Group 1 - The A-share market experienced a decline on Thursday, with sectors such as consumption, photovoltaic equipment, banking, and securities performing well, while aerospace, communication equipment, semiconductors, and electronic chemicals lagged behind [1][2] - The current A-share market is benefiting from favorable internal and external policies, with abundant liquidity and a noticeable improvement in market funding, as evidenced by trading volumes exceeding 2 trillion yuan for several consecutive days [1] - Global allocation funds are flowing into the A-share market, with household savings accelerating their shift to capital markets, creating a continuous source of incremental funds [1] Group 2 - The market is under short-term pressure from overbought conditions, necessitating a technical adjustment, while liquidity remains a key foundation for the market [2] - Future market directions to watch include the potential for a second phase of a bull market with rapid sector rotation, focusing on areas with low valuations and improving economic conditions [2] - There is an expectation for policy signals to intensify in response to economic pressures in the second half of the year, particularly regarding supply-side measures that could catalyze cyclical sectors in the medium to long term [2]

Group 1 - The consumption building materials industry leaders are expected to benefit from improved demand due to anticipated policy support and enhanced channel layout and product expansion [1] - In the cement sector, stricter supply controls are expected to ease supply-demand conflicts, leading to a price increase and potential profit recovery for regional leaders [1] - The fiberglass industry is projected to benefit from demand recovery driven by emerging markets, with expectations for price increases in mid-to-high-end products and overall performance recovery for leading companies [1] Group 2 - In the glass sector, the anticipated increase in cold repair production lines is expected to gradually optimize the supply-demand landscape [1]

Economic Indicators - Export high-frequency indicators have started to weaken, with the SCFI showing a month-on-month decline of 6.8% and a drop in growth rate by 14.9 percentage points[4] - Real estate sales continue to decline, with May's sales area down 4.6% year-on-year and residential sales area down 5.5% year-on-year, reaching a new low since the Spring Festival[4] Policy Implications - The weakening of both export and real estate data suggests a potential for increased domestic policy support, although the intensity is expected to be less than the incremental policies introduced after September 26 last year[4] - The State Council has indicated a need to optimize existing policies to stabilize expectations and activate demand, signaling possible policy adjustments[4] Economic Growth Outlook - Despite the challenges, the economic performance in the first half of the year is better than the same period last year, with GDP growth likely to exceed 5%[4] - The current economic environment suggests that a GDP growth rate slightly below 5% in the second half could still meet the annual growth target[4] Investment Trends - Investment growth continues to decline, with real estate investment hitting a historical low, indicating that consumer spending alone may not offset negative external factors[4] - The average weekly transaction area for commercial housing in 30 cities has remained below 2 million square meters since April, down 23.1% compared to the average levels in Q4 last year and Q1 this year[4]