Equity Research
China: US tariffs on China jump to 125%; Lowering real GDP growth forecasts
On April 9th, President Trump announced a further increase in the tariff rate on imports from China to 125%, following the Chinese government's increase of tariffs on US goods to 84%. Although additional tariff increases are likely to have a diminishing marginal impact, the substantial rise in US tariffs on China is expected to significantly weigh on the Chinese economy and labor market. We anticipate the Chinese government will further intensify policy easing, projecting 60bp of policy rate cuts (vs. 40bp previously) and a 4.1pp expansion in our estimate of the “augmented fiscal deficit” this year (14.5% of GDP, up from 10.4% in 2024). We are revising our real GDP growth forecasts for 2025 and 2026 downward to 4.0% and 3.5%, respectively, from our previous projections of 4.5% and 4.0%.
10 April 2025 | Research | Economics - Andrew Tilton and others
Global Markets Comment: Too Early for the "All Clear" (Wilson/Chang)
Yesterday's rally sharply reversed the downgrade to the market's growth pricing since April 2. Substantial relief was warranted, and our estimates now suggest that markets have effectively moved to price something close to our baseline forecast. But that suggests there is little discount for what we still believe is a 45% risk of recession over the next 12 months, leaving markets vulnerable to any sign that recession may be coming.
10 April 2025 | Research | Economics - Dominic Wilson and others
Global equities have experienced significant volatility, with MSCI World and S&P 500 seeing a large drawdown and a rebound following a 90-day tariff pause announced by President Trump yesterday. The equity drawdown has been among the sharpest in the last century, partially due to strong performance leading up to the tariff announcement. Our equity drawdown risk framework (which combines sentiment, valuations, macro momentum, and the risk regime) has been pointing to high downside risk since January. The probability of a further sell-off recently went above 35%, driven by deteriorating macro momentum, higher policy uncertainty and worsening risk regime metrics.
10 April 2025 | Research | Economics - Christian Mueller-Glissmann, CFA and others
USA: President Trump Announces 90 Day Pause; Reverting to Our Previous Non-Recession Baseline
President Trump has announced a 90 day pause on the additional country-specific portion of the “reciprocal” tariff. This leaves in place all prior tariffs and the 10% minimum portion of the reciprocal tariff, and we continue to expect additional sector-specific tariffs. Together, these tariffs are likely to sum to something close to our previous expectation of a 15pp increase in the effective tariff rate. As a result, we are reverting to our previous non-recession baseline forecast with GDP growth of 0.5% and a 45% probability of recession.
9 April 2025 | Research | Economics - Jan Hatzius and others
The EM Trader: Pricing Trade War and Peace
EM local rates have been able to sustain their rally through a volatile week, despite the sell-off in USTs. But even as the reciprocal tariffs are postponed and some near-term reversals are occurring, we think prohibitive tariffs on China and an increase in policy uncertainty are likely to weigh on global growth pricing moving forward.
10 April 2025 | Research | Economics - Kamakshya Trivedi and others
Global Markets Daily: Making Sense of the Moves in Treasury Yields
Amid rising recession risks and the sharp drawdown in risk assets, the breakdown in the typical relationship of lower yields and lower risk assets in these risk-off periods has become increasingly extreme. In today's Daily, we assess the drivers of this relative weakness in Treasuries.
9 April 2025 | Research | Economics - Bill Zu and others
WEBCAST REPLAYS
Research Unplugged: Bear Market Anatomy – the path and shape of the bear market
Tariffs and Markets: Our View from DC and the Trading Floor
Cross Asset Strategy: Risk Appetite Collapse
Global Markets: Trading the Trade Policy Agenda
Research Unplugged: GOAL Asset Allocation: An overview of our core views across assets
Bond Market & Cross Asset Views
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Richful (300910.SZ): Import substitution back in focus; Up to Buy
We view Richful as a key beneficiary of rising import substitution opportunities in China's specialty chemical space, particularly in light of the recent escalation in US-China trade tensions. Within China chemicals/advanced materials we cover, lubricant additives is the only product where China still has a sizable net import position and significant reliance on US supply. We expect Richful to expand its domestic market share, potentially more than doubling it in the next 3 years to 13.5%.
With the recent escalation in US-China trade tension, we highlight Weichai as a key beneficiary of the potentially accelerating import substitutions in high-end engines and major agricultural commodities (Weichai to benefit via its agricultural equipment business) where China has a net import position against the US. The company's recent announcement to list its agricultural equipment subsidiary (Weichai Lovol - China's largest ag equipment manufacturer by revenue) in H-share could potentially help crystallize the value of this business and the SoTP upside (see our SoTP analysis in our recent deep-dive report). Reiterate Buy.
China Industrials | Hong Kong
10 Apr 2025 | Research | Equity - Nick Zheng, CFA and others
- Company HighlightsAlphabet Inc. (GOOGL): Google Cloud Next 2025: Continued Enhancements to AI Solutions with a Focus on Agents & Open/Multi-Cloud Capabilities11 Apr 2025 | 12:41am| 8pg| Research | Equity-Eric Sheridan and othersShanghai Jahwa United (600315.SS): Early stage of turnaround story; Attractive risk reward post de-rating and expectation reset; Upgrade to Buy10 Apr 2025 | 7:47pm| 23pg| Research | Equity-Cathy Chen, CFA and othersFast Retailing (9983.T): Earnings Review: Above expectations; results confirm underlying strength, guidance raised; Buy10 Apr 2025 | 10:07pm| 8pg| Research | Equity-Sho Kawano and othersAtlassian Corp. (TEAM): Platform proposition centered on AI, increased engagement, and wall-to-wall expansion: Team '25 Takeaways10 Apr 2025 | 11:54pm| 10pg| Research | Equity-Kash Rangan and othersHong Kong Exchanges (0388.HK): Five positives to offset a volatile macro; maintain Buy10 Apr 2025 | 6:28pm| 19pg| Research | Equity-Gurpreet Singh Sahi, CFA and othersWalmart Inc. (WMT): Long term algorithm still on track; reiterates FY25 guide despite uncertainty; and U.S. e-commerce is profitable - Reiterate Buy10 Apr 2025 | 1:04pm| 9pg| Research | Equity-Kate McShane, CFA and others
- Industry HighlightsMacau Gaming: 1Q25 preview: Steady industry GGR and profitability. Sands' GGR share remained soft. MLCO/Wynn performed better. Stress test on GGR downside11 Apr 2025 | 1:51am| 12pg| Research | Equity-Simon Cheung, CFA and othersAmericas Technology: IT Services: Read-across from ISG Index & TCS results: Macro uncertainty drives muted forecasts11 Apr 2025 | 1:12am| 5pg| Research | Equity-James Schneider, Ph.D. and othersAmericas Energy Services: Lowering Activity Views, But See Increasing Potential for Mean Reversion Given Strong Pullbacks; Buy FTI10 Apr 2025 | 6:40am| 9pg| Research | Equity-Ati Modak and othersEurope Branded Consumer Goods: Luxury Goods: Navigating Uncertainty: Examining Historical Cycles Amid Recessionary Concerns10 Apr 2025 | 5:19am| 13pg| Research | Equity-Louise Singlehurst and othersAmericas Utilities: 1Q Preview: Focus on earnings/capital plan execution amid macro uncertainty; Buy FE10 Apr 2025 | 10:07am| 18pg| Research | Equity-Carly Davenport and othersGS Travel Tracker: Connecting the dots across the travel ecosystem11 Apr 2025 | 4:26am| 33pg| Research | Equity-Ben Andrews, CFA and others
- PORTFOLIO STRATEGYUS Sector Views: Our sector model's updated recommendations are selectively defensive11 Apr 2025 | 5:30am| 10pg| Research | Portfolio Strategy-Ryan Hammond and othersEquity Strategy: Navigating a Bear Market [PRESENTATION]10 Apr 2025 | 10:51pm| 19pg| Research | Portfolio Strategy-Peter OppenheimerStrategy Espresso: Europe equities and the US Bear8 Apr 2025 | 12:01pm| 12pg| Research | Portfolio Strategy-Sharon Bell and others
- OPTIONSWeekly Options Watch: Retail and Options Positioning in Stocks with Trade Policy Uncertainty9 Apr 2025 | 5:00pm| 11pg| Research | Options-John Marshall and othersMacro Catalyst Reactions (8-Apr-2025)8 Apr 2025 | 10:08pm| 1pg| Research | Options-John MarshallCross-asset Dislocations (8-Apr-2025)8 Apr 2025 | 8:17pm| 1pg| Research | Options-John Marshall
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