Macroeconomic Weekly Report: Finding a New Balance Amid Market Adjustments

1. Macroeconomic Review of This Week

1. Market correction expectations, defensive sentiment dominates

This week, US stocks generally pulled back, while the utility sector rose against the trend, indicating a flow of funds towards defensive assets. The VIX index remained above 20, reflecting that market sentiment is still in a cautious adjustment phase.

2. The commodity market is diversifying, and risk aversion sentiment is rising.

Gold has broken through $3,000 per ounce to set a new high, and copper prices have risen by 3.9%, indicating that manufacturing demand still has support. Crude oil prices remain stable, but net futures positions have decreased, reflecting market concerns over global demand growth.

3. The cryptocurrency market is adjusting synchronously, and the long-term allocation value of Bitcoin still exists.

The short-term selling pressure on Bitcoin has eased, supported by a favorable liquidity environment in the long term. Other cryptocurrencies are showing weak performance, market risk appetite is declining, and the inflow of funds into stablecoins is slowing down.

4. The impact of tariffs is becoming evident, and the global supply chain is accelerating its adjustments.

The Baltic Dry Index has risen, indicating an acceleration in manufacturing activity in the Asia-Europe region. The U.S. transportation index has declined, showing weak domestic demand. The trend of supply chain restructuring is evident, putting pressure on the domestic economy in the U.S.

5. Inflation data cools down, but expectations diverge.

CPI and PPI are lower than expected, reinforcing market expectations for interest rate cuts. However, consumer inflation expectations are rising, and partisan divisions are evident. The divergence between actual data and expectations has increased market uncertainty.

6. Liquidity marginal easing, credit market risks intensify

The outflow from the general account of the US Treasury has decreased, and the use of the Federal Reserve's discount window has declined, temporarily stabilizing liquidity. However, credit spreads are widening, credit default protection is rising, and market concerns about corporate and government debt are intensifying, which may suppress the performance of risk assets.

2. Macroeconomic Outlook for Next Week

1. Key Variables: FOMC Meeting, Retail Data, Global Central Bank Dynamics

Focus on the Federal Reserve's dot plot guidance for interest rate cuts (expected 2-3 cuts). Whether QT will be paused will become the market focus, potentially affecting risk appetite.

2. Strategy Recommendations

• Stock market: Reduce allocation to high-risk assets, increase holdings in defensive sectors, and pay attention to opportunities for mispriced high-quality assets.
• Crypto Market: Long-term holding of Bitcoin, reduce allocation to other cryptocurrencies, and pay attention to changes in stablecoin liquidity.
• Credit Market: Reduce high-leverage corporate bonds, increase allocation of high-rated bonds, and be cautious of the risk of US debt deficit.
• Core turning point signal: Repair of the credit market or the Federal Reserve releases a clear easing signal.

The current market is in a period of multiple contradictions, and investors need to remain cautious, seizing potential opportunities when the market shows signs of overshooting. Special attention should be paid to the interest rate cut expectations and QT policy from next week's FOMC meeting, as these could have a significant impact on market sentiment.