CITIC Securities: The probability of the Federal Reserve cutting interest rates has increased, which is beneficial for the home appliance export chain

According to the Zhitong Finance APP, China Merchants Securities released a research report stating that based on CME data, the market's expectation of a 25 basis point interest rate cut by the Federal Reserve at the September meeting surged from 37% the day before to over 80% after the release of the non-farm payroll data on August 1. The demand-side easing of the interest rate cut reduces the burden of home purchases, while the supply-side alleviates the "rate lock effect," thereby stimulating real estate transactions and a recovery in the demand for home appliances and tools in the post-real estate cycle. In Q1/Q2 of 2025, U.S. consumer spending on home appliances is expected to grow by 1.3%/1.7% year-on-year, and tools by +1.1%/+2.1%, continuing to recommend the export chain direction. The main viewpoints of China Merchants Securities are as follows: The market highly expects the Federal Reserve to cut interest rates in September 1) July non-farm employment data significantly revised down: In July 2025, non-farm payrolls increased by only 73,000, far below the expected 109,000; moreover, the data for May and June was significantly revised down, with a total reduction of 258,000, directly triggering a recession warning signal under the "Sam Rule." 2) Resignation of hawkish Federal Reserve members: The resignation of Federal Reserve Governor Adriana Kugler (a hawk who supports no rate cuts this year) on August 1 increased the political feasibility of an interest rate cut. 3) Side effects of Trump’s policies become apparent: The dual impact of geopolitical issues and tariff policies has suppressed consumption and investment demand, amplifying the risk of a "hard landing" in the economy, making the Federal Reserve more inclined to buffer external shocks through interest rate cuts. The Federal Reserve's interest rate cut is expected to drive the recovery of the U.S. real estate, home appliance, and tool industries The demand-side easing of the interest rate cut reduces the burden of home purchases, while the supply-side alleviates the "rate lock effect," thereby stimulating real estate transactions and a recovery in the demand for home appliances and tools in the post-real estate cycle. In Q1/Q2 of 2025, U.S. consumer spending on home appliances is expected to grow by 1.3%/1.7% year-on-year, and tools by +1.1%/+2.1%, continuing to recommend the export chain direction. Tools: CHERVON/GreatStar/Techtronic Industries and other garden tools/electric tools/hand tools are strongly correlated with the U.S. post-real estate cycle. The interest rate cut boosts existing/new home sales data, driving the release of terminal demand; additionally, after production shifts to Vietnam, the ability to pass on price increases to end consumers exceeds expectations. Black and white appliances: The black appliance market shows a trend of eastern rise and western decline, with TCL/Hisense targeting the high-end market, while Korean brands struggle. Behind this is the clearing of the upstream landscape of mainland Chinese panel manufacturers, the structural upgrade of MiniLED TVs, and the global loss of high-end discourse power. The white appliance sector focuses on brands represented by Haier, leveraging the advantages of local manufacturing in the U.S. to gain incremental market share and opportunities for overseas profit margin recovery. Cleaning: Brands represented by Roborock and Ecovacs are expanding overseas, with sweeping robots generally produced through outsourcing in Vietnam. Industry competition is easing, leading to performance reversals, combined with the layout of embodied intelligent robots opening up valuation space. Two-wheelers: Quality companies represented by Ninebot, Taotao, and Chunfeng focus on products like lawn mowing robots/golf carts/all-terrain vehicles, establishing overseas bases. Ninebot scooters are outsourced in Vietnam, Taotao is expanding in Vietnam/Thailand and the U.S., while Chunfeng is establishing a presence in Thailand/Mexico, effectively avoiding tariffs Risk Warning Political disturbances during the U.S. election cycle, repeated tariff negotiations, and exchange rate fluctuation risks, etc