Oriental Fund Management released a statement saying that economic activity is better than expected, the development of artificial intelligence is booming, and with substantial corporate profits, the performance of US large-cap stocks in the first half of the year is significantly ahead of other US markets. Looking ahead, the upward trend is expected to expand, but it will not develop in a linear manner, but will rise in multiple stages. After the release of the July Consumer Price Index, the chance of a Fed rate hike in September has increased, thus showing early signs of stock market rotation, creating opportunities for underperforming categories and sectors (small-cap stocks, Europe, and Japan). Profit trends and the following themes have now become crucial: It is expected that the US economy will slightly slow down in the second half of the year. Economic data and surveys also reflect this trend. The main features of economic slowdown include labor market readjustment, worsening consumer spending, and a noticeable gap between wealthy and low-income consumers. There is limited room for monetary policy errors. Premature rate hikes could lead to a resurgence of inflation, while delaying rate hikes could lead to a significant increase in future rate hikes. Therefore, central banks such as the Fed, the ECB, and the Bank of England are currently maintaining patience, making decisions based on economic data. Oriental Fund Management believes that the current situation supports a trend of slowing inflation. Excessive use of public funds and massive government debt will affect interest rates. As the US prepares for elections, discussions on the long-term impact of deficit spending on borrowing costs are expected to intensify. To promote self-sustaining economies and domestic economic growth, Europe may need to increase investments within the region. Oriental Fund Management believes that returning to basics, paying attention to valuations, and maintaining investment discipline are crucial. Some categories in major markets are overheating, and when triggering factors (slower growth, liquidity crisis, earnings below expectations) emerge, market trends could plummet. Therefore, investors should differentiate between categories with high valuations and those expected to continue growing. The following are the summary of Oriental Fund Management's four major investment views: Cross-assets: Risks from the US elections and additional fiscal spending may impact medium- to long-term bond yields. Therefore, Oriental Fund Management continues to have a positive view on the survival of US and European fixed income, but slightly adjusts its stance. Following the inauguration of Mexico's new president, Oriental Fund Management downgraded its view on Mexican bonds, but overall remains slightly positive on emerging market bonds. With growing divergences in the stock market, Oriental Fund Management is now bullish on Japan. It remains slightly positive on the US, European small caps, and the UK, but has adjusted its views slightly and is positive on the improving domestic economy in the UK. Finally, due to escalating geopolitical tensions and continuous demand for gold, Oriental Fund Management is also bullish on gold. US and European inflation data support rate hikes, therefore Oriental Fund Management continues to be positive on US Treasury bonds and UK government bonds. Oriental Fund Management slightly favors core European markets and maintains an active management stance. In the case of Japan, closely monitor the remarks of the Bank of Japan, the current stance is neutral. US Treasury inflation-protected securities also have long-term investment value. Quality remains a focus for credit, Oriental Fund Management believes that investment-grade bonds in the US and Europe are preferable to high-yield bonds. Although it remains slightly positive on European investment-grade bonds, it has slightly lowered its view to reflect strategic market changes. Some categories in the US stock market are highly valued, but valuations need driving factors to materialize. Therefore, Oriental Fund Management remains cautious on overvalued categories and prefers equally weighting the US market, value stocks, and high-quality stocks. In Europe, Oriental Fund Management maintains a barbell strategy focusing on defensive stocks and quality cyclicals driven by major trends such as energy transition and electrification. Strong domestic demand and changes in the Fed's stance support the outlook for emerging markets. Oriental Fund Management is particularly bullish on hard currency and local bonds, as well as countries with attractive real yields, such as India and Brazil. In terms of stocks, they are bullish on the stock markets of South Korea, India, Brazil, and South Africa.