Sou Hu Cai Jing·2025-12-30 14:16Core Viewpoint - The report from Guotai Junan suggests that the Federal Reserve's expected interest rate cut and unexpected expansion of its balance sheet may reduce policy uncertainty and market volatility for investors, indicating potential opportunities in global equities and commodities, with a recommendation to overweight risk assets in January [1] Asset Allocation Recommendations - The suggested asset allocation is as follows: 50.00% in equities, 35.00% in bonds, and 15.00% in commodities [1] - For January 2026, the recommended equity allocation is 47.50%, with specific allocations of 10.00% in A-shares, 10.00% in Hong Kong stocks, 17.50% in U.S. stocks, 2.50% in European stocks, 5.00% in Japanese stocks, and 2.50% in Indian stocks [1] Factors Supporting Equity Performance - Multiple factors are expected to support the performance of Chinese equities, with a recommendation to overweight A/H shares. The upcoming economic work conference and the start of the 14th Five-Year Plan in 2026 are anticipated to lead to further expansion of the fiscal deficit and more proactive economic policies. The Federal Reserve's December interest rate cut and the stable appreciation of the RMB are seen as favorable conditions for monetary easing in early 2026, while reforms are expected to boost market risk appetite in China [1] - The "Goldilocks" scenario is emerging, which is favorable for U.S. stock performance. Although the U.S. economy is showing signs of marginal cooling, its resilience remains, and the gradually weakening inherent inflation may support corporate earnings expectations, potentially driving U.S. stock indices higher [1]