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In 6 days, it attracted 30 billion yuan, and Saudi ETF played a roller coaster.

After the Nikkei ETF and Nasdaq ETF were snapped up, Saudi ETF ushered in its dazzling moment. On July 16th, the first batch of Saudi ETFs in China was officially listed and traded. Southern fund South East Britain Saudi Arabia ETF (hereinafter referred to as "South Saudi Arabia ETF") and Huatai Bairui South East Britain Saudi Arabia ETF (hereinafter referred to as "Huatai Bairui Saudi Arabia ETF") landed on Shenzhen Stock Exchange and Shanghai Stock Exchange respectively. With the label of "holding gold nuggets in sand", it has attracted the attention of a large number of investors. Wind data shows that on the first day of listing, two Saudi ETFs opened higher and closed at the daily limit, with premium rates exceeding 6%, and the total amount of gold attracted on that day was 4.896 billion yuan. As of July 23, the total turnover in six trading days reached 31.6 billion. What is the magic of Saudi ETF? Can make investors so eager? What are the risks under high premium rate? "Let's go to Saudi Arabia to get money." The "market boundary" understands that two Saudi ETFs have been highly concerned by the market before listing. They were all approved on June 14th and put on sale on June 24th. Before they were officially listed and traded, the total amount raised exceeded 1.2 billion yuan. Among them, the ETF in South Saudi Arabia is 634 million yuan, and the total number of valid subscriptions is 14,253; Huatai Bairui Saudi ETF is 590 million yuan, and the total number of effective subscribers is 7665. By the first day of listing on July 16, the market had a big explosion directly. According to Wind data, on the same day, two Saudi ETFs opened higher and closed at the daily limit, with premium rates exceeding 6%, and the total amount of gold attracted on that day was 4.896 billion yuan. Behind the huge turnover is a very high turnover rate. Among them, the turnover rate of southern fund Nanfang Dongying Saudi Arabia ETF is over 420%, ranking first in the ETF market, and the turnover rate of Huatai Bairui Nanfang Dongying Saudi Arabia ETF is also over 330%. As of July 23rd, two Saudi ETFs took six trading days, with a total turnover of 31.6 billion. During this period, southern fund, Huatai Bairui Fund issued warning notices about transaction price premium risk for many times, but they still did not stop investors' enthusiasm. Wu Zewei, a researcher at Xingtu Financial Research Institute, told the "City Circle" that the explosion of Saudi ETF was mainly because it provided investors with a tool to allocate overseas assets conveniently and quickly. For a long time, the public used to describe Saudi Arabia's economic strength with "white cloth covering its head, rich as oil". As the largest economy in the Middle East, Saudi Arabia is the world's largest oil exporter and the second largest oil producer and reserve country, and is known as the local tyrant in the Middle East. The FTSE Saudi Arabia Index tracked by Saudi ETF includes more than 50 large and medium-sized listed companies in Saudi Arabia, covering the representative sectors of Saudi Arabia such as finance, raw materials, energy and communications. Baidu stock market shows that the FTSE Saudi Arabia index has a bright historical performance. As of the latest, the index has increased by 40% since 2020. Under the background of global stock market shocks in the past few years, its performance has greatly outperformed the FTSE Emerging Markets Index, MSCI Asia Pacific Index, Shanghai and Shenzhen 300 Index, Hang Seng Index and other major indexes. The industry calls it the Saudi version of the "Shanghai and Shenzhen 300 Index". However, the problem is that the investment threshold for entering the Saudi capital market through the "Saudi Qualified Foreign Investor Program" keeps the vast majority of China investors out. The emergence of Saudi ETF has enabled the public to "make money" in Saudi Arabia through ETF products issued in China market. In addition, cross-border ETFs support T+0 intra-day trading (that is, the shares bought on the same day can be sold on the same day), which can meet the market demand for liquidity and is naturally highly sought after. Although overseas ETFs are fragrant, don't be greedy. This is not the first time that overseas ETFs have been out of the circle. Before Saudi ETF, cross-border ETFs such as Nikkei, India, Nasdaq and so on all set off more or less enthusiasm in China. For example, at the beginning of the year, the Nikkei ETF was once exploded to buy a premium of more than 20%; In March, the premium rate of Nasdaq technology ETF exceeded 12%, ranking first among ETF funds. Qu Fang, an investment consultant of Wanlian Securities, said that Jimin's current purchase of overseas ETFs is based on the following two psychological factors: First, blindly chasing high mentality. In recent years, overseas stock markets hit a new high, and domestic investors pursued short-term profits. The second is the layout and allocation of overseas assets. Domestic investors' demand for overseas asset allocation includes factors such as yield, stability, security and exchange rate. For ordinary investors, the layout of overseas assets is not only a house purchase, but also a good choice to invest in the capital market. However, after a continuous daily limit and a large premium, the "crazy" Saudi ETF was monitored. On July 18th, a number of brokers, such as SDIC Securities, announced to investors that the recent premium rates of the two Saudi ETFs were high and there was a serious risk of market speculation. Shanghai Stock Exchange and Shenzhen Stock Exchange will strictly identify the abnormal trading behavior of the above securities, and take self-discipline management measures such as focusing on monitoring accounts, suspending account transactions and restricting account transactions as appropriate. For the measure of "suspending account transactions", some fund people use "directly unplugging the network cable" to describe the regulatory intervention. In fact, according to the DeepFund of WeChat official account Alpha Workshop, many people don't know that there is an industry secret behind this round of Saudi ETF speculation. WeChat official account, through the mouth of the industry, concluded that there is a systematic approach to cross-border ETF speculation. The first is to create a high premium. Of course, this index based on its tracking has performed quite well in the past period of time, which has aroused investors' strong enthusiasm for allocation. The second step is to incite emotions, and some so-called "big V" group-building operations have triggered retail investors to enter the market; Finally, the capital game, with large capital entering the market, will "eliminate" the original investors and investors with first-and second-class arbitrage ability. Many people in the industry also suggested to the "market boundary" that the constant pursuit of overseas ETFs is accompanied by risks for investors. Wu Zewei said that mainland investors lack investment channels, and it is normal to have a certain premium for this kind of ETF that invests in overseas markets. However, such a sharp rise and fall obviously deviates from the normal trading level of the market. The high probability is the result of short-term capital speculation in the market. The basic people may be more of a pass the parcel mentality, and some investors who don't know the truth may blindly enter the market to chase after the high. Qu Fang also said that in recent years, with the continuous rise of overseas capital markets, the overall valuation has been obviously high, and the pressure of stock market adjustment is gradually increasing in the short to medium term. As the Fed enters the interest rate cut cycle, the capital flow will be redistributed between developed countries and emerging countries, which will not only lead to fluctuations in the market, but also affect interest rates and exchange rates, thus causing potential asset losses for investors. It is worth mentioning that, under the eyes of the public, Saudi ETF-related fund companies have become extremely low-key. On the day of listing on July 16th, Li Muyang, assistant director of Huatai Bairui Fund Index Investment Department, visited Xinhuanet to interpret the investment strategy, market prospects and potential investment opportunities of Saudi ETF. On July 22, the relevant personnel expressed their hope to cool down to the "city boundary". As of July 23rd, the two Saudi ETFs have dropped rapidly from the high level, and both of them have been adjusted back by over 20% compared with the 30% increase in the previous period. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

What exactly is the

Wall Street began to disagree on the "Trump Deal". The so-called "Trump trade" actually refers to a series of investment operations conducted by investors based on Trump's policy expectations, which usually include shorting long-term government bonds, making more cryptocurrencies and investing in risky stocks, such as small-cap stocks. The logic behind it is that Trump's policies such as tax cuts, deregulation and trade protectionism will have different effects on different asset classes. Trump deal cools down Although "Trump Trading" sounds reasonable in theory, investors don't seem to buy it. On Monday, the US capital market did not continue the trend of "Trump Trading": the yield curve of US Treasury bonds leveled off and the dollar fell. Although Russell's performance at the close of 2000 was still slightly ahead of the S&P 500, it also meant that there were differences on "Trump Trading" within Wall Street. Some analysts pointed out that there are still four months before the November election in the United States. During this period, investors have to digest a large number of financial reports of US stocks and two Fed meetings. Before the election results are released, there will still be a lot of variables. Now continue to speculate on "Trump Trading" will be full of great uncertainty. As Howard Marx, the founder of Oak Capital, pointed out in the latest investment memorandum on July 17th: During the 2016 presidential election, almost everyone was convinced of two things: 1. Hillary Clinton would win. 2. If Trump wins unexpectedly, then the US stock market will collapse. However, the result was that Trump won, and then US stocks rose by more than 30% in the next 14 months. This incident fully proves: 1. People can't actually predict the direction of things; 2. I don't know how the market will react after things happen. Today's American election is full of uncertainty: the undecided presidential candidate of the Democratic Party, the uncertainty from the Fed policy to geopolitics and the valuation of US stocks all make investment more complicated. This also makes Wall Street analysts and economists have very different views on how Trump's election as president will affect financial markets. Divisions on Wall Street The biggest disagreement on Wall Street comes from the fact that the impact of the policies promoted by Trump's campaign may be contradictory. For example, his most popular tax cuts may push up inflation and interest rates, while his signature tariff increase policy may depress consumer spending and curb inflation. This contradiction makes it difficult for the market to form a consistent view of the "Trump deal". According to a survey by Bank of America, nearly three-quarters of the investors surveyed believe that if Trump wins the election, it will push up the bond yield. However, Bank of America's own strategist Michael Hartnett disagreed with this result. In a report last Thursday, he pointed out that don't believe too much in this Trump transaction explanation. No government would want prices to keep rising. The reality of the election is that voters think inflation is their biggest concern. Chen Zhao, chief strategist of Alpine Macro, also pointed out that although tax cuts will push up long-term interest rates, another favorite policy of Trump-increasing tariffs-often has the opposite effect by squeezing consumer spending. My opinion is: Trump's tax cuts will be bad for long-term bonds, while tariffs will be good for bonds. But if Trump does these two things at the same time, it is all wet. In terms of dollar and bond yields, most strategists, including Deutsche Bank, Alpine Macro and Barclays Bank, believe that Trump will boost the dollar after he takes office. After all, investors tasted this taste in Trump's first term. At that time, after Trump won the election, the dollar initially jumped with the bond yield until his trade policy suppressed economic optimism. However, economists at Jefferies, an investment bank, believe that if Trump exerts political pressure on the Fed, the attractiveness of the dollar as a wealth reserve may become smaller (the dollar will weaken). Lindsay Rosner, head of fixed income investment at Goldman Sachs, said that in any case, if Harris eventually becomes the Democratic nominee and continues Biden's policy, the yield curve may become steep. Neither candidate has discussed any form of fiscal restrictions, which have been priced into the yield curve. Many things have changed, so it is not prudent to anchor your portfolio to a specific outcome. Brian Jacobsen, chief economist of Annex Wealth Management Company, pointed out that the most secure transaction now is to switch to small-cap stocks, mainly because the valuation of small-cap stocks is cheap. Whatever the political outcome, this is a good bet. Therefore, in this complicated situation, it is not only possible to trade on political headlines, but also to analyze macroeconomic data and Fed policies. Wolf von Rotberg, equity strategist at J. Safra Sarasin, said: "What really matters is the macro data we have at present, which may change greatly before the November election. We have seen a slowing economic cycle. This will determine the interest rate space, and interest rates will have an impact on the stock market, which will have a more substantial impact on the market than politics. " As Howard Marx said: The most important job of investors is to manage risks, because we never know what will happen in the future. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Before the science and technology financial report, Biden retired again, and the market was more

Just as the US stock earnings week kicked off, Biden suddenly announced his withdrawal from the re-election campaign, and the pattern of the US election suddenly changed, adding new uncertainties to the financial market. According to CCTV News on Monday, current President Biden announced his withdrawal from the 2024 presidential election and recommended Vice President Harris as the Democratic candidate to compete with Trump. At present, traders are trying to cope with the uncertainty of the Fed's interest rate and the upcoming performance of technology giants. Now they must further weigh how Harris or other candidates will compete with Trump. There are still four months before the election, and there are too many unknowns. Traders are preparing for the "turbulent summer". This decision has completely disrupted the original election expectations, and investors are weighing the potential impact of this change on the market. Some analysts believe that "Trump Trading" will begin to close its position and be optimistic about the performance of emerging market assets.

Another Fed official is announcing that interest rate cuts are coming: there is a risk of recession if you wait too long.

On Thursday, July 28th, US Eastern Time, goolsbee, who has the right to vote at the FOMC meeting of the Federal Reserve's Monetary Policy Committee in 2025, warned that if Fed officials wait too long to relax monetary policy, they will risk causing economic recession. He told the media that the Fed may need to reduce the borrowing cost soon to avoid further deterioration of the labor market that has been cooling in recent months. Goolsbee said that the Fed's inflation struggle is still going on, but the continuous improvement of inflation data for several months convinced him that inflation has returned to the right track of falling to the Fed's target of 2%. Reducing inflation "is not finished yet, but I feel much better when I see the data improving for several months in a row." He pointed out that the labor market in the United States "is definitely a worrying area". While the price pressure has eased, keeping interest rates high means that monetary policy has been "substantially tightened". Also on Thursday, Dallas Fed President Logan, who has the right to vote at the FOMC meeting in 2026, did not talk about monetary policy. She told the Dallas Fed's meeting on banking financing that the Fed is making progress in ensuring that banks can take advantage of the Fed's emergency liquidity when necessary. The discount window of the Federal Reserve, that is, the liquidity tool that the Federal Reserve provides loans to deposit-taking banks, "effectively supports the stability of banks and financial systems, and thus promotes the flow of credit to households and enterprises". Before goolsbee and Logan spoke, earlier this week, several senior Fed officials hinted that a rate cut was coming. On Wednesday, new york Federal Reserve Chairman William Williams said that if inflation continues to slow down, he will cut interest rates in the next few months. There are signs that the labor market in the United States is cooling down, and the inflation data in the past three months are "getting closer and closer to the deflation we want". Risk warning and exemption clause

Waller's attitude change: the Fed is closer to cutting interest rates, but the time has not yet come.

More and more Fed officials are signaling that they are expected to cut interest rates in a few months' time. The latest similar remarks come from Waller, a Fed governor who has the right to vote at the FOMC meeting of the Federal Reserve Monetary Policy Committee permanently once Trump is elected earlier this year. On Wednesday, July 17th, US Eastern Time, Waller said in a prepared speech in Kansas City that the US economy is getting closer to the state where the Fed can cut interest rates, and hinted that it is not yet time, and he hopes to see "more evidence" that inflation is on the right track of continuous decline. Waller said: "The current data is consistent with achieving a soft landing, and I will look for data to support this view in the coming months. I don't think we have reached the final destination yet, but I do believe that we are getting closer and closer to the moment when it is necessary to cut the policy interest rate. " Two months ago, Waller said that he hoped to see "several months" of favorable data to support interest rate cuts, and hinted that it might not be necessary to cut interest rates before December this year. On Wednesday, he said that the recent labor market conditions and inflation data showed that inflation had resumed downward progress. The media commented that this remark paved the way for a rate cut before September. The media pointed out that Waller has been focusing on the necessity of reducing inflation for two years. On Wednesday, he emphasized the importance of preventing further slowdown in the labor market, which is an important change for him. Waller said: "At present, the labor market is at its best. We need to keep the labor market in this best state. " Waller is an important voice in the inflation debate within the Federal Reserve, and his views deserve special attention. Waller is regarded as a "hawk" by nature. At the end of May, he said that he hoped to see "good inflation data for several months" before supporting the interest rate cut. The year-on-year growth rate of PCE price index, the inflation indicator favored by the Federal Reserve, announced after his last monetary policy speech, has slowed down from 2.7% to 2.6%, and it is expected to further decline. The core PCE price index has also slowed down to 2.6%, the lowest growth rate in three years. At present, it is widely expected that the Federal Reserve will cut interest rates for the first time in this tightening cycle in September. However, like other Fed officials, Waller did not provide guidance on when the Fed will cut interest rates on Wednesday. Instead, he analyzed three different scenarios that will occur in the US economy in the next few months and possible policy options for these situations. The premise of all scenarios is that the labor market will not be significantly weak. These scenarios are: If the inflation data in the next two months is as mild as that in May and June, the Fed will cut interest rates in September. If the inflation data is mixed, the path of interest rate cut will be more uncertain. If inflation picks up sharply and lights up the red light to reduce inflation, the Fed will postpone interest rate cuts, just as it did this spring. Waller believes that the most likely situation is that inflation is "unbalanced"-not as good as the recent report, but still consistent with the overall progress of reducing inflation to 2%. He said that in this case, the uncertainty of the recent interest rate cut is even greater. Another possibility is that the inflation data will continue to be "very favorable". In this case, Waller said, "I can foresee that interest rates will be cut in the near future." Waller spoke earlier, and on Wednesday, Williams, the "third-in-command" of the Federal Reserve and chairman of the new york Federal Reserve, said that if inflation continues to slow down, interest rates will be cut in the next few months. There are signs that the labor market in the United States is cooling down, and the inflation data in the past three months are "getting closer and closer to the deflation we want". Nick Timiraos, a well-known financial journalist known as the "Fed News Agency", believes that Williams hinted that the Fed is close to cutting interest rates, but it is not ready to cut interest rates, which means that it will not cut interest rates in July and may consider cutting interest rates in September. On Monday, Federal Reserve Chairman Powell also hinted that a rate cut was coming. He said that including last week's data, inflation in the United States made more progress in the second quarter of this year. The last three inflation reports were "quite good" and "indeed enhanced" the Fed's confidence that inflation would continue to fall to the target. Powell pointed out that while paying attention to the cooling of inflation, the Fed has also begun to pay more attention to the potential weakness risk of the labor market. Some analysts said that the recent remarks of many Fed officials are strengthening this key tone change. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Analyst: Is inflation cooling down? Have you asked Trump?

With the increasing possibility of Trump winning the election, the market is worried about the global inflation impact that its "US priority policy" may bring. Recently, many analysts of Wall Street research institutions warned that the policy proposition of "high tariffs and low taxes" during Trump's first presidency was inherently inflationary, and "Trump 2.0" would only intensify. "Trump's policy may be more inflationary in the second term than in the first term," Michael Metcalfe, director of macroeconomic strategy at State Street Global Markets, told CNBC. "Compared with 2016, the inflation rate was always low and the inflation expectation was low ... 2024 and 2025 will be very different. The inflation level is higher and inflation expectations are higher. We are still in this inflationary mentality. " "High tariff" policies are usually regarded as the driving force of inflation, because they increase the cost of imported goods and enable domestic producers to raise prices, thus increasing the pressure on consumers to pay. At the same time, tax cuts can stimulate consumer spending and further push up the cost of goods and services. A recent economist poll shows that most people think that under Trump's leadership, inflation will rise because of his "hard-line protectionism" stance. This rising inflation trend may not only affect the United States, but also spread to Asia and Europe. Gareth Nicholson, an analyst at Nomura Securities, said that if Trump is re-elected, "macroscopically, this will lead to inflation (or even stagflation) in the global economy and accelerate more supply chain transfer within Asia." Although the CPI data recently released by the United States shows that inflation in the United States has cooled down, the CPI in June turned negative for the first time in four years, and the year-on-year growth rate of core CPI hit a new low of more than three years, but the market still has concerns about the inflation risk that Trump's policy may bring. On the eve of the first debate between Trump and Biden, Trump accepted an interview with the media. Trump said in an interview that "Trump Economics" = "low interest rate+low tax", hoping to reduce the corporate tax rate to a low of 15%. He also stressed that high tariffs are wise, which is good for negotiations. Regarding inflation and interest rate cuts, Trump said that he would exploit more oil to reduce energy prices, and did not want to cut interest rates before November to boost Biden's economy during his term. The analysis believes that Trump's main policy line is "rising inflation expectations". Sixteen Nobel Prize-winning economists also issued a joint letter recently, severely warning that if former President Trump wins the election in November, his economic proposition will re-trigger the acceleration of inflation and cause lasting harm to the global economy. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

The market is hot on "Trump Trading". Why has Bitcoin gone up?

The "Trump Deal" is on fire. After Trump was attacked over the weekend, a series of Trump concept assets, such as US bond yields, bitcoin, and US prison stocks, soared, thanks to his assassination, and the American people's support rate for Trump soared. Among them, Bitcoin rose for two consecutive days, rising by 5.7% on Monday, once hitting a two-week high of $63,768. Why has Bitcoin also gone up? Martin Leinweber, director of digital asset research and strategy at MarketVector, pointed out that the rising support rate of Trump's election has made risky assets such as Bitcoin favored, which is also the "Trump transaction" in traders' mouth. Trump's support for cryptocurrency is the key factor affecting the rise of Bitcoin. In particular, the Republican Party of the United States released the "Republican Party's Platform for Making America Great Again in 2024" on Monday, which mentioned: Republicans will end the Democratic Party's crackdown on cryptocurrencies and defend the right to exploit bitcoin, ensuring that Americans have the right to keep their digital assets themselves and conduct transactions without being monitored and controlled. This means that once Trump takes office, he will choose to embrace cryptocurrency. This is a major positive for cryptocurrencies that have been strictly regulated by Biden's government in recent years. If Trump is elected, the attitude of the United States towards cryptocurrency will turn 180 degrees. The current Biden administration has very strict supervision over cryptocurrencies such as Bitcoin, and even has been in a state of suppression. In the past two years, the US Securities and Exchange Commission (SEC) has initiated lawsuits against FTX, Coindesk and other cryptocurrency trading platforms, and imposed a fine of more than $5 billion. Moreover, the SEC also openly opposes the US Congress to formulate corresponding laws and regulations for encrypted assets, and claims that most issuers of encrypted tokens are in an unregulated state, which violates the federal securities law. Nowadays, the probability of Trump's election has increased, and he is more pro-cryptocurrency, and he is naturally more popular in the currency circle. Chief law officer Katie Biber of Paradigm, a cryptocurrency investment company, even said that cryptocurrency has entered the platform of the Republican Party, which is a historic breakthrough. Some analysts pointed out that Trump's choice to show good to the currency circle is the demand of the campaign. With the approach of the US presidential election in November, Trump may regard cryptocurrency as an important means to win the votes of young voters and supporters of financial technology innovation. Leinweber said that Trump has changed his position on cryptocurrency. He criticized cryptocurrency during his previous term and now he is embracing the industry. According to media reports, Trump met with people in the cryptocurrency industry at Haihu Manor in June, calling on them to keep all bitcoin mining activities in the United States, and claimed that this would help the United States occupy a dominant position in the energy field. Moreover, Trump's campaign team began to accept Bitcoin as a campaign donation as early as May. Trump's attitude towards cryptocurrency has changed and even "infected" some members of the Democratic Party. Last month, dozens of House Democrats also voted to pass a financial innovation bill. Many people think this shows that neither Republicans nor Democrats want voters to regard their party as a party against cryptocurrency. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Goldman Sachs examines AI transactions: investors are increasingly worried about "over-investment", and the downward adjustment of revenue in the second quarter will hit the valuation.

In the past year or so, AI has become one of the hottest topics in the market. However, this wave of enthusiasm is now under more scrutiny. Despite the strong performance of AI infrastructure-related stocks, investors' concerns about the return on investment of AI still exist. In the latest report, Goldman Sachs pointed out that from the four-stage framework of AI trading, NVIDIA is the obvious beneficiary, with the infrastructure stocks in the second stage performing well, and the share prices of software and IT service companies in the third stage fluctuating, and expressed doubts about the AI application stocks in the fourth stage. Goldman Sachs mentioned in the report: In the past four quarters, the AI-related capital expenditure of very large-scale cloud computing service providers (such as Amazon, Meta, Microsoft and Google) reached $357 billion, accounting for 23% of the total expenditure of the S&P 500. The capital expenditure and R&D investment in TMT industry are still lower than those in the technology bubble period, but analysts' revenue expectations of these super-large enterprises have not increased with the increase of investment expenditure. Goldman Sachs believes that the second quarter earnings season will be an important test, and investors should pay attention to the revision of revenue forecasts, which will be the key to evaluating the sustainability of AI investment trends. Goldman Sachs expects to achieve a return on investment similar to the recent history. Very large-scale enterprises need to generate about $335 billion in revenue in 2025, otherwise they may face the risk of downward valuation. Excellent performance in the second stage, fluctuation in the third stage, and doubt in the fourth stage. Goldman Sachs previously proposed a four-stage framework for AI trading: Stage 1: NVIDIA is the most obvious beneficiary; Phase 2: Focus on AI infrastructure, including semiconductor companies, cloud service providers, data center REIT (Real Estate Investment Trust), hardware and equipment companies, security software stocks and utility companies outside NVIDIA; The third stage: companies that are expected to generate incremental revenue through AI, mainly software and IT service companies; The fourth stage: companies with great profit growth potential due to the wide adoption of AI to improve productivity; Specifically, Goldman Sachs said: Driven by NVIDIA, the second stage ushered in a round of rise, which has risen by 26% so far this year; With investors' doubts about the monetization of AI, the stocks in the third stage have recently fallen, falling by 19% from February to May; Phase 4 has hardly changed in terms of revenue, valuation and performance. The second quarter earnings season will be an important test. Goldman Sachs said that the second quarter earnings season will be an important test to test investors' expected optimism: Although analysts predict that NVIDIA's revenue growth will slow down from 265% in the fourth quarter of 2023 to 25% in 2025, its valuation is still higher than its 10-year average, and this trend is common among large technology stocks. Our sales expectations are higher than general expectations. Most AI-related companies will release their financial reports at the end of July, NVIDIA is expected to release their reports at the end of August, and many software companies in the third stage will release their financial reports before the end of August. At present, investors are increasingly worried about the problem of "over-investment" in the AI field, especially for very large-scale enterprises. Goldman Sachs pointed out that compared with the technology bubble, AI capital expenditure is still dwarfed. Compared with the period of technology bubble, the current capital expenditure and R&D investment are still lower than the company's cash flow, and the current TMT stock has stronger profitability. In the past four quarters, the four very large companies (Amazon, META, Microsoft and Google) spent $357 billion on capital expenditure and R&D, accounting for 23% of the total expenditure of the S&P 500. A large part of the incremental investment was due to AI. At the height of the technology bubble, TMT shares spent more than 100% of CFO on capital expenditure and R&D due to "over-investment" of many telecom stocks. In contrast, today's leading TMT stocks are very profitable. Although the ratio of capital expenditure and R&D to sales has increased, the ratio of capital expenditure and R&D to cash flow is low at 72%, and with the recovery of profit, this ratio continues to decline slightly, compared with the 40-year median of 67%. On the other hand, investors are still skeptical about the "return on investment" potential of AI company, questioning whether huge investment can bring enough sales increment and income. Goldman Sachs said: The consensus forecast of capital expenditure and R&D of super-large enterprises increased by 7% in 2024 and 9% since 2025. In dollar terms, analysts predict that these super-large enterprises will spend $27 billion and $38 billion more on capital expenditure and research and development in 2024 and 2025 respectively than expected at the beginning of the year. However, analysts only raised their sales forecasts for 2025 and 2026 by $17 billion and $19 billion respectively. In the past five years, very large-scale enterprises have converted 31% of capital expenditure and R&D expenditure in the past three years into income on average. This sum means that these companies need to generate $335 billion in revenue in 2025 to achieve a return on investment similar to the recent history, and the income level needs to increase by 16% compared with 2024. Large-scale enterprises will eventually be required to prove that their investment will generate income and profits. Failure to meet this expectation will lead to a sharp decline in valuation and stock price.

The Fed is going to cut interest rates? Can the American Monetary Fund still buy it?

With the US Treasury sharply increasing the issuance of short-term treasury bonds in the past year, Wall Street is worried about market demand under the prospect of the Federal Reserve's interest rate cut. According to media reports on Friday, since the beginning of 2023, the US Treasury has issued 2.23 trillion US dollars of short-term US bonds. At present, the market seems to have easily digested these supplies, and the pricing between short-term national bonds and risk-free interest rates such as overnight index swaps has remained relatively stable. However, some analysts worry that market funds may come under pressure as the Fed may start to cut interest rates and shrink its table. Torsten Slok, chief economist of Apollo Global Management, warned: Once the Fed starts to cut interest rates in September, the demand for short-term treasury bonds by households and money market funds may decrease, thus pushing up short-term interest rates. But not all Wall Street experts hold this view. Some analysts believe that investors have flooded into the money market in order to lock in the high returns brought by the Fed's interest rate hike. As of the latest data, the total assets of money market funds reached 6.14 trillion US dollars, which is close to a record high. They believe that these funds will remain abundant. As the Federal Reserve approached to cut interest rates, money market funds began to extend the duration of assets and buy longer-term short-term government bonds to lock in higher returns. This means that enterprises that directly buy short-term treasury bonds will turn to invest cash in funds, thus further increasing the demand for short-term treasury bonds in the money market. Mike Bird, Senior Portfolio Manager of Allspring Global Investments, said: The view that the demand for short-term treasury bonds declines during the interest rate cut cycle of the Federal Reserve is somewhat exaggerated, especially for money market funds, and we will continue to maintain the demand for purchases. Teresa Ho, head of US short-term interest rate in JPMorgan Chase, thinks: In the past three interest rate reduction cycles, it was not until the second half of the Fed's interest rate reduction process that funds began to flow out of money market funds. At present, the yield of 4% to 5% is still quite high. In addition, on the supply side, as the debt ceiling will take effect again on January 1 next year, the issuance of short-term government bonds may decline. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Debtor Gross: Tesla is becoming a new retail concept stock.

Bill gross, a senior investor, thinks Tesla is like a speculative game of retail investors. "Tesla is like a online celebrity concept stock-the fundamentals are weak, but the price has soared." Former chief investment officer and co-founder of PIMCO said in an article in X on Tuesday afternoon, "But now it seems that there will be a new online celebrity concept stock every other day, most of which are' ship pulled'." Tesla has continued to rise in the last 10 days, and its share price has risen by an astonishing 43.6% since June 24. Set a record for the longest consecutive increase in a year. The increase was originally due to Tesla's vehicle production and delivery in the second quarter exceeding analysts' expectations. At present, Tesla's after-hours trading price in the US stock market is $261.62, down 0.62%. Gross believes that this strong delivery report is not enough to support such an amazing increase. He compared Tesla with the "old active stock". Recently, online celebrity Roaring Kitty bought a large stake in Chewy, a pet retailer, and Chewy gained the status of online celebrity concept stock. This celebrity triggered the craze of GameStop in 2021. Gross had previously revealed that he made a quick profit by trading options of GameStop and AMC in 2022, calling these stocks "lottery stocks". Despite this, Tesla's share price has only risen by about 6% so far this year, lagging behind the S&P 500 index, which has risen by 17% this year. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.


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