Core Viewpoint - The report from Huatai Securities indicates that the "spring excitement" may start earlier in mid to late December, suggesting a balanced allocation between growth and cyclical assets. In the medium term, large financials and certain high-value consumer stocks may still be the foundational choices for the revaluation of Chinese assets [1]. Group 1: Market Environment - The funding environment has improved due to the revival of expectations for interest rate cuts by the Federal Reserve and the effective pricing of domestic fundamentals [1]. - The scale of net outflows from foreign capital has narrowed, and there has been a recovery in ETF issuance and subscriptions [1]. - The adjustment of risk factors in insurance may further open up space for insurance capital to allocate to equity assets [1]. Group 2: Sector Performance - Recent improvements in the TMT (Technology, Media, and Telecommunications) sector and upstream resources have been notable, with significant increases in their performance [1]. - Key areas of focus include the AI supply chain, price increase chains, capital goods, consumer goods, and infrastructure chains [1].

Core Viewpoint - The overall industry prosperity index continued to decline in October, but the rate of decline has slowed, with essential consumption, midstream manufacturing, and large financial sectors showing significant improvement [1] Industry Analysis - **AI Chain Deepening**: The prosperity of storage, communication equipment, and software is on the rise, while components and consumer electronics may experience a high-level decline [1] - **Price Increase Chain**: Benefiting from global fiscal and monetary easing, as well as domestic anti-involution policies, sectors such as non-ferrous metals, coal, certain chemicals, and renovation materials are seeing a recovery in prosperity [1] - **Capital Goods and Intermediate Products**: Industries like batteries, photovoltaics, and engineering machinery are experiencing a rebound in prosperity [1] - **Consumer Goods**: The prosperity of dairy products and cosmetics is recovering from the bottom [1] - **Independent Prosperity Cycles**: Sectors such as pharmaceuticals, military industry, and insurance are witnessing a recovery in prosperity [1] Investment Strategy - A short-term barbell strategy is recommended, balancing investments across growth, cyclical, and dividend sectors, focusing on those with improving prosperity, sustainable potential, and relatively low valuations [1] - After the gradual digestion of technology crowding pressure, there may be opportunities for recovery, particularly in non-ferrous metals, chemicals, new energy, general automation, storage, military industry, and insurance [1] - Additionally, early positioning in certain consumer and service sectors, such as dairy products, is advised [1]

1. Report Industry Investment Ratings - No specific industry investment ratings are provided in the report. 2. Core Views of the Report - The stock market is recommended for a dumbbell - style allocation, while the bond market is expected to be in a weak and volatile state [2][3]. 3. Summary by Relevant Catalogs 3.1 Market Views 3.1.1 Stock Index Futures - **Market Conditions**: On Thursday, the Shanghai Composite Index continued to reach a 10 - year high, with the price - rising chain actively advancing. Power equipment, non - ferrous metals, and basic chemicals led the gains, driven by factors such as increased demand for lithium batteries from energy storage, policy support for new energy integration, and a rebound in international precious metal prices. The preferred allocation of the price - rising chain is gradually being realized, and the cost - effectiveness of value factor allocation has increased [3][7]. - **Data**: IF, IH, IC, IM's current - month basis points were - 8.47, - 1.07, - 19.89, - 24.58 respectively, with changes of - 7.57, - 3.56, - 0.64, 3.6 points compared to the previous trading day; their inter - period spreads (current - month - next - month) were 16.6, 3.8, 66.4, 87.6 points, with changes of - 0.4, - 0.2, - 2.4, - 0.8 points; and their positions changed by - 13919, - 1167, - 19353, - 20677 lots respectively [7]. - **Operation Suggestion**: Hold a combination of dividend ETF and IM long positions [7]. 3.1.2 Stock Index Options - **Market Conditions**: After the market recovered, the trading volume of each option variety showed a slight weakening trend. The weighted implied volatility of CSI 1000 index options decreased by 1.18%, and the position PCR of each variety strengthened, indicating a warming of market sentiment. However, from a weekly perspective, the varieties were weak first and then strong, still at a weekly high. Due to the recent rotation of market styles and the lack of a clear capital main line, it is recommended to continue to hold covered options to increase returns [3][7]. - **Operation Suggestion**: Continue to hold covered options [7][8]. 3.1.3 Treasury Bond Futures - **Market Conditions**: On the previous day, treasury bond futures fell across the board. The T, TF, TS, and TL main contracts changed by - 0.10%, - 0.08%, - 0.01%, and - 0.26% respectively. The bond market was weak, affected by the rebound of the A - share market and the rebound of commodity - related varieties. The overnight shibor rate was 1.3150%, down 10.00 basis points, indicating relatively abundant market liquidity. The central bank achieved a net injection of 9.72 billion yuan through 19 billion yuan of 7 - day reverse repurchase operations, which helped to stabilize market expectations. However, the bond market interest rate rose, and the decline of treasury bond futures may be mainly due to the improvement of market risk preference. Currently, after the treasury bond trading, the bond market has been in a volatile state, and the focus of market speculation is when and how the redemption new rules will be implemented [4][8]. - **Data**: Data on trading volume, inter - period spreads, cross - variety spreads, and basis points of T, TF, TS, and TL contracts are provided, along with their daily changes [8]. - **Operation Suggestion**: For trend strategies, expect a slightly stronger and volatile trend; for hedging strategies, pay attention to long - position substitution at high basis levels; for basis strategies, focus on positive arbitrage strategies and basis widening; for curve strategies, appropriately pay attention to curve steepening [9]. 3.2 Economic Calendar - Economic data such as China's new RMB loans, social financing scale, M2 money supply growth rate from January to October 2025 are presented, along with predicted and actual values. Data for China's October social consumer goods retail总额 annual rate and above - scale industrial added value annual rate are yet to be released [10]. 3.3 Important Information and News Tracking - The central bank announced that in the first 10 months, RMB loans increased by 1.497 trillion yuan, and the social financing scale increment accumulated to 3.09 trillion yuan, with a year - on - year increase of 383 billion yuan. M2, M1, and M0 data are also provided [11]. - The Financial Regulatory总局 will release a revised "Management Measures for Commercial Bank Merger and Acquisition Loans" to support corporate mergers, acquisitions, and transformations. It is also researching policies to promote the high - quality development of science and technology insurance [12]. - US President Trump signed a federal government temporary appropriation bill, ending a 43 - day government shutdown [12].

Core Viewpoint - The report from Huatai Securities indicates that the A-share market experienced a volatile upward trend last week, led by manufacturing and cyclical sectors, while technology stocks continued to adjust [1] Group 1: Market Trends - Historically, the third phase of an upward market is often driven by earnings, suggesting a potential shift from a liquidity-driven market to a fundamentals-driven market since the "924" event last year [1] - After the third quarter reports, the market's earnings perspective is shifting towards next year, with advanced manufacturing actively restocking, domestic consumption transitioning from active destocking to passive destocking, and cyclical sectors attracting early investment [1] Group 2: Economic Indicators - High-frequency data indicates that signs of economic improvement are primarily concentrated in the AI supply chain, price increase chain, capital goods, and consumer goods [1] - In the short term, a "barbell" investment strategy is maintained, with potential recovery in technology stocks after the pressure from overcrowding is alleviated, and continued investment opportunities in dividends [1] - Additionally, sectors such as new energy and chemicals, which have favorable economic logic, are highlighted as relatively low-positioned investment options [1]