U.S. Market Instability: Missile Attacks and Economic Insights

The U.S. market turmoil stems from geopolitical tensions while economic indicators suggest stability ahead.

### U.S. Market Instability and Global Tensions
The U.S. market experienced instability today, with a **sharp decline in the stock market** and a **surge in the VIX index**. The JOLTS report showed an **increase in job openings**, while the ISM manufacturing PMI index indicated **continued contraction in the manufacturing sector**. Iran's missile launch towards Israel caused significant turmoil, leading to **U.S. military intervention** and impacting the **presidential election dynamics**.

### Long-Term Investment Perspective on the U.S. Economy
The focus is on long-term investments in the U.S., with a belief that the economy will **continue to grow at 2% to 3%** without a significant downturn. The current corporate performance is strong, and the leading indicators suggesting a recession are seen as **misleading**. Additionally, China's recent policy changes and the diversification of supply chains are noted as potential factors for **stabilizing the economy**.

### Lessons from COVID-19 and China's Economic Challenges
The pandemic has shifted companies' focus to **broader and diversified supply chains**, potentially impacting China negatively. Ray Dalio's concept of "**beautiful deleveraging**" emphasizes the need for China to **reduce its debt bubble** while managing economic risks. To avoid a long-term crisis similar to Japan's **lost decade**, China needs extensive reforms, including **debt restructuring for local governments**, tax system reform, and addressing **demographic issues**.

### President Xi Jinping's Approach and China's Economic Challenges
President Xi's statement on **no punishment for policy mistakes** encourages innovation and boldness. China's favorable debt leverage situation, with local currency-denominated bad debts and citizens as **debtors and creditors**, creates challenging conditions due to fragmented interests. The country's inflation rate peaked **above 10%** in 2022, but recent data shows a drop to **1.8%**, indicating a **global diminishing fear of inflation**.

### U.S. Market Turmoil Amid Global Tensions and Economic Insights
* 📉 Today, the U.S. stock market experienced **significant instability**, with sharp declines and a **soaring VIX index**, largely overshadowed by **geopolitical tensions**.
* 📊 The JOLTS report indicated a rise in job openings to **840,000**, an increase of **300,000** from the previous **771,000**, suggesting a **slight improvement in employment conditions**.
* 🏭 Conversely, the ISM manufacturing PMI index fell to **47.1**, indicating **continued contraction** in the manufacturing sector.
* 🚀 The market turmoil was exacerbated by Iran's missile launch towards Israel, which prompted a **strong U.S. military response**, although most missiles were **intercepted** and casualties were **minimal**.
* 🗳 In the political arena, Kamala Harris continues to lead in betting markets for the presidential election, with little change in her **slight advantage**.
* 💼 Larry Fink, CEO of BlackRock, emphasized that regardless of the election outcome, the U.S. economy is expected to **grow steadily at 2% to 3%**, dismissing fears of a recession.
* 🇨🇳 Meanwhile, Ray Dalio discussed the need for China to undergo "**beautiful deleveraging**," focusing on **reducing debt while ensuring economic stability** through government intervention.
* 📉 Lastly, recent data shows a decline in global inflation fears, with Europe's CPI aligning closely with the U.S. CPI, now reported at **1.8%**, reflecting a broader trend of **diminishing inflation concerns**.

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