Core Viewpoint - The A-share market has been on the rise, with the Shanghai Composite Index closing above 3600 points on July 24, reflecting a rebound of over 16% since its year-to-date low in early April. In contrast, the bond market is experiencing significant adjustments, leading to a "stock-bond seesaw" effect driven by liquidity changes rather than traditional growth expectations [1][2]. Group 1: Stock Market Performance - The stock market has shown strong performance, with the Shanghai Composite Index reaching 3600 points, indicating a notable recovery since April [1]. - The rise in the stock market is attributed to strong performance in cyclical sectors, particularly driven by bank stocks and small-cap stocks [7]. Group 2: Bond Market Adjustments - The bond market has faced rare adjustments, with significant declines in various government bond futures, including a 0.92% drop in the 30-year bond contract [1]. - A large number of medium- and long-term pure bond funds have reported declines, with 2905 out of 3182 funds experiencing downturns during the week of July 21 to July 23 [2]. - The bond market's recent adjustments are linked to concerns over rising commodity prices and tightening short-term liquidity as the month-end approaches [2]. Group 3: Fund Redemption Trends - There has been a notable occurrence of large redemptions in bond funds, with over ten funds announcing significant redemptions to ensure net asset value accuracy [3][4]. - Despite the redemption trends, some fund managers indicate that the overall impact on the bond market is limited, as the majority of investors remain stable in their allocations [3]. Group 4: Liquidity and Market Dynamics - The current "stock-bond seesaw" is primarily driven by liquidity rather than economic growth expectations, suggesting a unique market dynamic compared to typical scenarios [6][7]. - The bond market is expected to see increased allocations from institutional investors following adjustments, indicating a potential for rebound opportunities [6][7].

Core Viewpoint - Under the backdrop of normalized global geopolitical risks, weakened dollar credit system, and rising economic uncertainty, gold has emerged as a "yardstick" for measuring asset value [1] Asset Performance - Since March 2018, only a few cryptocurrencies have recorded positive returns when priced in gold, while other asset classes have generally underperformed [2] - The report highlights that the performance of cryptocurrencies is driven by payment convenience, technological innovation premiums, and supply scarcity, particularly Bitcoin's halving mechanism, which reinforces its "digital gold" status [4] - Equity assets have shown nominal growth but remain weak when priced in gold, primarily relying on liquidity injections, with a peak growth rate of 26.7% in the US M2 money supply [4] - Real estate in the US and India has underperformed relative to gold, despite benefiting from economic resilience and demographic dividends [4] Industry Performance - All major industries have underperformed gold since 2018, but resource sectors and new momentum industries, such as high-dividend coal and banking, have shown relative strength [6] - New momentum industries, represented by electric new energy and TMT, have outperformed traditional sectors like real estate [7] - In the secondary industry, precious metals have been the standout performer since 2018, with emerging technologies like semiconductors outperforming traditional tech [8] Style and Strategy - Small-cap stocks have emerged as the absolute winners, with the micro-cap index outperforming gold since 2018 due to a reverse investment mechanism, low valuations, and liquidity premiums [10][13] - The report indicates that small-cap factors have significantly outperformed gold, while large-cap stocks have lagged, reflecting a preference for emerging small-cap industries [14]

Core Viewpoint - The market is shifting from risk-driven to liquidity-driven, with personal investors benefiting the most from indices like the North Securities 50 and micro-cap stocks as tariff easing is fully priced in [1][2]. Market Dynamics - Economic pressures are emerging, and the difficulty of U.S. interest rate cuts is increasing. The market has fully priced in expectations of tariff war easing, and the recovery of growth sectors driven by rising risk appetite is nearing its end. The lowest point of the current export chain's price increase was on April 9, with an acceleration phase starting in late April. The current pressure comes from rising U.S. inflation, which, alongside tariff-related disturbances, is expected to exert upward pressure on inflation into the second quarter of 2025 due to rising housing prices and manufacturing recovery [2]. Participant Structure Changes - There is a notable return of speculative funds, regaining pricing power as implicit risks like tariffs have materialized. In mid to late May, the market will shift from risk appetite improvement to liquidity-driven dynamics. Monitoring models indicate that speculative trading began to bottom out in late April, with significant non-linear characteristics observed in market capitalization, where large-cap indices like the Shanghai Composite and micro-cap stocks are leading gains, while mid-cap indices are lagging [3]. Financial Sector Outlook - The financial sector, which has been long undervalued, is expected to see a recovery. Public fund positions in the consumer sector have increased from 11.46% to 15.65% since the lowest point on March 4. However, their holdings in the financial sector remain low at 5.57%, with banks at 3.31% and non-banks at 1.75%. Despite this, the public fund regulations limit significant reductions in the already underweighted financial sector. The financial sector is favored by the market due to its valuation gap, and various factors are expected to contribute to its recovery, which will likely exhibit a stepwise characteristic [4].