Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - In 2026, hold non - ferrous metals, oil and gas, and rare earths until the US economy faces a recession crisis. The long - end interest rate in the US is likely to rise, and the US economy may overheat. The macro market's political volatility will decline, and the trading will focus on economic and policy factors. Gold is expected to reach around $6,000 per ounce, and silver's high is expected to be around $120 per ounce. Copper prices are expected to remain firm due to Fed rate cuts and supply - demand gaps. The electrolytic aluminum market may have an upward trend, with a global supply shortage [10][35][98]. Summary by Directory Asset Allocation: Macroeconomic Contradictions and Allocation Strategies - The US Treasury drives currency and inflation. The continuous growth of US Treasury debt is backed by GDP. Since 2000, the US government's expenditure/GDP ratio has been rising, and the deficit rate is high. If the stock market has a crisis, it may bring opportunities for commodities. The sensitivity of non - ferrous metals to interest rates has increased since 2020, and the game between the Fed and global commodity inflation has intensified [4][13]. - In 2026, hold non - ferrous metals, oil and gas, and rare earths. The US economy may overheat, and the long - end interest rate is likely to rise. The macro market's political volatility will decline, and trading will focus on economic and policy factors [10][35]. Precious Metals: Where Are Gold, Silver, Platinum, and Palladium Headed? - Gold is at a new starting point. Due to geopolitical risks and dovish Fed expectations, it is recommended to increase gold allocation, focus on unilateral long positions and call option strategies. For silver, it is recommended to take profit on long positions and consider long positions in the gold - silver ratio. In 2026, gold is expected to reach around $6,000 per ounce, and silver is expected to have a high of around $120 per ounce [29][35]. - Platinum and palladium are driven by the precious metals sector. They have strong follow - up elasticity but are also affected by the callback of gold and silver. The current upward trend of platinum is relatively healthy, and there is a possibility of a new high. Palladium may have supplementary upward momentum [36]. Copper: How to Choose the Trading Mode under the Background of Weak Reality and Strong Expectations? - In terms of trading, copper price volatility has declined, and the positions of SHFE and LME copper are at historical highs. The term structure of SHFE copper has weakened, and the spot import loss has narrowed. Globally, the total copper inventory is at a historical high, and the LC spread has narrowed [37][44][48]. - The global copper mine supply in 2025 was lower than expected, and the increase in 2026 is limited. The supply disturbance has increased, mainly due to factors such as reduced ore grades, strikes, and geopolitics. The domestic smelting capacity is expanding, and the refined copper output is expected to increase by 68.75 million tons in 2026 [62][66][69]. - In terms of consumption, high - quality consumption such as AI computing centers and new energy consumption contribute significantly to copper consumption. The "14th Five - Year Plan" in China supports power grid investment, which will drive copper consumption. Traditional industries also show an increase in copper consumption, but there are differences among countries [75][80][92]. - The global refined copper supply will shift from surplus in 2025 to a shortage in 2026. It is expected that the global copper supply will have a shortage of 197,000 tons in 2026, and the Chinese market will have a shortage of 191,500 tons. Copper prices are expected to remain firm in 2026 [95][96][98]. Electrolytic Aluminum: How to Grasp the Contradictions and Rhythms after the Abnormal Breakthrough? - In 2025, the electrolytic aluminum market was in a state of shock convergence. In the fourth quarter, the stock - futures linkage opened up the upward elasticity. In 2026, it is expected that the market will continue the upward - looking trend, with a global supply shortage of 420,000 - 760,000 tons. The short - term rhythm needs to pay attention to the decline in photovoltaic enterprise production, and the risks include macro - recession and over - production in Indonesia [100][101][104]. - Currently, the Shanghai aluminum is in a high - level shock, with a neutral - strong position. The short - term micro - demand is weak, but the macro - risk preference is optimistic, and it has marginal upward momentum [110]. Over - the - Counter Options: How to Use Option Hedging Tools under High Volatility and High Prices? - For long positions, when the price is high, consider replacing with in - the - money call options to retain the upside potential and control the maximum drawdown. You can also use spread options to optimize costs with a capped upside [118][122]. - For selling hedging of inventory, consider buying put collar options to optimize the hedging cost, limit inventory price fluctuations between $100,000 - $120,000, and receive an option premium of $150 per ton [126].

2026开年A股市场表现强劲，成交额创历史新高。 2026年年初至今（1月12日）上证指数累计上涨4.9%，自2025年年底以来17连阳，表现在全球 主要市场居前。整体风格偏向成长，创业板指/科创50年初以来累计涨5.8%/12.5%；传媒/国防军工/计算机/有色金属分别累计涨 21.9%/20.1%/16.4%/10.0%。值得关注的是1月12日，A股市场总成交额3.64万亿元，创历史新高。 多重利好促成A股开年强势表现。 近期市场快速上涨受到多方面因素支撑：1）整体预期上，投资者对2026年尤其是上半年普遍预期较为乐观， 共识抬升一定程度引导资金提前布局。2）产业层面，科技成长相关产业近期事件性催化因素较多，如：去年年底以来商业航天卫星密集试飞， 周末根据国际电信联盟（ITU）披露的最新数据显示，近期我国向国际电信联盟提交新增20.3万颗卫星申请[1]；近期AI应用领域的创新进展，AI 和半导体等相关领域多个市场关注度较高的企业陆续IPO等。3）盈利方面，1月底通常将有较多A股上市公司集中披露年度业绩预告，低基数背 景下市场对业绩预期相对乐观，尤其利好中小市值风格。4）资金情况，居民存款搬家叙事延续，与指 ...

Core Viewpoint - The A-share market in 2025 shows a trend of steady growth, with the Shanghai Composite Index reaching a ten-year high, driven by the restructuring of international order and domestic industrial innovation [2][10][12]. Market Performance - In 2025, the Shanghai Composite Index increased by 18.4%, while the CSI 300 rose by 17.7%. The ChiNext Index and the STAR Market 50 surged by 49.6% and 35.9%, respectively, with the CSI Dividend Index declining by 1.4% [2]. - The peak of the Shanghai Composite Index reached 4034.1 in August 2025, marking a significant recovery [2]. Market Dynamics - The market experienced a shift in investor sentiment, with individual investors actively entering the market and institutional investors benefiting from policies encouraging long-term capital inflow [2][12]. - The overall market style favored small-cap stocks over large-cap stocks, and growth stocks outperformed value stocks, although a trend towards balance was observed by the end of the year [20][21]. Industry Performance - The leading sectors in 2025 included non-ferrous metals, communication, and electronics, with respective annual increases of 94.7%, 84.8%, and 47.9% [32]. - The non-ferrous metals sector was particularly boosted by rising prices of gold and copper, with gold prices increasing by approximately 64.6% and copper by 42.5% [32]. External and Internal Factors - The restructuring of the international monetary system and the innovation narrative in China's industry were identified as key drivers for the A-share market's performance [10][11]. - The U.S. dollar index fell by 9.4% in 2025, while gold prices surged, indicating a shift in the global monetary landscape [10]. Market Phases - The market's performance in 2025 can be divided into four phases: 1. January to March: Initial stability with a rise in risk appetite due to technological breakthroughs [23]. 2. April to June: Resilience following tariff shocks, with a rotation in growth sectors [24]. 3. Late June to August: Rapid growth driven by liquidity and improving fundamentals [25]. 4. Late August to December: A period of volatility following rapid gains, with the market entering a consolidation phase [26]. Future Outlook - For 2026, the A-share market is expected to continue its upward trend, supported by the ongoing restructuring of international relations and the application of AI technologies [36]. - The focus will be on sectors with high growth potential, including AI, innovative pharmaceuticals, and renewable energy, while maintaining a balanced approach to investment styles [37].

Core Viewpoint - The unprecedented surge in gold and silver prices reflects a deep-seated distrust in the value of the US dollar, driven by a combination of monetary policy decisions and escalating national debt [2][4][6]. Group 1: Price Surge and Market Dynamics - Gold prices reached a historic high of $4549.95 per ounce, with a year-to-date increase of 72%, while silver surged to $78.18, marking a 169% rise [2][4]. - The dramatic price increases are characterized as a "doomsday hedge," deviating from traditional inflation-hedging logic [2]. - The market is experiencing a collective frenzy as investors abandon paper currency in favor of precious metals [2][10]. Group 2: Monetary Policy and Economic Implications - The Federal Reserve's recent decision to lower the federal funds rate by 25 basis points to a range of 3.5%-3.75% is seen as a capitulation, contributing to the decline in dollar value [4]. - Continuous rate cuts amidst persistent inflation signal a shift towards a "flooding" monetary policy to sustain a fragile economic bubble [4][6]. - The market's expectation of further declines in borrowing costs has led to a compression of returns on dollar-denominated assets, making non-yielding assets like gold and silver more attractive [4][6]. Group 3: Debt Crisis and Investor Behavior - The escalating national debt, described as a "debt black hole," is prompting investors to flee from sovereign bonds and fiat currencies, further driving demand for gold [8]. - The concept of "devaluation trading" highlights the market's awareness of government strategies to dilute debt through money printing, leading to a loss of confidence in currency value [8]. - The US national debt has reached a critical point where each second sees an increase, undermining future purchasing power and creating a vicious cycle of debt [8][10]. Group 4: Future Outlook and Societal Impact - The surge in gold and silver prices is perceived as a preemptive move by savvy investors preparing for a potential liquidity crisis in 2026, which could be more severe than the 2008 crisis [10]. - The anticipated inflation resulting from currency devaluation is expected to significantly impact American households, effectively halving the purchasing power of the dollar [12]. - The current financial landscape is viewed as a profound restructuring of monetary order, signaling the end of the "credit fiat currency era" and favoring hard assets [12].

Group 1 - The core viewpoint of the report indicates that the recent weak performance of the A-share market is influenced by both internal and external factors, with external factors playing a dominant role. Despite this, the underlying logic of the current upward trend remains intact, suggesting a positive mid-term outlook for the A-share market [1][2][3] Group 2 - The report highlights three main investment themes for the current market conditions: 1) Growth sectors such as computing power, optical modules, and cloud computing infrastructure are expected to present opportunities, particularly in domestic markets. Applications in robotics, consumer electronics, intelligent driving, and software are also noted. Additionally, sectors like innovative pharmaceuticals, energy storage, and solid-state batteries are entering a growth cycle [1][6] 2) External demand is identified as a relatively certain growth opportunity, with recommendations to focus on sectors like home appliances, construction machinery, commercial buses, power grid equipment, gaming, and globally priced resources such as non-ferrous metals [1][6] 3) The report suggests monitoring cyclical reversals, particularly in industries approaching supply-demand improvement points or benefiting from policy support, such as chemicals, aquaculture, and new energy [1][6] Group 3 - The report emphasizes that the underlying drivers of the market's upward trend have not changed, with the macro policy shift since last year providing a foundation for stabilizing and recovering the market. Factors such as low interest rates, increased household deposits, and regulatory support for capital markets are highlighted as conducive to market growth [3][4] Group 4 - The report notes that the current market correction may provide a favorable opportunity for positioning ahead of the anticipated market performance in the first half of 2026. Despite limited positive catalysts in the short term, the overall valuation of the A-share market remains attractive compared to global peers and other asset classes [5][6]

Group 1 - The A-share market has experienced significant growth, with the ChiNext Index rising by 47% and the Sci-Tech 50 Index increasing by 43% by the end of September [1][2] - The current market rally is attributed to issues within the US dollar system, leading to a revaluation of RMB assets [3][10] - The US debt situation has deteriorated, with the debt-to-GDP ratio reaching 120.8% and external debt nearing 90% of GDP, raising concerns about the safety of US Treasury bonds [8][10] Group 2 - The Chinese economy is showing resilience, with advancements in AI and innovative pharmaceuticals, where self-developed drugs have increased from 4% to 42% of the pipeline [12][14] - Recent US-China trade negotiations have yielded unexpected results, including tariff reductions on certain tech products and new agreements on agricultural purchases, indicating a mutual understanding of the costs of trade conflicts [17][19] - The rise in rare earth prices reflects China's strengthened position in strategic resource pricing, positively impacting related industries and the stock market [20][22] Group 3 - The shift in asset pricing dynamics is evident, with the Chinese bond market becoming a new benchmark, as the risk premium for the Hang Seng Index has increased from 4% to 7% when calculated against Chinese bonds [24] - Global investment patterns are changing, with long-term funds beginning to allocate more towards RMB assets, moving away from the previously imbalanced allocation favoring US assets [24][26] - The current market conditions represent a historic opportunity for asset value reconfiguration, as the RMB assets are being liberated from the constraints of the US dollar system [29][31]

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around global asset allocation, focusing on the stock and gold markets, particularly in the context of China and the United States. Core Insights and Arguments 1. **Global Market Trends**: The global stock and gold markets are benefiting from a technological revolution, with growth stocks outperforming value stocks. Chinese stocks are performing better than U.S. stocks. Recommendations include overweighting gold and Chinese tech stocks while underweighting commodities and U.S. dollar assets, a strategy that has been validated by market prices [1][2][28]. 2. **Current Market Conditions**: U.S., A-share, and Hong Kong stocks are in a bull market, with A-share and Hong Kong stocks nearing historical medians. The U.S. stock market and gold have had prolonged bull markets but still have room for growth. The key to determining the peak of Chinese stocks lies in economic policies, liquidity, and earnings valuations [1][6][18]. 3. **Investment Concerns for 2026**: Two main concerns for 2026 are whether the bull markets in stocks and gold can continue and what measures to take if market conditions change. Recent pullbacks in Chinese, U.S. stocks, and gold indicate that the market is contemplating potential changes in future trends [3][4]. 4. **Valuation Analysis**: Current valuations show that gold, U.S. stocks, and Chinese bonds are relatively high, while U.S. bonds and commodities are undervalued. A-shares and Hong Kong stocks are at moderate valuations. The geopolitical events can impact markets, typically negatively affecting stocks while boosting gold and commodities [4][22][23]. 5. **Asset Class Switching Patterns**: Historical data indicates that U.S. stocks have a longer bull market duration (84% of the time) compared to the more volatile Chinese stocks. The switching patterns of different asset classes require careful monitoring of market peaks [5][6]. 6. **Top Prediction Challenges**: Predicting market tops is complicated by various bullish narratives and the difficulty of timely decision-making even when correct signals are received. The need for a multi-dimensional approach to analyze market signals is emphasized [10][11][12]. 7. **Impact of U.S. Federal Reserve Policies**: The Fed's monetary policy is crucial for asset prices. Current loose policies support asset prices, but potential tightening could pressure both stocks and gold. The Fed's personnel changes may lead to a more dovish stance in the long term [20][21]. 8. **China's Economic Policy Influence**: China's incremental policies must meet expectations to avoid negative impacts on macro liquidity. The government is committed to stabilizing growth, which is expected to support the economy and maintain stable M1 and M2 growth rates [21][24]. 9. **Geopolitical Events**: Recent geopolitical events, such as trade wars, have significantly influenced market trends, generally negatively impacting stocks while benefiting gold and commodities [23]. 10. **Valuation Concerns**: High valuations in gold and U.S. stocks increase the risk of market corrections. However, there is no clear evidence that these factors will reverse the current bull market trends, suggesting a continued overweight in Chinese stocks and gold [25][28]. Other Important but Possibly Overlooked Content 1. **Commodity Allocation Strategy**: Increasing commodity allocations is recommended to hedge against potential changes in stock and gold bull markets. Commodities are currently undervalued and could benefit from various scenarios, including better-than-expected economic performance or geopolitical shocks [26][29]. 2. **Specific Asset Class Recommendations**: - **Chinese Stocks**: Maintain an overweight position with a more balanced style, anticipating value and cyclical sectors to catch up. - **Chinese Bonds**: Downgrade from standard to underweight due to better opportunities in other assets. - **U.S. Stocks**: Maintain a standard allocation, given the high valuations and better performance of non-dollar assets. - **Gold**: Continue to overweight but be cautious of volatility, suggesting a strategy of buying on dips rather than chasing prices [27][29].

Core Viewpoint - The current gold bull market is likely not over, as its price increase and duration are still below historical comparisons from the 1970s and 2000s [1] Gold Market Insights - The continuation of the gold bull market is contingent on the Federal Reserve's monetary policy and the U.S. economy not entering a strong recovery phase characterized by "declining inflation and rising growth" [1] - There is a possibility that gold prices could exceed $5,000 per ounce next year if current trends persist [1] - Despite a clear bull market logic, gold is currently considered overvalued, suggesting a strategy of increasing allocation during dips rather than chasing prices [1] Stock Market Insights - Chinese stocks are expected to benefit from the AI technology wave and ample liquidity, with reasonable valuations [1] - Although year-end volatility may increase, there are no signals indicating a market top, thus maintaining an overweight position is recommended [1] - The U.S. stock market also has a bullish outlook, but concerns about high valuations and low elasticity during the dollar depreciation cycle suggest a neutral allocation [2] Fixed Income Insights - Chinese interest rates have room to decline, but the current valuation of Chinese bonds is high, limiting upside potential, leading to a recommendation for underweighting [2] - U.S. Treasuries benefit from the Fed's easing cycle but face mid-term inflation and debt risks, resulting in a neutral allocation recommendation [2] Market Top Indicators - The analysis of market tops for Chinese stocks and gold highlights the importance of economic and policy signals, with economic slowdowns or tightening policies often indicating market tops [4][5] - The difficulty in accurately timing market tops is noted, particularly due to the close timing of economic and market turning points [4] 2026 Market Outlook Factors - Four key factors that could alter the bullish trends for stocks and gold in 2026 include unexpected growth shifts, tightening policies, high valuations, and geopolitical shocks [6][7][8] - Current data does not support a significant improvement in economic growth for China and the U.S., suggesting that the bullish trends for stocks and gold are likely to continue [8] Asset Allocation Recommendations - The recommendation is to overweight Chinese stocks and gold, maintain a neutral position in U.S. stocks and bonds, and adjust commodity allocations to neutral [9] - The strategy emphasizes the importance of being prepared for potential market trend changes by increasing commodity allocations [9]

Group 1 - The article discusses the importance of identifying market tops for Chinese stocks and gold, emphasizing that economic and policy signals are crucial for making accurate predictions [1][10][40] - It highlights that the U.S. stock market has a long bull market duration, while Chinese stocks experience more frequent bull-bear switches, making timing more critical for Chinese stocks [5][10] - The analysis indicates that gold's bull and bear markets are lengthy with low switching frequency, suggesting that identifying tops is also significant for gold [1][5] Group 2 - Four key factors are identified that could potentially alter the bull market trends for stocks and gold in 2026: growth direction, tightening policies, high valuations, and geopolitical shocks [2][39] - The current economic conditions in China are characterized as a "weak recovery," while the U.S. is moving towards "stagflation," which could impact the performance of stocks and gold differently [2][41] - The article suggests that while there are no immediate signals indicating a top for the current bull markets, high valuations for gold may lead to increased volatility in the future [26][36][40] Group 3 - The asset allocation recommendation includes overweighting Chinese stocks and gold, while maintaining a neutral position in U.S. stocks and bonds, and adjusting commodity exposure to neutral [3][4] - The rationale for these recommendations is based on the ongoing AI technology wave and liquidity conditions benefiting Chinese stocks, while gold is supported by the current monetary policy environment [3][4] - The article notes that despite potential volatility, there are no clear signals indicating a market top for Chinese stocks or gold at this time [25][36]

Core Insights - The report from CICC highlights four key factors that could potentially alter the bullish trends of stocks and gold by 2026, including economic growth shifts, tightening policies, high valuations, and geopolitical shocks [1][2]. Group 1: Key Factors - **Economic Growth Shift**: Current weak recovery in China and a potential stagflation in the U.S. could change if policies lead to better-than-expected economic recovery, which may extend the stock bull market but negatively impact gold [1]. - **Tightening Policies**: Both China and the U.S. are currently in a loose policy environment. However, if the Federal Reserve slows down interest rate cuts due to inflation concerns, or if China's incremental policy pace slows, it could negatively affect both stock and gold bull markets [1]. - **High Valuations**: Chinese stocks are reasonably valued, but both gold and U.S. stocks are facing high valuation pressures, which could pose risks [1]. - **Geopolitical Shocks**: Unexpected geopolitical events could prolong the gold bull market but may adversely affect the stock bull market [1]. Group 2: Investment Recommendations - **Asset Allocation**: The company recommends an overweight position in Chinese stocks and gold, a standard allocation in U.S. stocks and bonds, and an adjustment of commodities to standard allocation while reducing Chinese bonds to underweight [2][3]. - **Chinese Stocks**: Benefiting from the AI technology wave and ample liquidity, Chinese stocks are seen as having reasonable valuations. Despite potential year-end volatility, there are no signals indicating a market peak, thus maintaining an overweight position is advised [3]. - **U.S. Stocks**: While the bullish logic applies to U.S. stocks, concerns over high valuations and low elasticity during a dollar depreciation cycle suggest a standard allocation is more prudent [3]. - **Commodities**: Commodities are recommended to be adjusted to standard allocation as they can hedge against changes in gold and stock trends while benefiting from post-liquidity recovery [3]. - **Gold**: Gold is expected to benefit from the Federal Reserve's easing cycle and monetary order reconstruction, but due to high valuations, an overweight position is suggested with a focus on buying on dips rather than chasing prices [3].