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Market Overview
Today's market is volatile. The three major stocks have basically returned to the early stage of the rise. That means a forced rise of 0.13%, a drop of 500%, and a fall of 100%. In terms of blocks, only four blocks are rising today, and the rest are falling. Technology is rising 0.36%, while energy is falling 0.68%.
U.S. Senate and Federal Reserve
Today's most important issue is the U.S. Senate. How do officials view Trump's current tax inflation? What about the future downward trend? Do officials have differences? How does Powell describe the current economy? These questions were answered in this Senate.
Federal Reserve Statement
The U.S. Federal Reserve, as expected, did not move. It maintained interest rates at 4.25% to 4.5% unchanged and did not adjust the缩表. There are few changes in the entire statement. The biggest change is in the description of uncertainty and risk. The U.S. Federal Reserve believes that the uncertainty of economic prospects has decreased but is still high. It also deleted the words about higher unemployment rate and higher inflation risks rising.
The fallout was mainly to prevent the market from misreading as the risk was not higher than in May. Both are relatively positive signals, so the market rose when the statement came out.
Economic Forecasts and Indicators
In addition to the statement, there are economic forecasts and indicators, and the signals they release are not very positive. In the economic forecast, officials' expectations of GDP were further lowered, from 1.7% in March to 1.4%, reflecting pessimism about economic prospects.
However, officials don't think the unemployment rate will deteriorate. This time, the data only increased 0.1% to 4.5%. A higher expected unemployment rate means the United Nations will continue to maintain a leaning position to prevent labor market problems.
The inflation forecast is the most concerning. The PCE rose by 3%, 2.7% higher than in March. The core PCE was also up to 3.1%, 2.8% higher than in March. This shows officials' worry about tariff inflation.
Powell said that in April, officials found that tariffs were higher than expected and the scope was wider. Fortunately, the overall path is still high and low, and officials generally believe that next year's PCE will return.
Interest Rate Paths
In terms of interest rate paths, officials still maintain an open attitude towards a decline this year. The average is 3.9%, meaning there are two chances of a decline. But the interest rate expectations in the last two years have been adjusted.
Powell suggested not caring too much about the post-2020 election data as it's hard to predict, especially with high uncertainty. Comparing the March forecast, differences between officials have become more serious, which Powell admitted at the press conference.
Overall, although the average interest rate is still 3.9%, the distribution is more negative.
Uncertainty Survey
The uncertainty has decreased as stated in the statement, but the range is small. The blue pillar in the picture, representing the June survey result, is a little narrower than the March result, but not very obvious. The uncertainty of inflation has not changed, but the expectation of the range is a little weaker.
Press Conference
At the press conference, Powell can be described as not providing clear signals for investors. He repeatedly emphasized that the economy and interest rates are in a good position, and the United Nations can wait. This neutral and biased position shows that the current United Nations is willing to look at more data before taking action.
This further shows that the United States will take a post-pandemic strategy. An article by Nick, the founder of the United States, wrote that the conditions for continuing to decline are either to see the labor market further decline or to continue to see that tariff inflation is not so serious.
Tariff and Inflation Discussion
The first question at the press conference was about the U.S. Treasury's view of tariffs and whether it has been affected by recent mild data. Powell acknowledged the good performance of inflation data in the past few months but said the mildness was due to the further decline of service inflation. At the commodity end, inflation began to rebound, and officials expect it to continue due to tariffs.
The mild inflation data has not changed officials' expectations for tariff inflation. Powell stressed that the transfer of tariffs takes time. Now retailers may be selling storage before tariffs, and we have seen tariff inflation on computers and other items. Corporate investigations also show they want to transfer some or all tariffs, which will eventually be borne by consumers.
Powell continued to emphasize the uncertainty of tariffs and the need to be humble about prediction ability. He believes that after this summer, they will learn more about how inflation will affect tariffs, hinting that a rate cut in July is unlikely, which is in line with market expectations.
Global Fund Manager Survey
With the shutdown of tariffs on July 9, how is smart money set up? Today we update through the global fund manager survey of the US bank to answer questions like whether the institutional warehouse is enough, how it reacts to investment trends, what the best benchmark is, and where the biggest risk is next.
Market Sentiment Recovery
The latest survey by the U.S. Bank of America shows that global market sentiment is sharply recovering. All indicators are reversed, almost back to the state before Trump's announcement of tax relief. It's called the "golden-haired girl" multi-head state, indicating that investors' concerns about the red-light scene are clearly easing and the market is embracing the soft landing trend again.
The most representative is the decline in the cash collection ratio. The cash allocation ratio of issuers in June fell from 4.5% last month to 4.2%, with a two-month decline of 0.5%, the largest since December 2023. This shows that institutions are starting to buy back and risk bias is rising.
At the same time, the牛熊 index of each silver rose to 5.4, a three-month high. The overall mood index of fund managers rose from 0.8 to 3.3, the highest unit growth in the year. These data show that institutions' overall mood has changed from cautious and defensive to more neutral and optimistic. Managers' judgment of economic prospects is also more gentle, believing that the global economy will achieve the highest level since October 2024.
Economic Expectations
From the map, economic expectations in June and April form a clear contrast. Now it has basically recovered to the level before the same tariffs. Another indicator shows that the proportion of those who believe in a global decline is close to zero. In April, 42% more people believed in a rate decline in the next year than those who didn't, but now the situation has reversed, with 36% more people believing there will be no decline, reflecting less worry about economic hard landing.
Favorite Assets
Since institutions are gradually becoming optimistic, what do they most look forward to? From the asset category, the institutions that love global stocks the most think they will be the best asset in the next five years. The second is the US stock, then gold, and finally bonds.
The most important reason for managers to choose global stocks and gold is the structural recalibration of the US dollar. Trump's tax policy leads to global institutional investors rethinking the position of the dollar. They no longer think the US stock is the best choice. Also, the dollar is in a downward trend overall, with the Trump administration and the Fed's actions promoting dollar outflow and the international market.
There are also investors who believe the future supply chain will break down under the leadership of the United States, allowing overseas markets to benefit. The overseas market is now undervalued, and the valuation of the MSCI new market index is only 13.75 times, lower than the 21.6 times of the standard 500.
Crowded Transactions
Institutions continue to believe that more and more gold is the most crowded transaction at the moment, but the volume has declined compared to last month. The second is the seven major technology stocks, and the new one is shorting the U.S. dollar, reflecting the general shorting of the U.S. dollar since June.
Asset Allocation
In June, institutions flowed out of defensive pieces and the euro, mainly into the new market, stocks, and then into energy, banking, and industrial and other strong-term pieces. This reflects the improvement of managers' economic expectations and their shift to the rising cycle.
Market Outlook
Aji believes that the market is currently in a relatively optimistic state of loyalty. It's not a perfect buy-in opportunity, but it's not a dead end either. The optimistic expectation of the trade war is relatively sufficient. So if there is any risk in trade negotiations in the future, it will trigger market tension but not be as bad as April 2.
After the call between China and the United States, the risk of trade between the two countries has dropped. Now we need to pay close attention to the results of the negotiations between Japan and the European Union, which may lead to an external rise.
There are also many optimistic factors. In July, Trump's beautiful bill will likely become a law. Next, the focus of the market will turn to supervision and taxation. So, in addition to these multiple factors, U.S. stocks are still optimistic in the second half of the year.
Self-Driving News
Today's last news is about self-driving. In the afternoon, there were many news that all players are on the fast track, actively arranging self-driving. Will this threaten Tesla? How should investors look at the self-driving market?
Amazon's Self-Driving Plan
Amazon is trying its best to enter the self-driving track and is preparing to build a robot taxi near Havod, with an annual production of up to 10,000 robots. The plan directly challenges the industry vision.
Zoox's Robot Taxi Plan
Zoox's first robot taxi plans to land in Las Vegas by the end of this year, expand to San Francisco in 2026, and then enter cities such as Miami, Los Angeles, and Atlanta. Although Waymo had already invested in operation in Phoenix 5 years ago and began to collect taxes in San Francisco in 2023, accumulating more than 10 million payments, Zoox believes it still has a chance.
However, the timeline is a bit doubtful. Currently, Zoox can only produce one Robotaxi per day, but the company hopes to increase production capacity to 13 cars per hour in 2026 and achieve an annual production of 10,000 cars in 2027. If it only produces 10,000 cars in 2027, the speed may be too slow, and it may be difficult to squeeze in if all big cities are occupied by Waymo and Tesla.
Waymo's New York Plan
Waymo announced an unimaginable news. It plans to go on the road in New York, one of the most difficult places to drive in the United States. The traffic is dense, the road is complicated, the road line is unclear, and there are bicycles and tricycles. This shows the company's confidence in its autonomous driving.
Waymo issued a statement on the X platform, saying it has submitted an application to the New York City Transportation Bureau to plan automatic driving tests for security personnel on city roads, which is a key step in serving New York citizens in the future and an important point in Waymo's nationwide expansion strategy.
Currently, the company has been operating in San Francisco, Phoenix, Los Angeles, and Austin as a Robotaxi service. It also just announced that it will further expand its fleet in the Los Angeles metropolitan area and San Francisco Bay Area to improve its market position. But in terms of production capacity, Waymo is also weak. The latest plan is to expand its annual production capacity to 2,500 units, not comparable to basic and ordinary car manufacturers. Now it is working with car manufacturers like Fengtian, Geely, and Zeker to achieve efficient, customized production and solve production bottlenecks.
Tesla's Robot Taxi
After many years, on June 22 this year, Tesla's Robotaxi finally hit the road. There are many videos of Tesla's Robotaxi being tested on the Austin Road, and Tesla is promoting it on its X account to show confidence.
According to media reports, Tesla is expected to use a more advanced FSDV14 in the Opel Taxi version, with model parameters 4.5 times higher than the FSDV13 version used by current owners. But how advanced it is and whether V14 is at an L4 level or above can only be known after it lands and user feedback is received.
Self-Driving Market Analysis
Overall, self-driving is undoubtedly a huge market. In 2024, the total mileage of American public roads was 3.28 trillion miles. If each mile is calculated at $0.5, the entire market size will exceed $1.6 trillion. This doesn't consider new demand for cheap cars, so it's not strange that all kinds of players are entering the game.
This will be a win-win market. In a situation where security is almost the same, whoever offers faster and cheaper taxis will win the vast majority of users.
In terms of cost and expansion speed, Tesla has the biggest advantage. Once Austin is successfully verified, Tesla can quickly copy and invest tens of thousands of cars in every new city, with a lower price than Venmo or Zux, and quickly take over the market. The only concern at the moment is the safety of Tesla FSD and whether it is easy to copy. Gary Black, an institutional investor, thinks it's easy to copy, but the facts are more complicated. We need to give it time and let the results tell us the answer.
That's the end of today's news. If you think I did a good job, don't forget to like it. It's not easy to continuously output, and Aji needs your support. Thank you.
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