Core Viewpoint - Morgan Stanley's China and Hong Kong equity strategy head, Liu Mingdi, forecasts significant upside potential for major indices by 2026, with MSCI China Index, CSI 300 Index, and MSCI Hong Kong Index projected to reach 100 points, 5200 points, and 16000 points respectively, indicating approximately double-digit growth from current levels [1][3]. Investment Themes - Four key investment themes for 2026 are identified: "anti-involution," growth in global AI infrastructure spending, the positive impact of developed countries' easing policies on exports, and the "K-shaped" recovery in consumption benefiting food and beverage and ultra-premium sectors [1][4]. - A potential fifth theme is the stabilization of the real estate market, with expectations for clearer signals during the upcoming National People's Congress [4]. Market Outlook - Liu's team has maintained a positive outlook on MSCI China and CSI 300 indices since January 2025, with expectations for continued upward trends into 2026. The current economic phase is characterized as "summer," with potential for a "spring sprint" in growth stocks by 2026 [3][4]. - The target growth rates for the indices are approximately 22% for MSCI China, 13.5% for CSI 300, and 17.8% for MSCI Hong Kong [3]. Sector Analysis - Semiconductor valuations are currently considered high, while sectors such as photovoltaics and energy storage are viewed more favorably. The market is expected to mature, leading to reduced volatility and increased asset configurability [5][6]. - The consumption sector is seen as attractive due to low valuations compared to other markets, with the MSCI China Consumer Staples Index having a lower price-to-earnings ratio than its counterparts in India, the US, and Japan [7][9]. Consumer Sentiment - The current consumer spending slowdown is attributed to concerns over income and employment rather than a lack of funds. There is optimism for consumer recovery, particularly as government policies focus on consumption and real estate in the coming year [9].

Core Viewpoint - Morgan Stanley's Liu Mingdi highlights four major investment themes for 2026, indicating significant upside potential for key indices in China and Hong Kong [1][2]. Investment Themes - The four key investment themes for 2026 are: "anti-involution," growth in global AI infrastructure spending, the positive impact of developed countries' easing policies on exports, and the "K-shaped" recovery in consumption benefiting food and beverage and ultra-premium sectors [3][4]. Market Outlook - Liu's team has been optimistic about the MSCI China and CSI 300 indices since January 2025, predicting continued upward trends into 2026, with target levels set at 100 points for MSCI China, 5200 points for CSI 300, and 16000 points for MSCI Hong Kong, representing potential increases of approximately 22%, 13.5%, and 17.8% respectively [2][3]. Sector Analysis - The semiconductor sector is viewed as having high valuations, while sectors such as photovoltaics and energy storage are favored for investment [4][5]. - The "anti-involution" theme is expected to benefit industries with strong income prospects, such as batteries and renewable energy, as well as cyclical sectors closely tied to the macroeconomy [6][7]. Consumer Sector Insights - Current consumer spending is constrained more by confidence and employment concerns rather than a lack of funds, with disposable income growth outpacing consumption growth in most provinces [7]. - The MSCI China Consumer Staples Index has the lowest price-to-earnings ratio compared to markets like India, suggesting a favorable valuation for essential consumer goods [7].

Core Viewpoint - Morgan Stanley's target points for MSCI China Index, CSI 300 Index, and MSCI Hong Kong Index for 2026 are set at 100 points, 5200 points, and 16000 points respectively, indicating a potential double-digit upside from current levels [1][7]. Investment Themes - Four key investment themes for 2026 are identified: "anti-involution," growth in global AI infrastructure spending, the positive impact of developed countries' easing policies on exports, and the "K-shaped" recovery in consumption benefiting food and beverage and ultra-premium consumption sectors [2][7]. - A potential fifth theme is the stabilization of the real estate market [7]. Market Outlook - The MSCI China Index, CSI 300, and MSCI Hong Kong Index are expected to see increases of approximately 22%, 13.5%, and 17.8% respectively by 2026 [7]. - The current economic cycle in China is characterized as "summer," with expectations of a "spring sprint" in 2026, leading to renewed interest in growth stocks [7]. Sector Analysis - Semiconductor valuations are currently considered high, while sectors such as photovoltaics and energy storage are viewed more favorably [8][10]. - The consumer sector is seen as having attractive valuations, particularly in essential consumption, which is expected to perform well relative to other sectors [11][12]. Consumer Behavior Insights - The primary reason for current consumer weakness is not a lack of funds but rather concerns over income and employment, which are suppressing spending [12]. - The disposable income growth in most provinces is outpacing consumption growth, indicating a recovery in household balance sheets [12]. Valuation Comparisons - The MSCI China Consumer Staples Index has a lower price-to-earnings ratio compared to markets like India, the US, and Japan, making it an attractive investment opportunity [12].

Core Viewpoint - The target points for MSCI China Index, CSI 300 Index, and MSCI Hong Kong Index for 2026 are set at 100 points, 5200 points, and 16000 points respectively, indicating a potential double-digit upside from current levels [1][5]. Investment Themes - Four key investment themes for 2026 are identified: "anti-involution," growth in global AI infrastructure spending, the positive impact of developed countries' easing policies on exports, and the "K-shaped" recovery in consumption benefiting food and beverage and ultra-high-end consumption sectors [2][5]. - A potential fifth theme is the stabilization of the real estate market, with expectations of clearer signals from policy changes in early 2024 [5]. Market Outlook - The outlook for 2026 is optimistic, with expectations of a "spring sprint" in the market, particularly for growth stocks, as the current economic cycle is in the "summer" phase, which is typically followed by a recovery phase [3]. - The investment strategy suggests a shift from crowded growth and momentum sectors to value, defensive, and high-yield stocks, with the current market dynamics expected to continue into early next year [3]. Sector Analysis - Semiconductor valuations are currently considered high, while sectors such as photovoltaics and energy storage are viewed more favorably [6]. - The AI capital expenditure growth is expected to benefit Chinese companies, with a focus on the energy storage and photovoltaic sectors, which are still in the recovery phase [6][7]. Consumer Sector Insights - The consumer sector is seen as having attractive valuations, with the MSCI China Consumer Staples Index having a lower price-to-earnings ratio compared to markets like India and the U.S. [10]. - The current consumer spending slowdown is attributed more to confidence and employment concerns rather than a lack of funds, indicating potential for recovery as confidence improves [9][10].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Through macro - fundamental and technical analysis, the report predicts the trend of various futures contracts on December 19, 2025, including whether they will be in a strong or weak shock state and their corresponding support and resistance levels [2][3][4][5][8] - The report also provides macro - information and trading tips, including national policies, international events, and economic data, which may affect the futures market [8][9][10][11] Summary by Related Catalogs 1. Futures Market Outlook - **Stock Index Futures**: Expected to be strongly volatile on December 19. For example, IF2603 has resistance at 4539 and 4576 points and support at 4486 and 4461 points. In December 2025, the main contracts of IF, IH, IC, and IM are likely to be in wide - range fluctuations [2][19] - **Treasury Bond Futures**: The 10 - year T2603 and 30 - year TL2603 are expected to be strongly volatile on December 19. The 10 - year T2603 has resistance at 108.07 and 108.14 yuan and support at 107.92 and 107.87 yuan; the 30 - year TL2603 has resistance at 112.7 and 113.2 yuan and support at 111.9 and 111.7 yuan [3][34][36] - **Precious Metal Futures** - **Gold**: The main contract AU2602 is expected to fluctuate and consolidate on December 19, with resistance at 988.8 and 993.0 yuan/gram and support at 975.7 and 972.5 yuan/gram. In December 2025, it is likely to be strongly and widely volatile [40] - **Silver**: The main contract AG2602 is expected to be weakly volatile on December 19, with support at 15033 and 14779 yuan/kg and resistance at 15521 and 15666 yuan/kg. In December 2025, it is likely to be strongly volatile and may hit a new high [46][47] - **Platinum**: The main contract PT2606 is expected to be weakly and widely volatile on December 19, with resistance at 550.0 and 570.0 yuan/gram and support at 542.6 and 535.0 yuan/gram [51] - **Palladium**: The main contract PD2606 is expected to have wide - range fluctuations on December 19, with resistance at 490.0 and 510.0 yuan/gram and support at 476.6 and 470.0 yuan/gram, and may hit a new high [54] - **Base Metal Futures** - **Copper**: The main contract CU2602 is expected to fluctuate and consolidate on December 19, with resistance at 93800 and 94700 yuan/ton and support at 91600 and 91100 yuan/ton. In December 2025, it is likely to be strongly volatile and may hit a new high [57] - **Tin**: The main contract SN2601 is expected to be strongly volatile on December 19, with resistance at 342000 and 345000 yuan/ton and support at 334300 and 331600 yuan/ton. In December 2025, it is likely to be strongly volatile [62] - **Other Commodity Futures** - **Polysilicon**: The main contract PS2605 is expected to be weakly and widely volatile on December 19, with support at 58000 and 56800 yuan/ton and resistance at 60000 and 62000 yuan/ton. In December 2025, it is likely to be strongly volatile [64][66] - **Lithium Carbonate**: The main contract LC2605 is expected to have wide - range fluctuations on December 19, with resistance at 106300 and 110000 yuan/ton and support at 104500 and 102700 yuan/ton. In December 2025, it is likely to be strongly volatile [72] - **Rebar**: The main contract RB2605 is expected to be weakly volatile on December 19, with support at 3096 and 3075 yuan/ton and resistance at 3137 and 3157 yuan/ton. In December 2025, it is likely to have wide - range fluctuations [77] - **Hot - Rolled Coil**: The main contract HC2605 is expected to be weakly volatile on December 19, with support at 3238 and 3225 yuan/ton and resistance at 3282 and 3298 yuan/ton [82] - **Iron Ore**: The main contract I2605 is expected to have wide - range fluctuations on December 19, with resistance at 784 and 788 yuan/ton and support at 770 and 767 yuan/ton. In December 2025, it is likely to be weakly and widely volatile [84] - **Coking Coal**: The main contract JM2605 is expected to be weakly and widely volatile on December 19, with support at 1100 and 1070 yuan/ton and resistance at 1133 and 1145 yuan/ton. In December 2025, it is likely to have wide - range fluctuations [90] - **Glass**: The main contract FG605 is expected to be weakly and widely volatile on December 19, with support at 1033 and 1021 yuan/ton and resistance at 1069 and 1085 yuan/ton. In December 2025, it is likely to have wide - range fluctuations [94] - **Soda Ash**: The main contract SA605 is expected to be weakly and widely volatile on December 19, with support at 1170 and 1160 yuan/ton and resistance at 1193 and 1205 yuan/ton. In December 2025, it is likely to have wide - range fluctuations and may hit a new low [100] - **PTA**: The main contract TA605 is expected to be strongly volatile on December 19, with resistance at 4850 and 4894 yuan/ton and support at 4742 and 4726 yuan/ton [104] 2. Macro - Information and Trading Tips - The National Development and Reform Commission will take measures to expand effective investment, including expanding investment in emerging industries and adjusting the pilot scope of local government special bond projects [8] - The State Administration for Market Regulation will promote the construction of a unified national market and strengthen fair competition governance [8] - The US has launched a US $11 billion arms sale to Taiwan, which China firmly opposes [8] - Hainan Free Trade Port officially started the whole - island customs closure operation on December 18, 2025, expanding the "zero - tariff" commodity range [9] - China has re - implemented export license management for steel products and approved some rare - earth export general license applications [9] - The State - owned Assets Supervision and Administration Commission of the State Council has issued a new method for holding central enterprises accountable for illegal business investment [9] - Market institutions expect the central bank to cut the reserve requirement ratio by about 0.5 percentage points and the interest rate by about 0.1 percentage points in 2026 [10] - A new consumption model called the "reward economy" is emerging among young people [10] - US President Trump will announce the next Fed chair nominee who supports "substantial" interest - rate cuts [10] - Trump will sign a nearly US $1 trillion annual defense policy bill, with the approved annual military expenditure reaching a record high of US $901 billion [10] - The US November core CPI rose 2.6% year - on - year, and the overall CPI rose 2.7% year - on - year, both lower than expected, but the data reliability is questioned [11] - The number of initial jobless claims in the US last week decreased by 13,000 to 224,000, and the number of continued jobless claims increased by 67,000 to 1.897 million [11] - The European Central Bank maintained the benchmark interest rate at 2% for the fourth consecutive time [11] - The Bank of England cut the interest rate by 25 basis points to 3.75% [11] 3. Commodity Futures - Related Information - On December 18, London base metals showed mixed performance. LME copper fell 0.13%, LME zinc fell 0.44%, LME nickel rose 1.84%, LME aluminum rose 0.38%, LME tin rose 1.53%, and LME lead fell 0.05% [12] - On December 18, international precious - metal futures generally closed down. COMEX gold futures fell 0.23%, and COMEX silver futures fell 2.17% [12] - A large undersea gold mine was discovered in Laizhou, Shandong, with the city's total proven gold reserves accounting for about 26% of the country's total [12] - On December 18, US oil and Brent crude oil futures rose slightly [13] - Goldman Sachs predicts that copper prices will consolidate in 2026, with an average price of US $11,400 per ton in the baseline scenario, and gold prices will rise 14% to US $4,900 per ounce by December 2026 [13] - On December 18, the on - shore RMB against the US dollar rose 41 basis points at the 16:30 close [13] - In November, the RMB ranked sixth in the global payment currency ranking by amount, accounting for 2.94% [13] - On December 18, the US dollar index rose 0.04%, and most non - US currencies rose [14]

Group 1 - China's Hainan Free Trade Port officially launched its zero-tariff operation on December 18, expanding the range of zero-tariff goods to over 6,600 items, enhancing consumer experience for travel and shopping [2] - The Ministry of Commerce has reintroduced export license management for steel for the first time in 16 years to strengthen monitoring and analysis of steel product exports [2] - A giant underwater gold mine has been discovered in Shandong Province, with proven gold reserves of over 3,900 tons, accounting for approximately 26% of the national total [2] Group 2 - The State Administration for Market Regulation emphasizes the need to strengthen the construction of a unified national market and promote fair competition [3] - The U.S. has initiated a military sale to Taiwan valued at approximately $11 billion, marking one of the largest military sales [3] - The State-owned Assets Supervision and Administration Commission has issued guidelines for holding central enterprises accountable for investment violations, effective from January 1, 2026 [3] Group 3 - The China Securities Regulatory Commission is advancing the "14th Five-Year" plan for the capital market, focusing on comprehensive reforms and high-level opening-up [4] - A-share indices showed divergence, with the Shanghai Composite Index closing up 0.16% while the Shenzhen Component Index and ChiNext Index fell by 1.29% and 2.17%, respectively [4] - The Hong Kong stock market is undergoing a narrow consolidation, with the Hang Seng Index closing up 0.12% [4] Group 4 - Morgan Stanley predicts that chip stocks will remain one of the best-performing sectors in the U.S. stock market next year, highlighting Nvidia, Broadcom, and Astera Labs as top picks [5] - Insurance asset management institutions have registered 83 asset-backed plans this year, totaling approximately 344.56 billion yuan [5] - Domestic GPU companies, Moore Threads and Muxi Co., have recently listed on the STAR Market, attracting significant investment from insurance funds [5] Group 5 - A wave of IPOs is expected in the Hong Kong capital market, with several companies starting public offerings on December 18 [6] - The Ministry of Industry and Information Technology announced that the photovoltaic industry will enter a critical phase in 2026, focusing on capacity regulation [8] Group 6 - The State Council has issued guidelines to strengthen electronic cigarette regulation and combat illegal tobacco-related activities [9] - The upcoming New Year's holiday is projected to significantly boost the domestic tourism market, with flight bookings increasing by approximately 46% year-on-year [9] - The total scale of bank wealth management products reached a historical high of about 34 trillion yuan by the end of November [9] Group 7 - The People's Bank of China will issue 40 billion yuan in central bank bills in Hong Kong on December 22, with a maturity of six months [18] - The U.S. Treasury Department reported an increase in Japan's holdings of U.S. Treasury securities to $1.2 trillion in October [18]