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The U.S. economy shows signs of slowing, prompting the Fed to cut rates, while Europe faces weaker growth and potential further easing from the ECB. In China, recent stimulus measures aim to stabilize growth, particularly in the real estate sector, enhancing investment opportunities in Greater China bonds. Emerging markets are also poised for improvement, supported by attractive valuations and less restrictive monetary policies.
Boeing has made a new offer to end the ongoing strike, proposing a 35% pay rise over four years, a $7,000 bonus, and increased pension contributions, but without continuing the old pension plan. Meanwhile, UBS is selling its 50% stake in Swisscard to American Express as part of its portfolio streamlining following the Credit Suisse acquisition. In economic news, the People's Bank of China has unexpectedly cut the Loan Prime Rate to stimulate the slowing economy.
German producer prices are expected to remain in deflation, reinforcing expectations for further ECB rate cuts. In China, the central bank has lowered mortgage reference rates, signaling support for the economy, though concerns about domestic demand persist. Meanwhile, uncertainty surrounds U.S. Federal Reserve policy as the election season intensifies, with economic perceptions diverging from reality.
Emerging market stocks are gaining favor as lower U.S. interest rates and increased Chinese stimulus create a more favorable global environment, according to UBS analysts. Asian markets, particularly Taiwan, are expected to benefit from the AI boom, while Latin America and South Africa may also see positive impacts from these conditions. However, risks such as a strong dollar, geopolitical tensions, and uncertain Chinese stimulus measures could pose challenges for these markets.
Emerging market equities are gaining favor due to lower US interest rates and China's recovery, with UBS highlighting Asian markets, particularly Taiwan, as prime beneficiaries of the AI boom. However, risks such as a strong dollar and geopolitical tensions remain. China's recent aggressive stimulus measures have boosted its equities, though concerns about their effectiveness linger.
The demand for Extended-Range Electric Vehicles (EREVs) is surging in China, with sales jumping 173% last year as consumers seek affordable options with longer ranges amid inadequate charging infrastructure. Major automakers, including Zeekr and Avatr Technology, are now pivoting to develop EREVs, reflecting a significant shift in the market. As the industry evolves, plug-in hybrids are expected to maintain strong sales for the next few years, while fully electric vehicles remain the long-term goal.
Tonghua Golden-Horse Pharmaceutical Industry Co., Ltd. reported sales of CNY 968.59 million for the nine months ended September 30, 2024, down from CNY 1,044.24 million a year ago. However, net income increased to CNY 23.92 million, up from CNY 15.55 million, with basic and diluted earnings per share from continuing operations rising to CNY 0.0248 from CNY 0.0161.
China is poised for stronger growth, with UBS projecting a Q4 GDP increase of 6.5% (SAAR) and a 2024 growth forecast of 4.8%, bolstered by government policy support and improved economic data. However, potential U.S. tariff hikes could threaten this outlook, possibly pushing growth below 4%.
China's GDP grew by 4.8% in the first three quarters of the year, surpassing expectations, though it still requires a push to reach the 5% target. UBS's Thomas Fang expressed optimism following recent policy measures aimed at stimulating the economy, anticipating potential growth above 5% for 2024.
Chinese stock markets, including the Hang Seng, rebounded over 3% following better-than-expected economic data and a new PBoC program to finance corporate buybacks. The Hang Seng is attempting to recover from the 20,000-point threshold, with a target of 22,700, 25,000, and 30,000 points, contingent on positive retail sales data.
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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