Group 1 - The market showed a mixed performance with the Shanghai Composite Index facing resistance around 3461 points, while sectors like communication equipment, cultural media, tourism, and electronic components performed well, whereas chemical pharmaceuticals, semiconductors, beauty care, and biological products lagged [1] - Long-term capital inflow is accelerating, with a steady increase in ETF size and continuous inflow of insurance funds, providing significant support to the market [1] - The Federal Reserve maintained interest rates in June, but uncertainty remains regarding the path of potential rate cuts, which could significantly boost global risk appetite if clear signals are released [1] Group 2 - The three major indices in the market experienced a collective pullback, but the Shanghai Composite Index remains above the 5-day moving average, indicating a stabilizing upward trend [2] - With ongoing policies aimed at stabilizing growth, steady progress in infrastructure investment, and effective consumer stimulus policies, the macroeconomic recovery trend is becoming clearer [2] - The likelihood of a systemic large-scale adjustment in the market is relatively low due to enhanced policy support for stable capital market operations and reasonable liquidity [2]

Macroeconomic Insights - Consumption has exceeded expectations, showing a moderate recovery in economic activity, with May's data indicating a further rebound in consumption and a slight increase in production[4] - The Consumer Price Index (CPI) remains negative year-on-year, but core inflation has stabilized above 0.5%[4] - Industrial added value growth rate fell to 5.8% year-on-year in May, indicating a relatively mild production environment[4] Market Strategy - The market is experiencing increased disturbances, particularly due to geopolitical tensions affecting oil prices, which has led to a rise in gold prices[6] - Despite market adjustments, the overall trend remains a stable upward trajectory, with expectations for a structural bull market starting in the third quarter[6] - The A-share market is transitioning from quantitative to qualitative changes, with a significant focus on sectors like innovative pharmaceuticals and new consumption[6] Fixed Income Outlook - Recent weeks have seen a general decline in interest rates across various maturities, with short-term rates dropping significantly, indicating a supportive monetary policy environment[28] - The average rates for DR001 and DR007 have decreased by over 10 basis points, reflecting a downward trend in funding costs[28] - The current environment presents opportunities for investment in time deposits as rates are expected to continue declining[29] Banking Sector Analysis - The banking sector shows stable profitability, with credit growth slightly slowing but deposit growth rebounding[36] - The price adjustments following interest rate cuts are expected to alleviate pressure on net interest income, with a controlled decline in net interest margins anticipated[36] - The banking index has outperformed the broader market, indicating strong relative performance[35] Real Estate Market Trends - New home sales have seen a narrowing decline, with a year-to-date cumulative sales area growth rate of -0.3% across 33 cities[38] - The government is emphasizing a multi-faceted approach to stabilize the real estate market, aiming to activate demand and optimize supply[38] - Policies are expected to support a gradual recovery in the real estate sector, with a focus on leading companies with strong market capabilities[40] Non-Banking Financial Institutions - The securities market remains stable, with daily trading volumes in major exchanges ranging from 1.1 to 1.5 trillion yuan[42] - The impact of U.S. tariffs on global trade is significant, but domestic policies aimed at boosting consumption may mitigate some adverse effects[42] - The upcoming Lujiazui Forum is anticipated to introduce significant policies that could enhance market confidence and investment value[43]