Group 1 - The core viewpoint is that the innovative drug sector has recently experienced a continuous adjustment due to profit-taking and overseas news disturbances, with the Hang Seng Biotechnology Index reflecting a decline to levels seen in late July [1] - The Hang Seng Pharmaceutical ETF (159892) fell over 1% during the trading session, while Innovent Biologics saw a counter-trend increase due to significant BD transactions [1] - Long-term prospects for the Hong Kong pharmaceutical sector indicate a substantial correction since the peak in 2021, with recovery expected by 2025, despite short-term concerns about market bubbles [1] Group 2 - The recent adjustments have helped to digest some of the previous gains, and there is potential for opportunities in Q4 as the industry fundamentals continue to improve, such as the initial signs of profit turning and accelerated BD overseas [1]

Group 1 - The Hong Kong Stock Connect innovative drug sector is experiencing volatility, with stocks like MIRXES-B and Tongyuan Kang falling over 10%, and China Biopharmaceuticals down more than 4% [1] - The Hong Kong Stock Connect innovative drug ETF (520880) is fully invested in innovative drug R&D companies and has seen a trading volume exceeding 300 million, with a total of over 600 million raised in the past 11 days [1][4] - The ETF has undergone a "purification" process, removing CXO companies and focusing solely on innovative drug R&D, which is expected to enhance its performance in the market [4][5] Group 2 - A recent report from Kaiyuan Securities highlights seven innovative drug sectors with significant market potential, including next-generation IO, weight loss, and small nucleic acids, which are expected to see positive developments in the next 6-12 months [3] - The report identifies key catalysts and related companies in these sectors, indicating that domestic firms are actively positioning themselves and achieving global leadership in certain areas [3] - The innovative drug ETF (520880) has shown a year-to-date increase of 119.75% prior to the purification revision, outperforming other innovative drug indices [5][6]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - A-shares are expected to maintain a high-risk preference, and investment opportunities in innovative drugs, artificial intelligence, and rare earths are favored [12]. - Bond market yields may continue to fluctuate within a narrow range at a low level [12]. - In the context of the Fed's dovish stance, gold has the possibility to break through its previous high [12]. 3. Summary by Related Catalogs Stock Market Performance - U.S. stocks rose, with the Nasdaq, S&P 500, and Dow Jones Industrial Average changing by 3.87%, 2.43%, and 1.35% respectively. The Nasdaq China Technology Index changed by 4.25%, and the Hang Seng Index changed by 1.43% [2]. - A-shares generally rose, with the Wind All A Index rising 1.94%. Most major indices showed positive changes, and most sectors and industries also rose, with non-ferrous metals, machinery, and national defense and military industry leading the gains [3][4]. Bond Market Performance - Interest rate bond prices rose, and the yield curve steepened. The 10-year Treasury bond futures contract rose 0.19%, and the yield of the 10-year Treasury bond active bond decreased by 1.68 BP [5]. - Bond market leverage increased, and the central bank's open market operations had a net withdrawal of 536.5 billion yuan [6][8]. - U.S. Treasury yields increased, and the curve shifted upward as a whole [9]. Foreign Exchange and Commodity Markets - The U.S. dollar depreciated, and the U.S. dollar index decreased by 0.43%. Gold prices rose, with London gold spot prices rising 1.49% and COMEX gold futures prices rising 1.29% [10]. Fed's Stance - The Fed's regulatory vice-chairman's remarks were more dovish than the market's mainstream expectations, and the market's mainstream expectation for the number of Fed rate cuts in 2025 remains 2 times [11].

Group 1 - The issuance of equity funds has shown a significant increase, with 7 equity funds established at the beginning of July, indicating a recovery in investor confidence and optimism towards the equity market [1][2] - Among the 67 funds currently being issued, 50 are equity funds, accounting for 74.63%, and 34 are passive index funds, making up 50.75% [2] - The trend of increasing equity fund issuance is expected to inject more capital into the market, enhancing liquidity and trading activity, while also fostering healthy competition among public fund institutions [2] Group 2 - Passive index funds are favored due to their clear investment style, high transparency, and standardization, which facilitates asset allocation [3] - The growing recognition of passive index funds among investors, along with their risk mitigation capabilities in volatile markets, has contributed to their appeal [3] - Public fund institutions are diversifying their product offerings, focusing on various indices and industry themes such as healthcare, robotics, and aerospace, reflecting their assessment of future investment opportunities [3][4] Group 3 - The healthcare sector is highlighted as a significant investment opportunity, with expectations of a major recovery in the innovative drug industry by 2025, driven by favorable policies and market conditions [4] - The Chinese innovative drug sector is anticipated to gain global market attention once clinical data is validated internationally, marking a substantial trend in the industry [4]