Institutional Research

The report sees a Democratic House takeover as highly likely while the Senate remains competitive, with affordability and higher energy costs reshaping voter sentiment. Near-term equity resilience is supported by wealth effects, but elevated oil, tariffs, fiscal pressure and executive action create a more volatile post-midterm outlook.

• Speakers put the odds of a Democratic House takeover at 90%, while the Senate is increasingly a toss-up.
• US household net worth rose $13 trillion in 2Q and nearly $20 trillion over the past year, supporting consumer spending.
• Brent has moved into the $100-110/bbl range; sustained gasoline prices above roughly $4/gallon could offset much of estimated $150-160 billion household tax relief.
• A Democratic House would primarily increase oversight and investigations, while gridlock could leave executive actions as the dominant policy channel.
• AI regulation is unlikely to pass comprehensively before the election, but state and local restrictions on data centers are expanding.

JPMorgan expects China AI token consumption to rise about 60x from 2026E to 2030E, lifting industry operating profit from US$27bn to US$243bn. It favors Alibaba, Tencent and Zhipu as the value chain shifts from early hardware profits toward cloud and downstream monetization.

• China AI operating profit is forecast to reach US$243bn in 2030E from US$27bn in 2026E.
• Models and applications are forecast to contribute 64% of the increase in annual industry profit through 2030E.
• Downstream operating profit is expected to turn positive in 2028E at US$6.2bn.
• Alibaba, Tencent and Zhipu are JPMorgan's preferred exposures across infrastructure, applications and models.
• The report initiates SenseTime, Phancy and Xunce at Overweight; Meitu at Neutral.

Commercial banks added RMB857.4bn to bond custody in August, while overall bond-market growth slowed from July. UBS also highlights policy support for growth and expanded cross-border cash-pooling operations.

• Total bond custody rose RMB1.51trn month on month in August, RMB750bn less than in July.
• Commercial banks accounted for more than half of the increase with RMB857.4bn of net purchases, favoring rate bonds.
• PBOC Chair Pan Gongsheng said monetary policy would remain moderately loose.
• Foreign banks began nationwide centralized cross-border cash-pooling operations under the expanded framework.

Bernstein views Figure AI's Helix 2.5 as evidence that proprietary human-video data and integrated brain models are improving humanoid performance. The report stresses that 56% task success across unseen homes is meaningful progress, not proof of transferable zero-shot task capability or commercial readiness.

• Helix 2.5 completed three trained household tasks across 30 unseen homes with a 56% overall success rate.
• Index pretraining raised zero-shot success from 9% to 56% while halving the data needed to match Helix 02 performance.
• Bernstein argues that proprietary data and model-data integration are becoming a critical competitive moat.
• The next tests are transferable skills across related tasks and an efficient path from roughly 50–60% success toward 99% reliability.

Takeaways from Hong Kong Green Week and Hong Kong's First Five-Year Plan reinforce Goldman Sachs' preference for power and water infrastructure, adaptation, critical materials, automation and resilient supply-chain themes. The report highlights 24 APAC Buy-rated stocks linked to these themes.

• A 10% rise in global corporate inventory intensity or a 1% increase in gross fixed-asset intensity would each imply roughly US$400 billion of incremental investment, according to Goldman Sachs' sensitivity analysis.
• The report views resilience spending as structural, supported by geopolitical fragmentation, power demand growth and physical climate risks.
• India and Bangladesh reaching Thailand/Vietnam air-conditioning intensity would imply 46 TWh of additional electricity demand.
• Thematic funds recorded US$4.9 billion of inflows in 2Q26, led by US$7.3 billion into Climate Action funds.
• Revised EU ETS assumptions lower modeled 2034-37 CBAM charges by about 5%-8% for steel and 8%-10% for aluminium versus January 2026 assumptions, but do not remove long-term pressure.

The report argues that persistent trade surpluses are no longer being recycled into US dollar safe assets as reliably as under Bretton Woods II. This leaves more adjustment to market prices, supporting a stronger RMB alongside higher global yields and greater FX volatility.

• China’s official reserves stopped rising after peaking at USD4trn in 2014, but private-sector dollar recycling continued for years.
• Chinese firms shifted from net FX sales deficits to a USD222bn settlement surplus in H2 2025 and USD338bn in January-August 2026.
• Chinese banks’ dollar accumulation almost halted in Q1 2026, with only USD7bn of the USD131bn rise in external assets denominated in dollars.
• Korean and Taiwanese surplus recycling has increasingly favored US equities and non-Treasury assets rather than US government bonds.
• The institution expects trade imbalances to persist while the former stabilizing financing mechanism remains materially weakened.

UBS expects global AI data-center roll-outs to shift fibre demand from telecom-budget-driven to consumption-driven, keeping high-end fibre supply tight through at least 2027-28E. It reiterates Buy and top-pick status on YOFC-H, while maintaining Neutral on YOFC-A.

• The sector corrected 37% from its June peak amid peak-earnings and capacity-expansion concerns.
• UBS forecasts global fibre demand growth of about 11% CAGR in 2026-30E, with data centers contributing more than 45% of demand by 2030E.
• Data-center fibre demand is forecast to grow at a 37% CAGR in 2026-30E.
• Preform bottlenecks, equipment lead times and customer qualification should delay effective new supply.
• UBS expects fibre prices to keep rising through 2027E, though at a slower pace.
• YOFC-H trades at a 57% discount to YOFC-A; UBS expects the discount to narrow.

Consumer AI agents could make telecom bill switching and downgrades easier, adding pressure to already flat European mobile-service revenue growth. Morgan Stanley nonetheless argues that low European ARPUs, competitive markets, bundling and B2B exposure limit the sector-wide downside.

• The European telecom sector underperformed the wider European market by more than 4% over three trading days.
• European mobile-service revenue growth is trending at zero year on year, making incremental price pressure material for EBITDA through operating leverage.
• European mobile ARPUs of roughly €10-20 compare with about $50 in the US, reducing potential consumer savings and switching incentives.
• Higher-ARPU markets such as Switzerland and Norway appear relatively more exposed, while Italy and Germany appear lower risk.
• Bundled offers in Portugal and Spain and more complex B2B pricing provide relative protection.

Citi's survey of 103 warehouse-automation decision-makers indicates roughly 13% next-12-month spending growth, up from roughly 8% expected in the prior survey. The report sees a long runway for automation and identifies Symbotic as a key beneficiary.

• Respondents expect automation spending to rise roughly 13% over the next 12 months, versus roughly 8% in Citi's 2025 survey.
• More than 80% of respondents believe AI/GenAI can improve warehouse and fulfillment-center efficiency.
• Under 5% of respondents currently report automation above 80%, while more than 30% expect 50%-80% automation in the future.
• Budget constraints and technology complexity remain the principal barriers to automation adoption.
• Citi views Symbotic as a key beneficiary and maintains a US$70 target price based on roughly 82x FY27 adjusted EBITDA.

The report argues that WPS’s distribution, document context and enterprise workflow ownership position it to monetize AI through personal subscriptions, usage-based pricing and fast-growing WPS365. Its Rmb325 Dec-2027 target is based on 45x 2028E P/E.

• Personal revenue grew 15.2% YoY in 1H26, while paid individual users grew 15.4% versus 3.9% global MAU growth.
• WPS365 revenue rose 60.8% YoY to Rmb497mn in 1H26, sustaining more than 60% growth for six quarters.
• JPMorgan forecasts 2026-28E revenue 5%/11%/8% above consensus and core profit 10%/2%/2% above consensus.
• The Rmb325 Dec-2027 target uses 45x 2028E P/E, a discount to the company’s historical forward valuation range.