Investment Guide for the Second Quarter of 2025: Opportunities and Challenges in the Global Market Amidst Turbulence

 

In the current context of profound adjustments in the global economic landscape, the investment market is fraught with uncertainties. The 2025 Second Quarter Investment Strategy Report released by the Research Institute of China Merchants Bank serves as a guide, helping investors navigate through the fog.

 

I. Overseas Economy: A Diverging Market with a Weakening US and a Strengthening Europe

 

Although the US economy has seen a marginal restoration of its endogenous momentum, the concern of "stagflation" persists. The corporate sector has expanded its investment, yet household consumption remains sluggish. Under the impact of tariffs, the economic slowdown is spreading from households to enterprises. The Federal Reserve has reaffirmed the "transitory inflation theory," but its subsequent actions remain to be seen. Moreover, the fiscal tightening is adding more pressure to the economy. In contrast, Europe has restarted its fiscal policies, with positive economic expectations, and the European Central Bank may pause its interest rate cuts in April. In Japan, the wage increase in the 2025 "Shunto" negotiations reached a 33-year high, strengthening the positive "wage - price" cycle and gradually opening up room for interest rate hikes.

 

II. Overseas Investment Strategies: The Bond Market is Favored, and the Stock Market is Volatile

 

The US stock market has declined overall due to a downward economic outlook, uncertain trade policies, and AI competition. Although its valuation has dropped, the adjustment is not yet over, and a balanced allocation is recommended. US bond yields are expected to fluctuate widely, with medium - and short - duration US bonds showing distinct advantages. In the foreign exchange market, the US dollar is unlikely to weaken trend - wise; the euro will trade in a range; the yen needs to be vigilant against the risk of position adjustments; and the British pound is showing signs of negative factors due to fiscal and inflationary pressures. The gold market is overheating, so investment requires caution. Crude oil and copper prices have the potential to rise, influenced by supply and demand factors respectively.

 

III. China's Macroeconomy: A Smooth Start with Policy Support

 

China's economy has started smoothly with the support of policies, showing highlights in the restoration of domestic demand, supply, and asset prices. Fiscal policies are proactive with room for further adjustment, and monetary policies are "moderately loose," reiterating the option of "opportunistically reducing reserve requirements and interest rates." In the real economy, the economy in January - February presented the characteristics of domestic demand recovering better than external demand, supply recovering better than demand, and asset price restoration preceding commodity price restoration. Fiscal and monetary policies work in concert to inject impetus into the sustainable growth of the economy.

 

IV. China's Investment Strategies: A Balanced Approach between Stocks and Bonds to Seize Structural Opportunities

 

In the fixed - income market, interest - rate bonds fluctuate under the influence of the economic fundamentals, and the 10 - year Treasury bond yield may fluctuate between 1.8% and 2.0%. The yield of credit bonds also oscillates, and the credit spread has room for compression. Investors can allocate short - term bonds, pure bonds, and fixed - income plus products according to their needs. In the equity market, the A - share market will be volatile throughout the year, and a balanced allocation of technology, consumption, and dividend sectors is recommended. Although Hong Kong stocks rose at the beginning of the year, they will face a bumpy and volatile market in the future, and a long - term balanced layout of technology and dividend assets is advisable. The RMB exchange rate is affected by tariffs and interest rate differentials, and changes in tariff policies need to be closely monitored in April.

 

V. Special Topic: New Opportunities for Hong Kong Stocks

 

The divergence between Hong Kong stocks and A - shares is due to the revaluation of technology stocks driven by DeepSeek. Hong Kong stocks have the potential to become the "Oriental Nasdaq" as their technology stocks perform well in terms of quantity, quality, and price. Additionally, Hong Kong stocks have obvious advantages in terms of systems and internationalization, and also enjoy central policy support. If it can maintain its development momentum, the future of Hong Kong stocks is promising.

 

In the second quarter of 2025, the investment market presents both opportunities and risks. Investors need to keep a close eye on market dynamics, allocate assets rationally, and move forward steadily in the global economic tide. However, given the volatility of the market, investment decisions must be made with caution. If necessary, it is advisable to consult professionals.