GF SECURITIES: Transitioning from a rate hike cycle to a rate cut cycle, optimistic about the upward trend in global manufacturing investment

According to the Zhitong Finance APP, GF Securities has released a research report stating that it is optimistic about the upward trend in global manufacturing investment and recommends focusing on overseas resource products, industrial products in Europe and the United States, consumer products in Europe and the United States, and supply chain companies. (1) Resource products are assets with global pricing power, such as oil and gas, marine engineering, mining, and shipbuilding sectors; (2) Industrial products are assets that continuously increase their share overseas, such as construction machinery, forklifts, and high-end machinery; (3) Consumer products are resilient assets under the backdrop of interest rate cuts, with American hand tools significantly outperforming furniture and home appliances during the last interest rate cut cycle; (4) Companies deeply involved in the global industrial supply chain.

GF Securities' main viewpoints are as follows:

The global economy is transitioning from a rate hike cycle to a rate cut cycle

(1) United States: According to the latest forecast from Fed Watch in September 2025, the Federal Reserve is expected to cut interest rates three times from September to December 2025; (2) Europe: According to Wind, from June 2024 to June 2025, the European Central Bank has cut interest rates consecutively eight times; (3) Developing countries: In 2025, China, South Africa, India, Mexico, and Turkey have all entered a rate cut cycle.

Manufacturing reshoring and re-industrialization in Europe and the United States lead to expansion

(1) Global: In August, the global PMI reached a 14-month high, with 18 out of 33 sample countries showing PMI growth, particularly strong performance in Southeast Asia, Europe, and the United States. (2) Europe: Germany's fiscal stimulus has shown significant results; according to S&P Global data, Germany's manufacturing PMI rose above the 50 mark for the first time in August; from the PPI breakdown of the 27 EU countries, industries such as machinery and metal manufacturing are expanding. (3) United States: The U.S. is promoting manufacturing reshoring through external tariffs and internal tax cuts, significantly driving construction spending; the previous manufacturing reshoring focused on technology sectors like semiconductors, while this round emphasizes traditional industries like metal manufacturing.

U.S. inventory levels are at historical lows, and the restocking cycle has begun

According to Wind, U.S. manufacturing passively restocked in 2022-2023 due to declining demand, and in 2024, it began actively destocking, with demand reaching its lowest point; destocking has continued for 20 months. (1) By upstream and downstream, retailers have destocked most thoroughly, and a restocking trend has begun to emerge, with retail restocking driving passive destocking in manufacturing and wholesale sectors. (2) By industry, based on the inventory-to-sales ratio and new orders in various U.S. machinery sub-industries, those in an expansion phase include construction machinery > industrial machinery > air conditioning and refrigeration equipment > turbines and generators. (3) On a micro level, U.S. excavator sales are rapidly recovering against a backdrop of weakness in infrastructure and real estate, confirming the restocking trend; industrial products show stronger resilience and sustainability with weaker volatility; active destocking in consumer products has basically ended, but restocking has not yet begun, with consumer products being more sensitive to interest rates and showing greater recovery elasticity and stronger impulses.

Risk Warning: Trade friction risks; macroeconomic risks; intensified competition risks