Market Overview - The A-share market is expected to experience fluctuations around the 3600-point level in the short term, with a likely period of consolidation ahead [1][10] - The market sentiment is anticipated to stabilize gradually as self-adjustment occurs and potential positive factors emerge [10][11] - If sustained hot sectors attract capital and trading volume increases, the index may break through the 3600-point barrier, opening new upward space [10][11] Short-term Strategy - Investors are advised to remain rational and avoid blindly following trends, particularly in high-flying sectors [2][11] - It is recommended to selectively reduce positions in sectors that have seen significant gains, such as hydropower and related areas, while looking to invest in technology growth sectors during dips [2][11] Mid-term Outlook - The A-share market is projected to exhibit a "slow bull" pattern driven by favorable tariff negotiations, ongoing policy support, and an overall improvement in liquidity [2][11] - Key areas for mid-term investment include sectors with growth elasticity, such as AI infrastructure, innovative pharmaceuticals, and humanoid robotics, which are driven by both policy and technological advancements [2][11] Sector Performance - The military industry has shown strong performance, with significant gains noted in the aerospace and defense sectors, supported by government policies and geopolitical tensions [6][10] - The pharmaceutical sector is also active, with innovative drugs gaining traction as the environment for commercialization improves [8][10] - Communication sectors, particularly those related to 5G and emerging 6G technologies, are expected to benefit from government initiatives and advancements in technology [9][10]

- Model Name: GRU Factor Model; Model Construction Idea: The GRU factor model leverages transaction information to capture excess returns; Model Construction Process: The GRU factor model is built using minute-level volume and price data processed through a GRU deep learning network. The model dynamically adjusts based on historical training data to adapt to market conditions; Model Evaluation: The GRU factor model has shown strong performance in short cycles but is less effective in longer cycles[7][32][37] - Model Name: Diffusion Index Model; Model Construction Idea: The diffusion index model is based on the principle of price momentum; Model Construction Process: The diffusion index model tracks the momentum of industry indices. It ranks industries based on their diffusion index values, which are calculated from price trends. The model suggests industry allocations based on these rankings; Model Evaluation: The diffusion index model performs well in capturing upward trends but may fail during market reversals[6][26][36] Model Backtest Results - GRU Factor Model, Average Weekly Return: 0.82%, Excess Return over Equal-Weighted Index: -0.58%, Year-to-Date Excess Return: -4.71%[35] - Diffusion Index Model, Average Weekly Return: 2.22%, Excess Return over Equal-Weighted Index: 0.82%, Year-to-Date Excess Return: -0.81%[30] Factor Rankings - GRU Factor Rankings (as of June 6, 2025): Top 6 industries: Banking (1.41), Real Estate (1.21), Coal (1.08), Oil & Petrochemicals (0.61), Electric Utilities (0.42), Steel (-0.13); Bottom 6 industries: Electric Equipment & New Energy (-19.92), Media (-18.56), Comprehensive Finance (-17.89), Computers (-15.93), Non-Banking Finance (-15.92), Automotive (-14.28)[7][33] - Diffusion Index Rankings (as of June 6, 2025): Top 6 industries: Comprehensive Finance (1.0), Comprehensive (0.998), Non-Banking Finance (0.997), Banking (0.969), Media (0.953), Computers (0.942); Bottom 6 industries: Coal (0.166), Oil & Petrochemicals (0.268), Non-Ferrous Metals (0.566), Agriculture, Forestry, Animal Husbandry & Fishery (0.594), Electric Utilities (0.624), Building Materials (0.71)[6][27]