Core Insights - The report indicates that liquidity is stabilizing, but there are emerging concerns regarding risk appetite, particularly influenced by macroeconomic uncertainties and the performance of technology giants [1][3][4]. Market Overview - The U.S. stock market experienced a rebound following an agreement between the Democratic and Republican parties to resolve the government shutdown, with the S&P 500 rising by 1.54% [2]. - Bitcoin's performance is highlighted as a leading indicator for the stock market, with its inability to break above the MA250 suggesting potential market peaks [2][3]. Risk Appetite Dynamics - Current market behavior reflects a hierarchy of risk appetite: Bitcoin > U.S. stocks > Gold, with recent performance showing Bitcoin < U.S. stocks < Gold [3]. - The decline in risk appetite is attributed to two main factors: uncertainty in macroeconomic data due to the government shutdown and doubts regarding the sustainability of capital expenditures in AI by major tech companies [3]. Valuation Insights - The report reaffirms that U.S. stock valuations are not overly expensive, estimating the S&P 500's valuation center at 6800-6900, with potential pullbacks likely to remain within 10% [4]. - The report suggests that if AI-related capital expenditures decline significantly, it could lead to a more substantial credit contraction, with a static lower limit for the S&P 500 around 5600 [4]. Hong Kong Market Independence - The Hong Kong stock market is showing increasing independence from external market influences, which may enhance its self-reinforcing cycle [5].