Report Summary 1. Investment Rating of the Reported Industry The report does not provide an explicit investment rating for the non-ferrous metals industry. 2. Core Views of the Report - **Copper**: In 2026, LME copper prices are expected to show a trend of "trend - driven increase led by supply - demand gap + phased fluctuations driven by funds". The price center is likely to rise, with an expected annual average of around $11,500/ton, a high of over $13,500/ton, and a low of around $10,000/ton. Domestic copper prices are predicted to be relatively stable, ranging from 82,000 yuan/ton to 108,000 yuan/ton [7][158]. - **Aluminum**: Alumina is expected to remain in an oversupply situation in 2026, with a price range of 2,000 - 2,900 yuan/ton. Electrolytic aluminum prices are likely to rise, with a price range of 20,000 - 28,000 yuan/ton [165][167]. - **Nickel & Stainless Steel**: In 2026, the supply - demand surplus of nickel is expected to increase, with a price range of 100,000 - 130,000 yuan/ton. Stainless steel prices are expected to be in the range of 11,500 - 13,500 yuan/ton [288]. 3. Summary of Each Section Copper - **2025 Price Review**: LME copper prices fluctuated with an upward - moving center, ranging from $8,105.5/ton to $11,334/ton, with an annual average settlement price of about $9,834/ton, a 5.6% increase from the previous year. SHFE copper prices ranged from 71,320 yuan/ton to 89,920 yuan/ton, with an annual average settlement price of 80,485 yuan/ton, a 5.5% increase [7][10]. - **2026 Market Analysis**: - **Macro - environment**: The global macro - environment will feature "loose monetary policy + stable growth", providing a foundation for high - level copper prices. The first half of 2026 offers more opportunities, while risks may emerge in the second half [153]. - **Fundamentals**: Supply - side disturbances will persist in 2026, especially in the first half. Demand is expected to grow in multiple areas. The distorted global visible inventory structure may further magnify the impact of the supply - demand gap [155][156]. - **Funds**: Loose liquidity, a tight supply - demand balance, and inventory structure issues will prompt overseas speculative funds and the industrial sector to drive copper prices upward. However, excessive price fluctuations may lead to regulatory measures [158]. Aluminum - **Alumina** - **2025 Review**: Alumina prices fluctuated due to domestic supply disturbances and overseas policy sentiments, with an initial sharp decline, followed by rebounds and subsequent declines [172]. - **2026 Outlook**: The supply side will face long - term domestic ore restrictions, increasing dependence on imported ores, and uncertain shipping schedules. The demand side will be supported by the high - base and capped electrolytic aluminum production capacity, and the export window is expected to remain open. The cost side will limit the downward price movement. Overall, alumina will remain in an oversupply situation, with a price range of 2,000 - 2,900 yuan/ton [164][165]. - **Electrolytic Aluminum** - **2025 Review**: Electrolytic aluminum prices remained high and stable in the long - term, with short - term fluctuations driven by Sino - US tariff policies [175]. - **2026 Outlook**: The supply side will see a shift towards a pattern of decreasing domestic production and increasing overseas production. The demand side will experience a demand structure adjustment, with the focus shifting to policy - driven sectors. The cost side will see a long - term low electricity price center, and the cost structure may be reshaped. The overall price is expected to rise, with a range of 20,000 - 28,000 yuan/ton [166][167]. Nickel & Stainless Steel - **2025 Price Review**: Nickel prices fluctuated widely in Q1, weakened in Q2, oscillated horizontally in Q3, and rebounded in Q4. Stainless steel prices mostly followed nickel prices [286][290]. - **2026 Supply - Demand Pattern** - **Global Primary Nickel Supply**: In 2025, global primary nickel supply increased by 8% to 3.81 million nickel tons. In 2026, it is expected to increase by 7% to 4.085 million nickel tons, with an increasing supply - demand surplus [287][410]. - **Nickel Ore**: Indonesia adjusted its nickel ore policies, and the actual release of nickel ore quotas in 2025 was less than expected. In 2026, quotas are expected to narrow [287][309]. - **Class I Nickel**: The domestic Class I nickel market faced a situation of slow - expanding supply and weak demand, with an increasing surplus. Globally, the supply increased while the demand remained stable, also leading to an increasing surplus [287][336]. - **Class II Nickel**: The market share of domestic and overseas enterprises in the Class II nickel market has been squeezed by Indonesia. Most planned projects have been suspended or postponed. The stainless - steel demand lacks bright spots [287]. - **Nickel Salt**: Cobalt prices and new capacity drove the accelerated production of MHP, while the production of high - grade nickel matte slowed down. The profit of nickel sulfate is expected to be suppressed by rising raw material prices and weakening demand [287]. - **Valuation and Price Outlook**: Nickel prices are expected to be in the range of 100,000 - 130,000 yuan/ton, and stainless - steel prices are expected to be in the range of 11,500 - 13,500 yuan/ton [288].

Group 1 - The article discusses the significant impact of US-China geopolitical competition on global capital markets, highlighting the contrasting roles of the US as a mature stock market and China as an emerging market [3][7]. - The US initiated a trade war and tariff battle, which has led to substantial declines in the US stock market, particularly affecting major technology stocks [5][6]. - The TACO trading strategy emerged as a response to the cyclical nature of Trump's tariff threats, allowing investors to buy during market panic and sell when policies soften [5]. Group 2 - China has implemented strong countermeasures in response to the US's trade actions, including a series of measures to stabilize its capital market, such as providing sufficient re-lending support from the central bank [6]. - The article outlines the historical context of financial crises triggered by US trade wars in other countries, emphasizing that only China has effectively countered the US's trade aggression [6]. - The US financial market faces severe challenges, including extensive money printing by the Federal Reserve, which has led to a balance sheet of $9 trillion due to quantitative easing [9]. Group 3 - The US has experienced a significant increase in fiscal deficits and national debt since 2008, with the national debt reaching approximately $37 trillion by September 2025 [10]. - The article notes that the US capital market is overvalued, with the overall market P/E ratio exceeding 20, and specific indices like the S&P 500 and Nasdaq showing even higher ratios, indicating potential risks for a market correction [11]. Group 4 - China's stock market is evolving towards long-term and value investing, with a series of measures introduced to boost market confidence and stabilize valuations [12]. - The article categorizes China's initiatives into three phases: initial measures to boost market activity, quantitative support for high-quality economic development, and encouraging state-owned enterprises to invest in blue-chip stocks [13].

Group 1 - The dollar's status as a safe haven is weakening, with the dollar index dropping over 7% since the beginning of 2025 due to market concerns [1] - The "Sell America" narrative is gaining traction as Trump's policies may exacerbate the U.S. deficit, leading to a downgrade in the U.S. credit rating by Moody's and a sell-off in U.S. bonds, with the 30-year Treasury yield briefly surpassing 5% [2] - Tesla's stock experienced volatility, soaring to a historic high of $488.5 after Musk endorsed Trump, but later plummeting due to declining delivery numbers and subsequent public fallout [3] Group 2 - The term "TACO" (Trump Always Comes Out) has gained popularity in financial markets, reflecting the belief that Trump often delays the implementation of proposed tariffs, allowing Wall Street to buy on dips [4] - Trump's favorable stance towards the cryptocurrency sector, including the consideration of establishing a Bitcoin reserve, has contributed to a surge in the total market value of cryptocurrencies, which first surpassed $4 trillion in July, with Bitcoin reaching a record high of $126,000 in October [5] - Geopolitical tensions and Trump's attacks on the independence of the Federal Reserve have fueled global demand for safe-haven assets, driving gold prices to new highs and boosting silver and other precious metals [6] Group 3 - The U.S. stock market has experienced significant volatility since Trump's election, with the S&P 500 index rising 18%, while the "Big Seven" tech companies accounted for over half of the market's total gains, leaving other sectors struggling [7] - Trump's push for energy independence, encapsulated in the slogan "Drill, Baby, Drill," led to a national energy emergency declaration and pressure on OPEC+ to increase production, resulting in international oil prices hitting a four-year low [8] - Concerns over Trump's threats to withdraw from NATO and reduce aid to Ukraine have prompted significant increases in military spending and infrastructure investment in Europe, leading to a surge in European defense stocks [9]

Core Insights - The article discusses the significant shifts in the global financial landscape following Trump's return to the presidency, highlighting the rise of Bitcoin as a key asset in a world of increasing uncertainty [1][5][15] Group 1: Market Dynamics - Since Trump's re-election in November 2024, global financial markets have experienced unprecedented volatility and revaluation, with the dollar, gold, and Bitcoin all rising sharply [5] - The U.S. government's trade restructuring and fiscal stimulus have led to increased national debt and inflation expectations, impacting investor behavior [5][14] Group 2: Bitcoin's Role - Bitcoin's price surge is seen as a reflection of macroeconomic changes rather than mere speculation, with its potential integration into the global financial system being a focal point [7] - Experts suggest that Bitcoin is emerging as a "neutral digital reserve asset" amid intensifying currency wars and a deepening U.S. debt crisis [7][15] Group 3: Traditional Assets - Gold has reached a historical high of $4,381 per ounce, while the dollar has seen a cumulative decline of approximately 4% post-election [9][10] - The simultaneous rise of gold and Bitcoin is interpreted as a strategy for diversified risk management within the dollar system, rather than an indication of the dollar's collapse [10] Group 4: Stock Market Trends - The global stock market has set new records, driven by the AI boom and expectations of interest rate cuts, despite initial volatility caused by tariff announcements [11][12] - Since the election, the MSCI global index has risen over 20%, with the S&P 500 gaining 17%, indicating a recovery in investor confidence [13] Group 5: Debt and Trade - The fiscal expansion under Trump has pressured global bond markets, with 30-year U.S. Treasury yields rising to 4.66%, reflecting concerns over public finance sustainability [14] - Trade policies have successfully reduced the U.S. trade deficit, with the overall deficit dropping to $60.2 billion, the lowest in two years, and the deficit with China decreasing by 70% [14]

Market Overview - The Shanghai Composite Index successfully crossed the 4000-point mark, supported by the central bank's bond purchases, leading to an unexpected rise in short-term bonds [1] - The A-share market saw a significant increase, with the Wind All A Index rising by 1.16% and a trading volume of 2.29 trillion yuan, an increase of 125.4 billion yuan compared to the previous day [1][3] - The recovery in the market is underpinned by easing tensions in US-China relations, which has reduced the pressure on risk appetite [1][3] Industry Performance - As of October 29, 4241 companies have disclosed their Q3 reports, showing a 9.23% year-on-year growth in net profit for the Wind All A Index, with a 10.01% growth excluding financial and oil sectors [3] - Notably, the technology sector has shown impressive performance, with the Wind AI Computing Index and Semiconductor Index reporting year-on-year net profit growth of 56.51% and 66.68%, respectively [3] - The energy storage index and SW non-ferrous metals index also reported significant growth in net profit, at 37.66% and 34.28%, respectively, indicating a strong recognition of these sectors' industrial trends [3] Structural Risks - The market's significant rise has led to the emergence of structural risks, with the concentration of trading volume reaching 44.89%, nearing historical highs [4] - The proportion of stocks trading above their 95% historical percentile is at 17.62%, exceeding the historical average of 15%, suggesting potential volatility if the upward momentum is disrupted [4][6] Bond Market Dynamics - The bond market is experiencing a tug-of-war over interest rate pricing, with short-term bonds benefiting from strong buying interest, particularly from major institutional investors [7][8] - Following the central bank's announcement to restart bond purchases, short-term bond yields have declined, while long-term yields have shown mixed performance due to risk appetite factors [8][9] Commodity Market Insights - The commodity market has seen a significant inflow of funds, with a net inflow of 6.5 billion yuan into precious metals, indicating a stabilization after previous declines [10] - Industrial metals have performed well, with copper and aluminum prices rising by 1.16% and 0.35%, respectively, driven by improved risk appetite following positive signals in US-China relations [10][11] - The "anti-involution" theme has gained traction, particularly in polysilicon and coking coal, with significant price increases observed in these sectors [11][12]

Report Industry Investment Rating - The report provides a bias for various varieties, with "偏空" (Bearish) and "偏多" (Bullish) ratings for different financial and commodity instruments such as stock indices, bonds, and commodities [4]. Core Viewpoints - The "15th Five - Year Plan" focuses on economic growth within a reasonable range, improving total factor productivity, and enhancing residents' consumption rate [6]. - The central bank will implement a moderately loose monetary policy, aiming to consolidate the positive momentum of the capital market and improve market - stabilizing mechanisms [7]. - Different commodities have their own market drivers and trends. For example, gold is influenced by factors like geopolitical risks, central bank purchases, and market sentiment, while oil is affected by geopolitical sanctions and market trading trends [2][3]. Summary by Relevant Sections 1. Main News International News - The U.S. Senate failed to pass the "2025 Fiscal Year Continuing Appropriations and Extension Act" for the 13th time, leading to the continuation of the government shutdown [5]. Domestic News - The full - text of the "15th Five - Year Plan" was released, setting goals for economic and social development, including economic growth, technological self - reliance, and reform breakthroughs [6]. Industry News - The central bank governor stated that the central bank will implement a moderately loose monetary policy, execute existing measures, and study new policies to support the capital market [7]. 2. Outer - market Daily Returns - A table shows the daily returns of various outer - market assets, including the S&P 500, European STOXX 50, and different commodities such as oil, gold, and agricultural products [10]. 3. Morning Comments on Major Varieties Financial - **Stock Indices**: After a high - level shock in September, stock indices are entering a direction - selection phase. With a potentially loose domestic liquidity environment and expected inflows of external funds, the market style may shift towards value in the fourth quarter [11]. - **Treasury Bonds**: Treasury bonds opened higher and closed higher. With the central bank's supportive monetary policy and expected market liquidity, the prices of treasury bond futures are expected to be supported [12][13]. Energy and Chemicals - **Crude Oil**: SC crude oil fell at night. Geopolitical sanctions on Russian oil companies have been imposed, but the downward trend of oil prices remains due to unclear market situations and limited impact on Russian oil transportation [3][14]. - **Methanol**: Methanol prices fell at night. The开工 rate of coal - to - olefin and methanol production decreased, and coastal methanol inventories increased. Market uncertainties have intensified price fluctuations [15]. - **Rubber**: As the rubber - tapping season progresses, supply pressure may increase. However, potential weather impacts on production and positive progress in Sino - U.S. trade negotiations may support prices [16]. - **Polyolefins**: Polyolefin futures declined slightly. Following the oil trend and with high downstream demand, the market may start to oscillate after a short - term rebound [17]. - **Glass and Soda Ash**: Glass futures rebounded slightly, and soda ash futures oscillated. Both are in the process of inventory digestion, and market sentiment is cautious. Attention should be paid to autumn consumption and policy changes [18][19]. Metals - **Precious Metals**: Gold and silver prices fell significantly and then rebounded slightly. Geopolitical risks have cooled, and after a rapid rise, prices are adjusting due to weakened driving factors and accumulated profit - taking [2][20]. - **Copper**: Copper prices rose at night. With a tight supply of concentrates and high smelting output, an Indonesian mine accident may lead to a supply - demand gap, supporting long - term prices [21]. - **Zinc**: Zinc prices rose at night. With an increase in zinc concentrate processing fees and expected production growth, the price may fluctuate within a range due to different inventory situations at home and abroad [22]. Black Metals - **Coking Coal and Coke**: The coking coal and coke market oscillated upwards at night. While high iron - water production provides support, the possibility of blast furnace production cuts due to shrinking profits should be considered [23]. Agricultural Products - **Protein Meal**: Bean and rapeseed meal prices oscillated upwards at night. With good progress in Sino - U.S. trade talks and high U.S. soybean export inspections, the domestic market may oscillate in the short term [24]. - **Oils and Fats**: Oil prices were weak at night. With expected increases in palm oil production and exports in Malaysia, and supply - side expectations of relaxation, short - term prices are under pressure [25]. - **Sugar**: Zhengzhou sugar prices oscillated within a range. The global sugar market is in a stock - building phase, and Brazilian factors are dragging down prices. In the domestic market, cost support and import - related rumors may affect prices [26]. - **Cotton**: Zhengzhou cotton prices continued to oscillate. Affected by the U.S. government shutdown and domestic market conditions, prices are expected to be slightly stronger in the short term [27]. Shipping Index - **Container Shipping to Europe**: The EC index oscillated. With multiple shipping companies reducing freight rates and limited capacity control, the market is expected to continue to oscillate in the short term [28].

Market Performance - On October 27, the equity market experienced a significant increase, with the Wind All A Index rising by 1.19% and a total trading volume of 2.36 trillion yuan, an increase of 365 billion yuan compared to the previous Friday [2] - The Hang Seng Index and Hang Seng Technology Index rose by 1.05% and 1.83% respectively, with net inflows of southbound funds amounting to 2.873 billion HKD, primarily into SMIC and Tencent [2] - The market rally was driven by three main factors: the continued impact of the Fourth Plenary Session, a thaw in US-China relations, and breakthroughs in the photolithography sector [2] Index Recovery - The recovery in late October exhibited a standard "dumbbell" structure, with major indices like the Shanghai 50 and Wind Micro Index showing significant breakthroughs compared to the October 9 closing prices, increasing by 1.62% and 5.33% respectively [3] - In contrast, small-cap indices such as the CSI 500 and CSI 1000 lagged behind, remaining at least 2% below their previous highs [3] - Key sectors leading the recovery included communication equipment and components, which rose by 8.70% and 7.04% respectively, indicating that AI computing power is a primary focus of this recovery [3] Hong Kong Market Dynamics - The Hong Kong market continued to rise, supported by improved risk appetite due to the easing of US-China tensions and a stable US dollar [4] - The Nasdaq index also saw a rise of 1.15%, influenced by upcoming earnings reports from major US tech companies [4] - The bond market began a downward trend, with the People's Bank of China announcing the resumption of government bond trading, leading to a decline in yields for medium to long-term bonds [4][6] Commodity Market Trends - In the domestic commodity market, "anti-involution" products continued to lead, with polysilicon and lithium carbonate rising by 3.82% and 2.53% respectively [7] - The non-ferrous metals sector performed strongly, with copper prices reaching a yearly high, while precious metals like gold and silver faced downward pressure [7] - Overall, the commodity market recorded a net inflow of nearly 6 billion yuan, with significant investments in non-ferrous metals and new energy sectors [7] Future Outlook - The market's performance is seen as a result of the interplay between "TACO" trading and "anti-involution" themes, with future trends dependent on the sustainability of US-China relations and the impact of policies on supply-demand dynamics in the "anti-involution" sectors [9]

Core Insights - The article discusses the resurgence of TACO trading and the global equity market's upward trend, alongside a correction in precious metals [2] Group 1: TACO Trading - TACO trading has seen a revival, indicating a shift in market dynamics and investor sentiment [2] - The article highlights the implications of this trading strategy on overall market performance and investor behavior [2] Group 2: Global Equity Market - Global equities have experienced an upward movement, suggesting a positive outlook for stock markets worldwide [2] - The article provides insights into the factors driving this increase, including economic indicators and investor confidence [2] Group 3: Precious Metals - Precious metals have undergone a correction, contrasting with the rising equity markets [2] - The article analyzes the reasons behind this pullback, including changes in demand and macroeconomic factors [2]

Market Overview - The global capital markets saw most equity assets rise this week, driven by expectations of a "Trump softening" in trade negotiations, despite Trump's announcement of a 155% tariff on China[3] - The 10Y US Treasury yield remained stable at 4.02%, while the US dollar index increased by 0.39% to 98.9, staying below 100[3][10] - A-share indices all rose, with notable gains in the ChiNext and STAR Market, while global markets, except for Vietnam's Ho Chi Minh index, also experienced increases[3][8] Fund Flows - In the week ending October 23, 2025, both domestic and foreign capital flowed out of the Chinese stock market, with foreign active funds seeing a net outflow of $1.52 million and passive funds $3.67 million[3][16] - The US market saw significant inflows, with equity funds gaining $12.29 billion and fixed income funds $11.17 billion during the same period[3][16] Valuation Metrics - The Shanghai Composite Index's PE ratio is at the 92.1% historical percentile, second only to the S&P 500, indicating relatively high valuation compared to European markets[3][15] - Risk-adjusted returns for the Shanghai Composite increased from the 69th to the 75th percentile, suggesting better allocation value in the Chinese market compared to global peers[3][15] Economic Data - The US September CPI recorded a 3% increase, slightly below the expected 3.1%, while China's Q3 GDP growth was reported at 4.8%, on track to meet the annual target of 5%[3][5] - The probability of a 25 basis point rate cut by the Federal Reserve in October is at 98.3%, slightly down from the previous week[3][5] Risk Indicators - The implied volatility for the S&P 500 has weakened, with the put-call ratio remaining stable at 1.07, indicating cautious market sentiment[3][5] - The A-share options market showed a reduction in positions across various strike prices, reflecting a cautious approach among investors[3][5]

Market Outlook and Strategy - The report indicates that the recent decline in the Hong Kong stock market is an overreaction to external shocks, particularly influenced by the US-China trade tensions. It suggests that the easing of trade conflicts and the release of incremental policies will support a rebound in the market [2][4][5] - The overall outlook for the fourth quarter is characterized by a "first dip, then rise" trend, with a gradual or wave-like process of style switching rather than a simple flip. Growth style is expected to remain the main focus in the near term as market risk appetite improves [2][5] Industry Recommendations - The report recommends focusing on the internet and insurance sectors. The internet sector is highlighted for its strong fundamentals, with cloud revenue showing high growth rates, and the insurance sector is expected to benefit from increased equity positions and expanding interest spreads [6][2] Market Performance - The Hong Kong stock market experienced a broad decline last week, with the Hang Seng Index dropping by 3.97% and the Hang Seng Tech Index falling by 7.98%. The AH premium significantly widened to 120 [8][11] - The report notes that the major industries saw more declines than gains, with utilities, telecommunications, and energy sectors showing slight increases, while information technology and healthcare sectors led the declines [11][8] Micro Liquidity Analysis - The average daily trading volume in the Hong Kong market was HKD 359 billion, reflecting a slight decrease but remaining high compared to historical levels [15] - The report highlights a net outflow of local and foreign capital, with a net inflow of HKD 451 billion from southbound funds, primarily directed towards financial and non-essential consumer sectors [26][21] Valuation Levels - The current price-to-earnings ratio for the Hang Seng Index is 12.2 times, compared to a three-year median of 9 times and an eight-year average of 10.3 times. The MSCI China Index has a current P/E ratio of 13.6 times, with similar historical comparisons [29][30] Financing Needs - As of October 19, the financing demand for Hong Kong-listed companies is estimated at HKD 27 billion, with IPO and placement needs accounting for HKD 8.5 billion and HKD 17.2 billion, respectively [31]