Shang Hai Zheng Quan Bao·2025-11-18 02:26Core Viewpoint - The Chinese stock market and gold are expected to maintain an upward trend in 2026, driven by the AI technology wave and macroeconomic factors, despite potential risks from liquidity and policy changes [1][2]. Group 1: Chinese Stock Market Analysis - The Chinese stock market experiences more frequent cycles of upward and downward movements compared to the US market, making the identification of market tops more critical [1]. - Current economic conditions indicate that China is in a recovery phase with low inflation and stable growth, suggesting no immediate need for policy tightening [1]. - The profitability growth of the CSI 300 index is recovering from low levels, with a forward P/E ratio of 12.6, which is below historical market peak valuations [1]. - Concerns about liquidity are present, but there are no clear signals indicating a market peak based on economic and policy factors [1]. Group 2: Gold Market Analysis - Gold's market top is easier to predict than that of stocks, largely due to its strong correlation with Federal Reserve policies [2]. - The outlook for gold in 2026 will depend on four key factors: economic growth shifts, tightening policies, high valuations, and geopolitical shocks [2][4]. - Long-term trends suggest a structural increase in gold valuations due to declining dollar credibility and geopolitical uncertainties, with potential for gold prices to exceed $5,000 per ounce if current trends continue [4]. Group 3: Asset Allocation Recommendations - The company recommends an overweight position in Chinese stocks and gold for the first half of 2026, while maintaining standard allocations in US stocks and bonds, and adjusting commodities to standard allocation [4]. - The macro liquidity environment is expected to remain generally loose, supporting the market, while the AI industry trend will continue to bolster A-shares [4]. - For bonds, the risk-reward ratio is declining relative to other assets, suggesting a downgrade from standard to low allocation, focusing on short to medium duration, high coupon varieties [5].