Market Outlook - The initial bull market's consolidation period is likely to extend due to the complexity of U.S. tariffs, shifting the short-term outlook from optimistic to high-level fluctuations[2] - The current market fluctuation is seen as an extension of the volatility since October 8, 2024, with potential for a policy and capital-driven breakthrough later this year[2] - The tariff impact from April has disrupted the profit expectations for A-shares, necessitating time for digestion, which may limit future upward movements[2] Economic Analysis - The economic conditions during the consolidation phase may be weaker than the lowest points of previous bear markets, but the market is unlikely to revert to a bear state[3] - Historical precedents indicate that prolonged consolidation periods can occur due to new economic pressures, similar to the 2013 liquidity crisis and the early 2020 pandemic[3] - The likelihood of a one-year consolidation period has increased, with a return to a bull market rhythm expected later this year[3] Scenario Projections - **Pessimistic Scenario (Low Probability)**: A sudden, larger shock than the April tariff impact could lead the market back to the lows seen in April[3] - **Neutral Scenario (High Probability)**: Gradual economic impacts from tariffs will lead to 1-2 quarters of narrow fluctuations before a return to a bull market driven by policy and capital inflows[3] - **Optimistic Scenario (Low Probability)**: Successful U.S.-China negotiations leading to significant tariff reductions could prevent further market downturns[3] Risk Factors - Key risks include unexpected downturns in the real estate market, significant volatility in U.S. equities, and the potential failure of historical patterns to hold[3]

Group 1 - The core conclusion indicates a shift from optimism to high-level fluctuations due to the complexity of U.S. tariffs, suggesting that the current market fluctuation is an extension of the volatility observed since October 8, 2024, with a potential breakthrough later this year driven by policy and capital [2][9]. - The report suggests that the initial phase of the bull market typically experiences a rapid rise followed by a period of consolidation lasting six months to a year, but the recent tariff shocks have introduced more disturbances, making a six-month optimistic scenario less likely and increasing the probability of a one-year fluctuation [3][10]. - It is noted that during the fluctuation period, the economy may be weaker than at the lowest point of the bear market, but the market is unlikely to revert to a bear market, as the extended fluctuation is primarily due to high uncertainty surrounding U.S. tariffs, which has led to pessimistic profit expectations [3][17]. Group 2 - The report outlines three potential scenarios for the upcoming quarter: a pessimistic scenario where a larger unexpected shock could lead the market back to April's lows, a neutral scenario where tariffs gradually impact the economy leading to narrow fluctuations for 1-2 quarters, and an optimistic scenario where successful U.S.-China negotiations could prevent further downturns [20][26]. - The analysis indicates that the recent tariff shocks are likely to prolong the fluctuation period without altering the overall bull market trend, drawing parallels to past events such as the 2013 liquidity crisis and the early 2020 pandemic [27][30]. - The report emphasizes that the market's rebound is expected to be limited in scope due to the recent tariff impacts, with a potential for a small pullback from late May to July, but the overall market valuation remains low, suggesting that the recent lows may represent a significant support level [30][34]. Group 3 - The report provides a configuration suggestion favoring value-oriented sectors such as banking, real estate, and military industry, while also highlighting the potential for new consumption models and sectors benefiting from geopolitical dynamics [32][30]. - It is noted that the market's performance this week saw significant gains in indices such as the ChiNext 50 and the ChiNext Index, with defense and military sectors leading the gains, while real estate and electronics showed smaller increases [33][34]. - The report mentions that the recent inflow of capital into the A-share market, particularly from foreign investors, is based on recognition of policy, long-term valuation, and industry trends, which may stabilize the market [9][3].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - On April 29, most of the four major A-share stock indices declined, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index falling by 0.05%, 0.05%, and 0.13% respectively, while the Science and Technology Innovation 50 Index rose by 0.1%. Market trading volume decreased by 35 billion yuan compared to the previous day. In terms of industry sectors, public utilities, communications, and beauty care led the gains, while real estate, pharmaceutical biology, and coal led the losses [2]. - The basis of the next-month contracts of IM, IC, IF, and IH was 129.78, 117.71, 50.28, and 24.31 points respectively, with annualized basis yields of -15.7%, -15%, -9.51%, and -6.56%. After the implementation of US reciprocal tariffs, stock index fluctuations increased significantly. The short-term index may be oversold. Attention should be paid to signs of tariff relaxation and structural opportunities in the stock market. If the RMB holds the key level, the index may stabilize synchronously. Currently, there are gaps above and below the index, and it is expected to fluctuate in the short term. The valuation of IF is low, and it is recommended to make long-term investments at low prices [3]. - On April 29, treasury bond futures rose across the board. Recently, the short-term capital market is neutral. With the implementation of the US reciprocal tariff executive order, global trade uncertainty has increased significantly. In the short term, the safe-haven property of treasury bonds is more prominent, but the price has reached a high level, and it is expected to fluctuate. In the long term, the order of fiscal and monetary policies will determine the direction of long-term prices. If fiscal policies are introduced first and the domestic economy shows further improvement, it is expected that long-term treasury bond prices will gradually cool down and the yield curve will become steeper [3][4]. - High-frequency data shows that the recent infrastructure boom has slightly increased [6]. 3. Summary by Relevant Catalogs (1) Economic Data - High-frequency data indicates a slight increase in the recent infrastructure boom [6]. (2) Stock Index Futures and Spot Market Performance | Code | Name | Change (%) | Current Price | Change | Volume | Turnover (10,000 yuan) | Open Interest | Daily Change in Open Interest | Settlement Price | Basis | Annualized Basis Yield (%) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | IC2505 | CSI 2505 | 0.24 | 5573.8 | 13.4 | 19806 | 2204954 | 47845 | -2300 | 5572.8 | 31.1 | -12.6 | | IC2506 | CSI 2506 | 0.23 | 5487.2 | 12.8 | 34048 | 3731914 | 95869 | -211 | 5487.6 | 117.7 | -15.0 | | IC2509 | CSI 2509 | 0.25 | 5360.8 | 13.2 | 7370 | 789232 | 44957 | 792 | 5360.6 | 244.1 | -10.9 | | IC2512 | CSI 2512 | 0.41 | 5275.6 | 21.8 | 3696 | 388947 | 10261 | 887 | 5266.6 | 329.3 | -9.2 | | IC500 | CSI 500 | 0.12 | 5604.9 | 6.6 | 12674292700 | 15803300 | -- | -- | -- | -- | -- | | IF2505 | SSE-CSI 2505 | -0.21 | 3757.8 | -7.8 | 17994 | 2029214 | 46271 | -3286 | 3758.4 | 17.3 | -10.4 | | IF2506 | SSE-CSI 2506 | -0.21 | 3724.8 | -8.0 | 37569 | 4199484 | 134140 | -200 | 3725.8 | 50.3 | -9.5 | | IF2509 | SSE-CSI 2509 | -0.15 | 3670.0 | -5.6 | 6039 | 664974 | 54843 | 67 | 3670.2 | 105.1 | -7.0 | | IF2512 | SSE-CSI 2512 | -0.12 | 3645.6 | -4.2 | 2045 | 223522 | 5819 | 461 | 3643.8 | 129.5 | -5.4 | | IF300 | SSE-CSI 300 | -0.17 | 3775.1 | -6.5 | 11151469400 | 19746274 | -- | -- | -- | -- | -- | | IH2505 | SSE 2505 | -0.32 | 2639.0 | -8.6 | 9490 | 751984 | 17294 | -724 | 2640 | 6.5 | -5.6 | | IH2506 | SSE 2506 | -0.35 | 2621.2 | -9.2 | 20683 | 1628147 | 43068 | 452 | 2623.2 | 24.3 | -6.6 | | IH2509 | SSE 2509 | -0.28 | 2589.8 | -7.2 | 2672 | 207741 | 16917 | 36 | 2590.8 | 55.7 | -5.3 | | IH2512 | SSE 2512 | -0.35 | 2583.4 | -9.2 | 619 | 48041 | 1492 | 41 | 2586.2 | 62.1 | -3.7 | | IH50 | SSE 50 | -0.22 | 2645.5 | -5.7 | 2804263100 | 5389422 | -- | -- | -- | -- | -- | | IM2505 | China 1000 2505 | 0.60 | 5868.0 | 35.0 | 38130 | 4462992 | 63293 | -4736 | 5864.8 | 35.4 | -13.6 | | IM2506 | China 1000 2506 | 0.70 | 5773.6 | 40.4 | 116166 | 13372787 | 159461 | 203 | 5769 | 129.8 | -15.7 | | IM2509 | China 1000 2509 | 0.64 | 5610.0 | 35.4 | 18463 | 2066494 | 69978 | -1510 | 5607 | 293.4 | -12.4 | | IM2512 | China 1000 2512 | 0.56 | 5478.2 | 30.4 | 6083 | 665528 | 17620 | 884 | 5478.4 | 425.2 | -11.3 | | IM1000 | CSI 1000 | 0.45 | 5903.4 | 26.3 | 18602339400 | 21941178 | -- | -- | -- | -- | -- | [10] (3) Treasury Bond Futures and Spot Market Performance | Code | 2-Year Treasury Bond Futures | 5-Year Treasury Bond Futures | 10-Year Treasury Bond Futures | 30-Year Treasury Bond Futures | | --- | --- | --- | --- | --- | | Current Price | 102.3 | 106.1 | 109.1 | 121.0 | | Change (%) | 0.01 | 0.13 | 0.23 | 0.69 | | Volume | 34240 | 50163 | 51372 | 77545 | | Turnover (10,000 yuan) | 7008580 | 5318695 | 5600931 | 9361494 | | Open Interest | 93075 | 157294 | 192474 | 106469 | | Daily Change in Open Interest | -1495 | -717 | 5655 | 1926 | | CTD Bond | 240024.IB | 240014.IB | 240025.IB | 200012.IB | | Yield Change (bps) | -1.00 | -1.75 | -3.12 | -3.10 | | Net Basis | 0.0 | -0.1 | -0.1 | -0.1 | | Quantile | 27.00% | 12.30% | 8.30% | 13.10% | | IRR | 2.0 | 2.4 | 2.6 | 2.4 | | Quantile | 70.90% | 94.80% | 94.00% | 87.20% | [12] Short-Term Capital Interest Rate Market Changes | | Current Price | Previous Price | One Week Ago | One Month Ago | | --- | --- | --- | --- | --- | | SHIBOR: Overnight | 1.54 | 1.60 | 1.71 | 1.73 | | DR001 | 1.54 | 1.59 | 1.70 | 1.72 | | SHIBOR: One Week | 1.75 | 1.72 | 1.67 | 1.94 | | DR007 | 1.78 | 1.75 | 1.71 | 2.05 | [15]

Market Overview - On April 7, U.S. stocks opened lower but later surged, with the Nasdaq index rising over 4% before retreating. By the end of the trading session, the Dow Jones Industrial Average fell by over 390 points, a decline of 1.02% [1] - The Chinese A50 index futures initially surged over 4%, but the gains narrowed to 3.38% by the end of the session [7] Economic Policy Impact - Reports indicated that Kevin Hassett, Director of the White House National Economic Council, suggested that President Trump is considering a 90-day suspension of tariffs on certain countries. However, this was later denied by the White House, leading to volatility in the stock market [3][4] - The market reacted to the news of potential tariff suspensions, initially turning positive before reversing course due to the denial [4] Technology Sector Performance - In the technology sector, Nvidia saw a nearly 4% increase, while Apple and Tesla both dropped over 2% [5][6] Commodity Market Trends - Gold prices fell sharply, dropping below $3,000 per ounce, trading at $2,991.73 [11] - WTI and Brent crude oil futures continued to decline, with WTI falling below $60 per barrel, marking the lowest level since April 2021. Both crude oil benchmarks have dropped over 20% from their January highs of approximately $80 per barrel, entering a bear market [12][14] OPEC+ Production Decisions - OPEC+ announced plans to increase production starting in May, with an additional 410,000 barrels per day, which has contributed to the downward pressure on oil prices [15] U.S. Economic Outlook - Federal Reserve Chairman Jerome Powell expressed concerns about rising inflation and low growth, indicating a cautious approach to monetary policy amid increasing economic uncertainty [17] - The upcoming earnings reports from U.S. companies will provide insights into the microeconomic conditions and potential recession timelines [17]