Market Overview - The A-share market is expected to maintain a volatile adjustment phase in the short term, following a rapid rise and subsequent consolidation [1][10] - On Monday, the three major indices of the A-share market showed mixed performance, with the Shanghai Composite Index closing in the green while the ChiNext Index fell after a brief rise [1][10] - The market structure is characterized by more stocks rising than falling, with notable strength in sectors such as precious metals, electric grid equipment, and aerospace, while the AI application sector continues to adjust [1][10] Short-term Market Dynamics - The trading volume has decreased, with the total turnover dropping to 2.7 trillion yuan, increasing the probability of adjustment [1][8] - Escalating trade tensions between the US and Europe have heightened global market risk aversion [1][8] - The upcoming peak of annual report forecasts in January is creating a battleground between performance expectations and fundamental verification, particularly for some popular themes in technology [1][8] Mid-term Market Outlook - The mid-term positive trend remains unchanged, with the global interest rate cut cycle entering its second half, leading to a macro liquidity environment of both internal and external easing [2][9] - There is a clear trend of reallocating household wealth towards the stock market, providing solid support for continued market entry of mid-to-long-term funds [2][9] - The current market is not in a trend decline but rather in a structural optimization phase during consolidation, offering entry points for quality stocks as valuations are repaired [2][9] Sector Analysis - The precious metals sector has shown strong performance, driven by factors such as the onset of the Federal Reserve's interest rate cut cycle, increased geopolitical tensions, and strong demand for gold as an inflation hedge [6][7] - The aerospace and military sectors have also seen significant gains, supported by stable growth in defense budgets and ongoing geopolitical conflicts that may catalyze further investment [7][8] - The report suggests focusing on segments like aerospace, military technology, and defense information systems, which are expected to benefit from policy support and emerging growth points [7][8]