Mini Program: Daily Investment Bank / Institutional Viewpoints Summary

Abroad

1. Goldman Sachs: Expects the Federal Reserve not to cut rates in January.

Goldman Sachs economists, led by Jan Hatzius, wrote in a report that although they expect Federal Reserve policymakers to cut rates by 25 basis points this week, recent comments suggest that the Fed 'clearly' wants to slow the pace of rate cuts. They stated that this is because the unemployment rate will be below the Fed's forecast for 2024, while inflation remains above target. 'The key question in the FOMC statement and press conference is whether to emphasize slowing the pace of rate cuts or to continue relying on each meeting and data to make decisions. We expect to hear both messages, including the addition of a statement agreeing to slow the pace of rate cuts.' Goldman Sachs' views align with market pricing, where the market sees a 90% chance of a rate cut this week but has largely ruled out the possibility of a further cut in January. Goldman Sachs still expects the Fed to cut rates in March, June, and September, with the final rate reaching 3.5%-3.75%.

2. Nomura Securities: The US dollar is expected to strengthen in 2025.

Nomura Securities' global foreign exchange strategy team stated in a research report that the US dollar may strengthen in 2025. The team indicated that the main themes entering next year include the Federal Reserve possibly finding it difficult to cut interest rates due to persistently high core inflation in the United States and the tariff policy of elected President Trump. The team added that currencies that may perform poorly in the first half of 2025 include the Korean won, Thai baht, Singapore dollar, Swiss franc, and Swedish krona, while the Indonesian rupiah, Japanese yen, and Norwegian krone may perform slightly better.

3. Panasonic Macro: The Federal Reserve is expected to unanimously agree to cut rates in December.

Panasonic macroeconomist Samuel Thomas and Oliver Allen stated that before the policy decisions to be made this week, Federal Reserve officials are in a communication blackout, but they expect a unanimous decision to cut interest rates by 25 basis points. Federal Reserve Governor Waller indicated before the meeting that he favors a 25 basis point cut, which is the clearest policy comment among committee members. Economists expect that, given that inflation stubbornly remains above target, pausing rate cuts will be the default option for the Federal Reserve at the January meeting.

4. ANZ Bank: Investment and physical demand drive gold, which may challenge $2,900 next year.

Gold prices slightly rose ahead of the Federal Reserve's interest rate decision later this week. ANZ Bank research analysts stated in a report that although a rate cut by the Federal Reserve seems imminent this week, investors are concerned that the Fed may pause rate cuts in January. However, escalating geopolitical tensions continue to support safe-haven demand, with an increase in gold ETF holdings and speculative net long positions last week. ANZ expects gold to reach a record high of $2,900 per ounce next year, supported by strong investment inflows, robust physical demand, and increased central bank purchases.

5. Rabobank: The yield difference between 10-year US and German bonds is expected to further widen.

Rabobank analysts stated in a report that as the strong US economy pushes up US bond yields, the yield difference between 10-year US and German bonds is expected to further widen. According to Tradeweb data, the yield difference between 10-year US and German bonds is 214 basis points, close to the year-to-date closing high of 220 basis points reached in April. Analysts indicate that as long as stock market valuations continue to rise and the positive wealth effect is sustained, US economic growth will remain resilient. Under this premise, the yield spread is expected to break through this level (220 basis points) and continue to widen.

Domestic

1. CICC: The recovery point for paper demand, at the tail end of the capacity cycle.

CICC research report points out that looking ahead to 2025, paper demand is expected to recover moderately under the strong boost of policies aimed at consumption, with supply-side conditions at the tail end of the capacity cycle. The supply-demand balance of containerboard and cultural paper is relatively easier to restore. Once pulp stabilizes at the bottom, it may oscillate primarily, and in stock selection, there is a preference for portfolios with substantial safety margins and balanced performance. In the medium to long term, the scarcity of companies with high-quality forest land and pulp resources is expected to increase. It is estimated that from 2023 to date, global new commodity pulp capacity has exceeded 8 million tons (accounting for over 10% of 2023 commodity pulp capacity). Looking forward, the next large-scale commodity pulp project may not begin production until 2027, with no highly certain large projects anticipated in the interim; considering the continuous growth of the global economy, upstream wood chips and pulp resources may trend toward tightening, favoring companies with high-quality forest land and pulp resources.

2. CITIC Securities: The State Grid constellation begins deployment, favoring the fundamental market for low-orbit satellites.

CITIC Securities research report states that on the evening of December 16, the Long March 5B successfully launched the first batch of network satellites for the State Grid, and significant events in the next month will also include the first launch of Hainan Commercial Launch No. 1 and the maiden flight of Long March 8A. With the utilization of Hainan Commercial Launch and the new rocket, the deployment speed of the two major constellations is expected to accelerate, making 2025 the year of explosion for low-orbit satellites, with the market gradually shifting from event-driven to fundamental-driven, looking favorably at investment opportunities in related materials and components.

3. CITIC Securities: The overall opportunities for the internet sector next year outweigh the risks.

CITIC Securities research report states that we observe that in 2024, under the backdrop of weak macro expectations, leading internet companies that outperform the market share a commonality of demonstrating strong profit resilience amidst macro uncertainty. Looking ahead to 2025, the overall opportunities for the sector outweigh the risks, with current sector performance expectations, valuations, and foreign ownership ratios all at historical lows. Strengthened buybacks will continue to boost internet companies' EPS, providing a strong safety margin. Moreover, positive changes in macro policies will provide a double boost to the sector's performance and valuation, offering significant upside potential. We believe that cyclical sectors such as e-commerce, local services, travel, freight, online recruitment, and real estate service platforms will significantly benefit, with stable patterns and performance certainty enjoying valuation premiums.

4. CITIC Construction Investment: The comprehensive implementation of the personal pension system accelerates the entry of long-term funds into the market, potentially leading to synergistic growth in multiple businesses for brokerages.

CITIC Construction Investment research report states that the personal pension system is being implemented nationwide, with long-term funds expected to accelerate their entry into the market, potentially leading to synergistic growth in multiple businesses for brokerages. With the comprehensive implementation of the personal pension system reform, aided by extensive promotion and tax incentives, the social awareness and contribution levels of personal pension plans are expected to continue rising, which may promote the sales growth of various pension products. For brokerages, the rapid development of personal pension products may lead to an increase in agency sales scale. On the other hand, as the social security structure in our country continues to improve, the supply of medium to long-term funds will be enhanced, and the demand for wealth management from residents will continue to rise, leading to incremental opportunities for businesses such as pension advisory and asset management, resulting in sustained synergistic growth in multiple businesses for brokerages.

5. Minsheng Securities: The development path of the satellite internet industry is becoming increasingly clear.

Minsheng Securities research report points out that currently, the Qianfan Constellation has completed three launches, with the number of satellites in orbit reaching 54; the GW constellation has also completed the launch of the first group of satellites, and the satellite industry ecosystem is accelerating formation, with the aerospace industry landscape gradually unfolding. On the satellite manufacturing end, technological innovation will create conditions for large-scale production; on the satellite launch end, the utilization of commercial space launch sites and the development of reusable rocket technology will significantly reduce launch costs and enhance capacity, with the development path of the satellite internet industry becoming increasingly clear. Additionally, breakthroughs in direct satellite connection technology for mobile phones will create broader and more lasting demand for the satellite internet industry.

6. Galaxy Securities: Domestic economic policy is set positively, benefiting the rebound in metal prices.

Galaxy Securities research report indicates that this week's Central Political Bureau meeting and the Central Economic Work Conference have set the tone for the 2025 economic work plan, emphasizing the need for enhanced unconventional counter-cyclical adjustments in 2025, clearly stating the implementation of a more proactive fiscal policy and moderately loose monetary policy. The fiscal policy has been upgraded from 'proactive' to 'more proactive', which will increase the fiscal deficit rate, issue ultra-long special government bonds, and issue special bonds for local governments to resolve local debts, acquire land reserves, and stock housing; the tone of monetary policy has been adjusted from 'prudent' to 'moderately loose' for the first time since 2011. At the same time, the meeting called for a comprehensive expansion of domestic demand, with greater support for 'dual' projects, aiming to stabilize the real estate and stock markets. Since September 24, domestic policies have shown a trend of intensive introduction, and this meeting once again clearly released signals of strengthening proactive macro policies for 2025, accelerating domestic economic recovery, improving expectations for macroeconomic conditions, and subsequently enhancing the demand for upstream copper and aluminum in the non-ferrous metal industry from downstream sectors such as real estate, construction, machinery, automobiles, and home appliances. Ample liquidity is also expected to support the rise in non-ferrous metal commodity prices. It is recommended to focus on leading stocks in the cyclical copper and aluminum sector.

Article reposted from: Jin Ten Data