ab 24 February 2025 Global Research First Read Apple Inc. $500B in investments in the US over 4 years? Call us a skeptic We think Apple's supply chain and financial model raises doubts around the $500B Apple announced it plans to spend and invest more than $500 billion in the US over the next four years including the hiring of around 20,000 people, of which the vast majority would be focused on R&D, silicon engineering, software development and AI/ML. While the headline figure on the surface is a large numb ...

Summary of Key Points from the Conference Call Industry and Company Overview - The document primarily discusses the implications of macroeconomic factors on equity markets, Treasury yields, and European defense spending strategies, with a focus on the U.S. financial system and European geopolitical dynamics. Core Insights and Arguments Treasury Yields and Equity Performance - The correlation between equity prices and nominal Treasury yields has recently trended negative, indicating a regime shift in market behavior. The critical level for U.S. Treasury 10-year yields (UST 10Y) remains at 5%, but recent trends suggest negative equity reactivity at lower yield levels (~3% UST 10Y) due to a transition from a low yield/low inflation environment to a moderate yield/high inflation context post-COVID [5][16][18]. - Core CPI moderation over the last two years suggests that 5% UST 10Y remains a headwind for equities, but if core CPI were to reflate, negative yield/equity correlation could occur at sub-5% UST 10Y yields [5][16][18]. - The current negative yield/equity correlation presents an opportunity for hedging against recession scenarios, with specific strategies recommended for equity and bond positioning [5][16]. Supplementary Leverage Ratio (SLR) Relief - Anticipated SLR reforms under the Trump administration could reduce the minimum requirement for U.S. Global Systemically Important Banks (GSIBs), potentially creating about $6 trillion in incremental leverage capacity. This could support bank demand for Treasuries and widen swap spreads [5][19][21]. - SLR relief may also enhance dealer repo intermediation capacity but could reduce the value of central clearing, shifting focus towards margin cost reduction [5][20]. European Defense Spending Strategy - Europe's defense spending is currently low and inefficiently allocated, with national competencies leading to fragmented decision-making. A proposed increase in euro area defense spending from approximately 2% to 3.5% of GDP by 2035 could boost GDP by 1.6 percentage points compared to a no-increase scenario [6][24]. - The anticipated increase in defense spending would require careful consideration of public finances and government securities issuance, with expectations for flexible EU fiscal rules and potential redirection of unused EU funds towards defense [6][24]. - A well-designed pan-European solution for defense spending that promotes R&D and resource reallocation is deemed more effective than merely reforming fiscal frameworks for national increases [6][24]. Additional Important Insights - The document highlights the potential for a significant shift in European defense policy due to geopolitical pressures, including Russian aggression and competition from China, necessitating a reevaluation of security and defense strategies [6][24]. - The upcoming German elections are viewed as a critical moment for Europe, with potential implications for fiscal policy and defense spending, which could affect market sentiment and investment flows [6][34][35]. This summary encapsulates the key points discussed in the conference call, focusing on the implications of macroeconomic trends on equity markets, the anticipated regulatory changes affecting banks, and the evolving landscape of European defense spending.

Asia Economics Comment Economics Tariff cascade in action Asia Facts On 20 February 2025, Korea announced provisional anti-dumping tariffs (27.91% to 38.02%) on Chinese steel plates used in shipbuilding and construction, set to take effect after the finance ministry approves. 1 On 21 February 2025, Vietnam announced temporary anti-dumping tariffs (up to 27.83%) on hot-rolled steel products from China for 120 days, from 7 March 2025. 2 According to media reports from 23 February 2025, US trade officials urge ...

Global Research ab 24 February 2025 China Property 2025 NPC preview: Execution of existing measures We expect a similar policy stance as September 2024 We expect National People's Congress (NPC) meeting, starting on 5 March, may follow the policy set in late September 2024, ie: 1) property market stabilisation; 2) ensuring housing delivery; 3) increasing social housing supply; 4) promoting inventory and idle land buybacks; and 5) the establishment of a new model for real estate development. We analysed mult ...

ab 24 February 2025 NIC pre-reported revenue, EBITDA & ending cash at their Dec-Q production update (link); the key incremental information from today's result included 1) the $204m impairment for HNI & RNI and 2) dividend of ~A1.5cps with DRP overlay. We refine our modelling assumptions around RKEF output and ENC ramp-up, taking into account the tentative commodity outlook with the market still in oversupply and (non- nickel) LFP batteries continuing to eek share from ternary batteries. This sees us downgr ...

Asia Pacific Equity Research 24 February 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. CATL Overweight "America First Investment Policy" implication Price: Rmb275.55 On February 21, 2025, the White House issued the America First Investment Policy Memo ...

ab 25 February 2025 Global Research First Read Japan Electric Components Sector Feedback from Asian investor trip We visited investors in Hong Kong and Singapore From 17-20 February, we visited investors in Hong Kong and Singapore and had the opportunity to participate in 28 meetings. Cautious views on the electronic components sector predominated throughout 2024. On this visit, there was still a strong sense of caution, but we could detect expectations, albeit slight, regarding a cyclical recovery and edge ...

Asia Pacific Equity Research 24 February 2025 China Cross-border Ecommerce Takeaways from expert call on the impact from new US tariff policies Andre Chang, CFA AC (86-21) 6106 6362 andre.ch.chang@jpmorgan.com SAC Registration Number: S1730520080002 Alex Yao (86 21) 6106 6505 alex.yao@jpmorgan.com SAC Registration Number: S1730523020001 J.P. Morgan Securities (China) Company Limited See page 3 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and see ...

February 26, 2025 INDUSTRY UPDATE On Jan 27, 2025, DeepSeek released R1, its LLM model that directly competes with OpenAI's o1 model in performance, although at a materially lower cost structure (if press reports are accurate). Like DeepSeek-V3, the R1 model has 671 billion parameters with a context length of 128,000. The release of DeepSeek-R1 resulted in downward pressure on many US tech stocks, owing to: RELEVANT DISCLOSURES BEGIN ON PAGE 346 OF THIS REPORT. Portfolio Strategy Artificial Intelligence Gen ...

24 February 2025 Equity Research Report China Technology Equities Servers: Riding on the wave of DeepSeek DeepSeek is driving Cloud capex in China. AI inferencing workloads have been surging, triggered by the growing popularity of DeepSeek R1 in recent weeks. We see that individual user demand has been growing, and the AI model has been increasingly deployed by enterprises and government entities. DeepSeek R1 model's innovations in algorithm reduce inferencing costs sharply and also lead to much less comput ...