一、Macro Review: Policy uncertainty returns, and the Fed turns to a "wait-and-see stance"
The minutes of the FOMC meeting released by the Federal Reserve on May 28 showed that policymakers' assessment of the current economic situation has become more cautious, with the core reasons coming from the recent increase in tariffs, rising global trade uncertainty and the resurgence of inflation risks.
Although GDP growth and labor market performance remain strong, the Federal Reserve pointed out that trade policies may continue to have a negative impact on total demand, thereby compressing potential GDP growth and amplifying the output gap.
The Federal Reserve's internal forecast shows that the actual GDP growth forecast for 2025-2026 has been lowered, and the unemployment rate will exceed the natural unemployment rate and continue until 2027. This means that the current monetary policy path may remain the same for a longer period of time, and the market's optimistic expectations for interest rate cuts this year need to be re-examined.
二、Market focus events: Nvidia's financial report and the dual signals of Sino-US technology decoupling
On the day the FOMC meeting minutes were released, AI chip giant Nvidia is about to release its financial report, with the market expecting revenue of US$43.2 billion and earnings per share of US$0.75. However, what is more worthy of attention is the management's prediction of the prospects of the Chinese market.
Jensen Huang pointed out in Taiwan that Nvidia's market share in China has dropped from 95% to about 50%. In the context of Trump's tariff return, the H20 chip ban may lead to potential revenue losses of up to $5.5 billion.
Combining the minutes and corporate feedback, the technology sector and export-dependent companies face dual risk exposure:
1. Tariff policies increase valuation pressure
2. Geopolitics affects the company's mid-term earnings guidance
三、 Investment inspiration and diversified allocation suggestions
1️⃣ Fixed income: Maintain duration neutrality and avoid credit deterioration risks
⦁ It is recommended to continue to deploy high-rated government bonds, especially medium-term US bonds, to hedge the valuation compression caused by higher risk premiums.
⦁ High-yield bonds need to remain vigilant, especially corporate bonds that are sensitive to global demand.
2️⃣ Stocks: AI growth remains attractive, pay attention to risk hedging
⦁ Although AI infrastructure (such as NVIDIA and TSMC) faces export pressure in the short term, the long-term trend remains strong. It is recommended to reduce the allocation of China's AI supply chain and turn to the local computing power and semiconductor ecosystem in the United States and Europe.
⦁Defensive sectors return to the field of vision: medical, energy, and utilities sectors provide stable cash flow in the global turmoil.
3️⃣ Alternative assets and gold:
⦁In the environment of geopolitical and monetary policy uncertainty, allocate a portion of gold spot or ETF to hedge inflation and risk aversion demand.
⦁Infrastructure and sovereign cloud projects are still the direction of medium- and long-term value allocation.
四、 Linkage market outlook:
⦁The stock market should enter a high-oscillation mode, and economic policy uncertainty has reduced the value assessment of individual stocks for related expectations.
⦁Securities of British companies and technology companies will face the risk of global black and tax pressure.
⦁Because the main hot spots in most markets in Asia-Pacific are currently concentrated in AI equipment and network infrastructure, the head-to-tail effect of British companies needs to be matched by the expansion of economic fundamentals.
五、 Investment thinking
1. Decentralized land functions are expected to become a new asset theme: Due to the chaos brought about by economic and trade policies, we are still optimistic about the first-tier economic industries and directional assets in the international financial market.
2. Advanced manufacturing and national security-related industries are expected to move rigidly: including AI network containers, equipment applications, and integrated engineering of remote regional integration under the momentum of the Fed's economic loading.
3. Investment targets under environmental changes should use expected emotions to consider cost-effectiveness to respond to sudden adjustments, rather than just focusing on relative measurements.
六、Outlook Summary
In this FOMC meeting, the Fed showed outstanding policy patience and a high sense of responsibility, but the prominent economic strategy has changed market expectations.
Driven by the uncertainty caused by the global market outlook, economic differentiation and actual politics, we recommend that investors grasp the balance ability in the adjustment and make active choices through time and geographical dispersion and asset type distribution.
The core signal released by the FOMC meeting minutes is that patience is more important than action. The Fed is not in a hurry to raise or lower interest rates, but waits for the policy chain effect to emerge more clearly. This attitude is suitable for the asset allocation pattern of "high volatility and low growth".
As the core of the productivity revolution, AI does not change its structural opportunities in the short-term fluctuations. Investors need to more clearly identify risk exposure and find a balance between safety margin and growth engine in a diversified portfolio.
Our outlook: Fintech, multilateral trade model maintainers, and hierarchical security information infrastructure are expected to become summer investment themes.
📌 Recommended next steps:
⦁ Pay close attention to the updates on the China-US and Europe-US trade agreements in early June
⦁ Track the forward guidance of manufacturing, technology and export companies in the US stock earnings season in June
⦁ Pay attention to the specific statements of Federal Reserve officials on the labor market and service inflation