Tao Wang (UBS Investment Bank): de-escalation in US-China trade tensions may result in smaller shocks to China's exports and economic growth. Expects China's real GDP growth to increase by 3.7% to 4.0% this year. [analysts flipping macro bullish after the fake trade war FUD]
Morning Star analyst Kai Wang: The worst of the US-China trade war is over. A market recovery could come sooner than during the first trade war as a reprieve took only about a month after the initial US tariff announcement
Oxford Economics: The probability of a US recession occurring this year has fallen to 35% after the announcement of a temporary US trade deal
Ken Cheung of Mizuho Securities Asia: yuan in a "better shape" following the breakthrough in US-China trade negotiations
NYSE Advance-Decline line, a market breadth indicator (number of stocks closing the day in green), is on track to hit a new ATH today. We're currently at only 769 advances away form ATH. [Breadth is leading the market higher]
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China's foreign ministry, on U.S. fentanyl tariffs: China has repeatedly said fentanyl is a U.S. issue.
*China's foreign ministry, on U.S. fentanyl tariffs: US ignores China's good will.
*China's foreign ministry, on U.S. fentanyl tariffs: US ignores China's good will.
US Treasury Secretary Bessent: President Trump wants to rebalance US economy, China needs to rebalance towards consumption economy.
*Bessent: We do not want a generalised decoupling between the two largest economies in the world.
*Bessent: Very productive discussions with Japan.
*Bessent: United States will bring medicine, semiconductor and other strategic industries home.
*Bessent: Have been focused on Asia trade deals.
*Bessent: I am optimistic on trade, we can see more frictionless trade.
*Bessent: We do not want a generalised decoupling between the two largest economies in the world.
*Bessent: Very productive discussions with Japan.
*Bessent: United States will bring medicine, semiconductor and other strategic industries home.
*Bessent: Have been focused on Asia trade deals.
*Bessent: I am optimistic on trade, we can see more frictionless trade.
JPM still cannot get enthusiastic about the trade war truce: The trade war shock is still material. Assuming 41% on China and 10% elsewhere (and with sector tariffs), we now estimate an effective ex-ante tariff rate of 14.4%. This is akin to a $475bn tax hike on US households and businesses, worth 1.6% of GDP, sitting close to the largest tax hike in the post WWII period. [ignore macro FUD, BTFD]
Barclays expects Fed rate cut in December vs July previously.
*Goldman Sachs expects US Fed to deliver one interest rate cut in 2025 vs prior forecast of three cuts.
*GS pushes the expected start of Federal Reserve rate cuts to December from July [and back to July if CPI surprises to the downside today]
*Goldman Sachs expects US Fed to deliver one interest rate cut in 2025 vs prior forecast of three cuts.
*GS pushes the expected start of Federal Reserve rate cuts to December from July [and back to July if CPI surprises to the downside today]
Citi: Gold prices hit record highs in late April and broke Citi Research's target price of US$3,500 per ounce
*Citi: Gold prices may continue to consolidate amidst progress in the tariff talks as tariff concerns drove surge in gold prices.
*Citi: the record global wealth allocation to gold, the expansion of the share of gold in central bank reserves, the decline in demand for jewelry and the potential rise in scrap supply could act as resistance to higher gold prices.
*Citi: Gold prices may continue to consolidate amidst progress in the tariff talks as tariff concerns drove surge in gold prices.
*Citi: the record global wealth allocation to gold, the expansion of the share of gold in central bank reserves, the decline in demand for jewelry and the potential rise in scrap supply could act as resistance to higher gold prices.
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