Group 1 - The stock market is seen as a barometer of expectations, indicating that the Chinese economy may exit the deflationary phase in the second half of the year [1] - The core goal set by the highest decision-making body for the second half of the year is to combat "involution," with specific policy measures expected to be announced soon [1] - The recent rise in cyclical sectors and increased risk appetite reflect strong confidence in the government's commitment to the "involution" policy [1] Group 2 - Domestic policies are expected to tighten under severe geopolitical conditions, prioritizing security over development [2] - If U.S.-China relations improve, there may be a rebalancing of resources between security and development, potentially allowing for more resources to combat deflation [2] - The capital market's expectations are likely to change significantly, with the investment landscape shifting from a deflationary to a more moderate stance [2]