From Article (Kevin Strategy Research)on #WeChat

The U.S. credit cycle has turned negative since 2022, indicating a potential contraction, with the Federal Reserve's interest rate hike considered "just right." Anticipating a downward growth trend in the U.S., the pressure is expected to increase in the second half of the next year. However, limited erosion of consumption by high interest rates suggests the downturn may not be deep. Inflation pressure has eased, with oil prices becoming a primary variable. The degree of tightening is deemed appropriate, requiring maintenance of current financial conditions. Interest rates may decline in two stages, focusing on market fluctuations or weakening economic data in the first and second quarters of the next year.

In China, faced with constraints on private sector credit easing, the central government is increasing leverage to initiate credit easing for growth. First-tier real estate and reducing financing costs are considered options. The Chinese market is seen at a policy bottom, transitioning to an emotional and market bottom. Expectations of no interest rate increase and falling U.S. bond interest rates may drive a repair rebound, requiring more "symptomatic" policies.

The Sino-U.S. cycle may move from dislocation to resonance by 2025, influenced by macro cycles, supply chains, and external demand. Investment suggestions include prioritizing U.S. debt, followed by stocks and commodities. For the U.S., it is recommended to focus on debt, with an estimated 10-year U.S. Treasury bond center of 3.9%, falling gradually. U.S. stocks may experience initial decline and later rise, with attention to tightening pressures on earnings and liquidity. The dollar is expected to fluctuate within a reasonable range. China is gradually building a bottom, adopting a "picking up bargains" strategy and a "dumbbell" structure of offense and defense before more targeted policies are implemented.