The current market presents potential "torn" characteristics: from CPI to the latest PPI and retail data, foreign media continue to release optimistic expectations of "stable economy, mild inflation, and favorable interest rate cuts".
But it is worth noting that public opinion generally avoids two key risks:
Possible data distortion: The mild performance of CPI and PPI may be due to the lag in the transmission effect of tariffs, rather than the cooling of real inflation;
Stagflation concerns intensify: The weak PPI and retail data and the decline in demand for the service industry are accumulating stagflation risks. At the same time, the 10-year US Treasury yield hovers at 4.5%, and the 30-year yield soars to 5%, and the bond market risks are looming.
Is market public opinion trapped in the "political correctness" vicious circle? -- By rendering "economic resilience" to maintain sentiment and guide retail investors to take on high risk exposure in US stocks? Judging from the current market trend, funds do not seem to buy into this narrative.
