gap between actual data and expectations has increased market uncertainty.

6. Liquidity is moderately eased but credit risks are increasing.

The outflow from the TGA accounts of the U.S. Treasury, along with a decline in the usage of the Federal Reserve's discount window, has temporarily kept liquidity stable. However, the widening of corporate credit spreads and rising CDS indicate increasing market concerns about corporate and government debt, which may suppress the performance of risk assets.

2. Macroeconomic Outlook for Next Week

1. Pay attention to the FOMC meeting and retail data

Next week, the market will focus on the Federal Reserve's FOMC meeting, especially the guidance on interest rate cuts from the dot plot, with expectations of 2-3 rate cuts (. In addition, whether the Federal Reserve pauses QT will also become a market focus, potentially affecting risk appetite. Economic data such as retail sales are also worth paying attention to.

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) 2. Investment Strategy Suggestions

• Stock market: reduce high-risk asset allocation, increase holdings in defensive sectors, and pay attention to opportunities for undervalued quality assets.
• Cryptocurrency: Maintain a long-term holding of Bitcoin, reduce allocations to altcoins, and pay attention to changes in stablecoin liquidity.
• Credit Market: Reduce high-leverage corporate bonds, increase allocation of high-rated bonds, and be wary of U.S. debt deficit risks.
• Attention signals: The repair of the credit market or a clearer signal of easing from the Federal Reserve may become a turning point for the market.

Overall, the market is still seeking a new balance, and investors need to remain cautious while seizing potential opportunities for undervalued quality assets.

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