Sou Hu Cai Jing·2025-11-17 00:40Core Insights - The report from CICC highlights four key factors that could potentially alter the bullish trends of stocks and gold by 2026, including economic growth shifts, tightening policies, high valuations, and geopolitical shocks [1][2]. Group 1: Key Factors - Economic Growth Shift: Current weak recovery in China and a potential stagflation in the U.S. could change if policies lead to better-than-expected economic recovery, which may extend the stock bull market but negatively impact gold [1]. - Tightening Policies: Both China and the U.S. are currently in a loose policy environment. However, if the Federal Reserve slows down interest rate cuts due to inflation concerns, or if China's incremental policy pace slows, it could negatively affect both stock and gold bull markets [1]. - High Valuations: Chinese stocks are reasonably valued, but both gold and U.S. stocks are facing high valuation pressures, which could pose risks [1]. - Geopolitical Shocks: Unexpected geopolitical events could prolong the gold bull market but may adversely affect the stock bull market [1]. Group 2: Investment Recommendations - Asset Allocation: The company recommends an overweight position in Chinese stocks and gold, a standard allocation in U.S. stocks and bonds, and an adjustment of commodities to standard allocation while reducing Chinese bonds to underweight [2][3]. - Chinese Stocks: Benefiting from the AI technology wave and ample liquidity, Chinese stocks are seen as having reasonable valuations. Despite potential year-end volatility, there are no signals indicating a market peak, thus maintaining an overweight position is advised [3]. - U.S. Stocks: While the bullish logic applies to U.S. stocks, concerns over high valuations and low elasticity during a dollar depreciation cycle suggest a standard allocation is more prudent [3]. - Commodities: Commodities are recommended to be adjusted to standard allocation as they can hedge against changes in gold and stock trends while benefiting from post-liquidity recovery [3]. - Gold: Gold is expected to benefit from the Federal Reserve's easing cycle and monetary order reconstruction, but due to high valuations, an overweight position is suggested with a focus on buying on dips rather than chasing prices [3].