Core Viewpoint - The report from Macquarie suggests that unless trade negotiations or geopolitical relations deteriorate, emerging market inflows and improved liquidity in H-shares will provide support for the A-share market in the next six months [1] Group 1: Market Outlook - The A-share market is expected to receive support due to a 20% year-on-year increase in industrial profits in August, driven by anti-involution policies in upstream industries [1] - The upcoming "14th Five-Year Plan" is anticipated to focus on enhancing social welfare, potentially leading to structural inflows into the stock market [1] - Reforms in household savings, insurance, and private pensions could add approximately 43 trillion RMB in potential investments to the stock market over the next decade, equivalent to 41% of the total market capitalization of A-shares in Q3 this year [1] Group 2: Investment Preferences - The company currently prefers H-shares over A-shares due to quality rotation and IPOs attracting more investor attention to the Hong Kong stock market [1] - Despite this preference, the company remains optimistic about A-share performance in the medium term, as national policy reforms are expected to drive capital inflows [1] Group 3: Sector Preferences - The company favors sectors such as internet and consumer services while avoiding the energy sector and low-beta, high-dividend stocks [1] - Selected high-beta, high-quality stocks that are currently undervalued include BYD Company Limited (01211), Wuliangye Yibin Co., Ltd. (000858.SZ), Anta Sports Products Limited (02020), and Haidilao International Holding Ltd. (06862) [1]

Group 1 - The Federal Reserve announced a 25 basis point interest rate cut, bringing the new rate range to 4.0% - 4.25%, marking the first adjustment in nine months [1] - The decision to cut rates was influenced by stagnant job growth and rising unemployment claims, indicating a cooling labor market that may exceed expectations [2] - The Fed faces a dilemma between managing employment and inflation, as current inflation levels remain above the 2% target, which delayed the rate cut for over six months [2] Group 2 - The interest rate cut is expected to lead to a depreciation of the US dollar, making travel, education, and imports cheaper for Chinese consumers [5] - Global funds are increasingly moving towards emerging markets, with a net inflow of $256.08 billion in the first eight months of the year, a 35% increase from the previous year [8] - The attractiveness of dollar-denominated assets may decline, prompting capital to seek more profitable investment opportunities outside the US [8] Group 3 - The rate cut may influence gold prices, which have recently reached new highs; however, the market has already priced in the expectations of a rate cut [11] - The ongoing high inflation rate in the US poses a risk for potential adjustments by the Fed, which could lead to a correction in gold prices [11]

Core Viewpoint - Bank of America anticipates significant capital inflows into emerging markets at the beginning of next year, driven by a shift of funds away from U.S. assets [1] Group 1: Emerging Market Outlook - Emerging markets are showing resilience, leading to expectations of increased capital inflows [1] - Optimism is expected to rise as the impact of trade tensions is perceived to be limited [1] - Even small-scale diversified investment flows from the U.S. could have a substantial effect on emerging markets [1] Group 2: Investment Drivers - Factors contributing to the positive outlook for emerging markets include a weaker dollar, potential for further interest rate cuts by central banks, and historically low allocation of global funds to emerging markets [1] - Key beneficiaries of foreign capital inflows are identified as Brazil, Mexico, Colombia, Turkey, and Poland [1]