Zheshang Securities(SH:601878) ZHESHANG SECURITIES·2025-11-07 11:55Group 1: Market Dynamics - The equity market can temporarily operate independently of the real economy due to policies, liquidity, and market sentiment, but long-term sustainability requires fundamental support[1] - Historical analysis shows that markets can deviate from fundamentals during specific periods, but ultimately return to fundamental values[1] - In the 2003-2005 bear market, despite strong GDP growth (cumulative increase of 69% from 2001 to 2005), the Shanghai Composite Index fell from 2245 points to 998 points, indicating a significant disconnect between market performance and economic growth[9][11] Group 2: Policy and Economic Conditions - The 2014-2015 bull market was driven by loose monetary policy and capital market reforms, despite weak economic fundamentals, with the A-share market rising by 52% in 2014[22][25] - In 2025, the market is expected to experience a "technology bull" phase, driven by structural transformation and risk preference improvements, despite potential challenges from US-China relations[35] - The report anticipates that by 2026, "extraordinary counter-cyclical policies" may gradually decline, focusing on high-quality development, while still supporting a bull market driven by risk preferences[35] Group 3: Risk Factors - Potential risks include unexpected US-China tensions that could disrupt market risk preferences, and external trade pressures that may lead to preemptive domestic demand policies[37] - A shift in monetary policy towards tightening could significantly suppress market liquidity, negatively impacting the bull market environment[37]