2025-06-14-Jefferies-杰富瑞宏观周报——良性通缩与恶性通缩_12页_214kb

JefMacro Weekly Summary—Good Deflation & Bad Deflation

Core Content Overview

This report discusses the current macroeconomic and market outlook, focusing on the implications of deflation in China, the Fed's policy stance, the USD trend, and investment strategies across global and regional markets. It also touches on geopolitical risks, credit market dynamics, and the impact of potential US legislation on foreign investment.

Main Points and Key Information

1. Investment Strategy in China Equities

• Deflationary backdrop suggests a risk parity strategy is appropriate for investors unless the PBOC adopts unorthodox monetary policies (no signs of this).
• For investors unable to use fixed income as a hedge, a barbell strategy of growth stocks and dividend plays remains viable.
• Chinese banks have performed well due to their dividend yields (around 5.3%), which are attractive to domestic institutions like life insurance companies.
• The Chinese stock market is believed to have made a major bottom in September 2024, despite ongoing deflation and weak domestic demand.

2. Fed Policy Outlook (Tom Simons)

• The Fed meeting is expected to show no significant changes in policy, with no rate cuts anticipated this year.
• The dot plot of rate expectations will likely remain unchanged, with the median rate cut expected in 2025 at 3.875%.
• Inflation and labor market data have not changed the Fed's cautious stance, and no conflict in the dual mandate is expected.
• Dovish guidance may be present, but policy expectations are unlikely to shift significantly.

3. Geopolitical Risks and USD Trend (Brad Bechtel)

• Geopolitical tensions, particularly in the Middle East, have caused short-term volatility in the USD, but the long-term trend remains downward.
• The USD may stabilize temporarily due to market uncertainty from the conflict, but the overall direction is still lower.
• High-beta currencies and carry-related currencies saw increased demand before the Friday risk-off.

4. APAC Market Outlook (Desh Peramunetilleke)

• MSCI APxJ has shown positive performance when the DXY (US Dollar Index) declines, and negative performance when it rises.
• China and Korea outperform when the USD weakens, while Japan, Malaysia, Indonesia, and India underperform.
• Materials, discretionary retail, cap goods, and media sectors in APAC are likely to outperform, while defensive sectors like telecom and utilities may underperform.
• Country rankings are updated: Overweight on China, Korea, and Hong Kong; Neutral on India, Singapore, and Australia; Underweight on Taiwan, Indonesia, Thailand, and the Philippines.
• Earnings growth expectations for MSCI AsiaxJ are 10.8% for 2025 and 12.4% for 2026, but the model estimates are 7.1% and 7.5%, respectively.

5. Credit Market Dynamics (Sherif Hamid)

• Geopolitical risks are back in focus, particularly after Israel's attack on Iran, which has impacted commodity prices and market volatility.
• Credit spreads are at negative valuations, suggesting a risk/reward imbalance.
• Technical flows have been positive across credit markets, with $2.3bn into IG, $1.1bn into HY, and $354mm into Leveraged Loan funds.
• Private debt AUM has increased significantly, shifting capital from public markets to private debt.
• Treasury yields are relatively high, while corporate credit spreads are tighter than expected, which may limit spread widening in the near term.
• The report suggests staying small short on risk and small long on rate duration due to the Fed's slow policy response and geopolitical uncertainty.

6. Gold and Gold Mining Stocks

• Gold prices have remained above $3,000/oz, entering a consolidation phase.
• Gold mining stocks have underperformed gold ETFs this year, indicating distrust in the rally's sustainability.
• Gold mining companies may benefit from rising profit margins in the near term due to stable gold prices and lower input costs.

7. US Market Outlook (Steven DeSanctis)

• The small-cap market has shown resilience, with growth stocks leading the way.
• Industrials and Financials are favored, while M&A activity has increased, especially in small-cap deals.
• Energy remains a growth focus, with Natural Gas showing long-term potential.
• Earnings growth is expected to be conservative at 4% for small caps, but higher sales growth names may outperform if the forecast is exceeded.

8. Section 899 Legislation (Aniket Shah)

• Section 899 (Revenge Tax) could impose a tax of <20% on foreign income from US assets, potentially discouraging foreign investment.
• The provision has strong momentum in the House, but faces procedural hurdles in the Senate.
• If passed, it may lead to asset depreciation and capital outflows from the US.

Summary of Key Metrics

Final Notes

• The report emphasizes the dual nature of deflation in China: good deflation driven by productivity and bad deflation from weak consumer demand.
• Geopolitical tensions are likely to elevate short-term volatility but not change the long-term USD trend.
• Credit markets are supportive due to net supply and technical flows, but spread valuations are negative.
• Small-cap stocks and growth strategies are favored, with Financials and Industrials showing strength.
• Section 899 could have significant implications for foreign investment in the US.