Report Summary 1. Report Industry Investment Rating No information provided in the document. 2. Core View of the Report - A-share major indices rose significantly this week, with the Science and Technology Innovation 50 Index up over 9%. The four stock index futures also increased, with small and mid-cap stocks outperforming large-cap blue-chip stocks. The market had a good start in the first trading week of 2026. Market trading activity rebounded significantly compared to last week, and northbound capital trading became active again. [5][87] - Overseas, the number of initial jobless claims in the US last week was lower than expected, and the number of Challenger corporate layoffs in December hit a 17 - month low. Domestically, in December, both CPI and PPI increased, with the year - on - year increase of CPI expanding and the month - on - month change turning from decline to increase, and the decline of PPI narrowing. The three official PMI indices announced before the holiday rebounded from below the boom - bust line to the expansion range. Multiple factors support the upward movement of A - shares. [87] 3. Summary by Relevant Catalogs 3.1. Market Review | Futures/Spot | Contract/Index Name | Weekly Change (%) | Friday Change (%) | Closing Price | | --- | --- | --- | --- | --- | | Futures | IF2603 | 3.13 | 0.71 | 4743.8 | | | IH2603 | 3.63 | 0.62 | 3134.8 | | | IC2603 | 9.17 | 2.99 | 8037.8 | | | IM2603 | 8.23 | 3.07 | 8048.4 | | Spot | CSI 300 | 2.79 | 0.45 | 4758.92 | | | SSE 50 | 3.40 | 0.39 | 3134.32 | | | CSI 500 | 7.92 | 2.05 | 8056.69 | | | CSI 1000 | 7.03 | 1.98 | 8129.18 | [8] 3.2. News Overview - The US ISM manufacturing index in December 2025 slightly decreased from 48.2 to 47.9, remaining below 50 for 10 consecutive months and hitting a new low since October 2024. The ISM services PMI index rose 1.8 points to 54.4, the highest since October 2024. [11] - ADP data showed that private - sector employment in US enterprises increased by 41,000 in December, reversing the previous month's decline but lower than market expectations. The number of JOLTS job openings in the US in November 2025 dropped to 7.146 million, far lower than the expected 7.6 million, hitting a new low since September 2024. The number of layoffs in December was 35,553, a 17 - month low. [11] - On January 9, the National Bureau of Statistics announced that in December 2025, China's CPI increased by 0.8% year - on - year (previous value: 0.7%) and 0.2% month - on - month (previous value: - 0.1%); PPI decreased by 1.9% year - on - year (previous value: - 2.2%) and increased by 0.2% month - on - month (previous value: 0.1%). [11] 3.3. Weekly Market Data - **Domestic Major Indices**: The Shanghai Composite Index rose 3.82% weekly, the Shenzhen Component Index rose 4.40%, the Science and Technology Innovation 50 Index rose 9.80%, the SME 100 Index rose 4.94%, and the ChiNext Index rose 3.89%. [14] - **Overseas Major Indices (as of Thursday)**: The S&P 500 rose 0.92%, the UK FTSE 100 rose 0.94%, the Nikkei 225 rose 3.18%, and the Hang Seng Index fell 0.41%. [15] - **Industry Sector Performance**: Most industry sectors rose, with the comprehensive, national defense and military industry, and media sectors strengthening significantly. Only the banking sector fell. [19] - **Industry Sector Main Capital Flow**: Main capital in most industries showed a net outflow, with significant net outflows in the electronics, power equipment, and communication sectors. [22] - **SHIBOR Short - Term Interest Rates**: SHIBOR short - term interest rates rose and then fell, and capital prices remained at a low level. [27] - **Other Data**: This week, major shareholders had a net reduction of 11.98 billion yuan in the secondary market, and the market value of restricted shares lifted was 164.993 billion yuan. Northbound capital had a total trading volume of 1266.11 billion yuan. The basis of the main contracts of IF, IH, IC, and IM strengthened. [30][38] 3.4. Market Outlook and Strategy - A - share major indices and the four stock index futures rose this week, and small and mid - cap stocks were stronger than large - cap blue - chip stocks. Multiple factors support the upward movement of A - shares. The economic climate has returned to the expansion range, and inflation recovery has a positive impact on the stock market at the macro - level. [87] - The US labor market is showing a mild recovery, pushing up the US dollar exchange rate. However, due to the settlement needs of export enterprises and the expectation of economic recovery, the RMB is still in an appreciation channel, and the exchange rate remains strong, supporting the expectation of loose monetary policy in the first quarter. [87] - Since the Spring Festival this year is relatively late, the market has begun to trade the policy expectations of the Two Sessions to be held in early March in advance, and the spring market of A - shares is significantly advanced. [87]

Market Overview - The A-share market experienced moderate fluctuations last week, with Wind All A index down by 0.15% and an average daily trading volume of 1.76 trillion yuan [3] - The implied volatility for options slightly increased, with the 1000 IV at 18.56% and 300 IV at 16.03% [3] - The financing balance decreased by 7.6 billion yuan to 2.475 trillion yuan, indicating a slight contraction in market liquidity [3] Stock Index Analysis - The stock index is expected to continue oscillating within the range established since October, with limited risk of a significant downturn [3] - The cumulative year-on-year revenue growth for the CSI 1000 in Q3 was approximately 2.6%, providing substantial support for its current valuation [3] - Conditions for a spring rally are not currently prominent, suggesting that the upcoming market movements may not be as vigorous as in previous years [3] Sector Performance - The market is increasingly focused on sectors with performance certainty, particularly in technology [4] - Key themes include high ROE, strong year-on-year revenue growth, and robust operating cash flow [4] - Sectors such as network connection, service robots, industrial internet services, consumer electronics, semiconductor equipment, gold, tungsten, and PCB are expected to have strong performance certainty by 2026 [4] Bond Market Dynamics - The bond market showed signs of recovery, with the central bank restarting 14-day reverse repos, indicating a stabilizing attitude towards liquidity [5][18] - As of December 19, the yields for 2-year, 5-year, 10-year, and 30-year government bonds were 1.38%, 1.60%, 1.83%, and 2.23% respectively, reflecting slight decreases from the previous week [5][18] - The net issuance of government bonds was negative at -192 billion yuan, with a net issuance of local bonds at 281 billion yuan [7][20] Economic Policy Insights - The Central Economic Work Conference set a positive tone for economic work in 2026, emphasizing the need for counter-cyclical and cross-cyclical adjustments [21] - The conference highlighted the importance of boosting domestic demand and stabilizing investment, with plans to increase central budget investments [22] - Inflation is expected to gradually recover, supported by policies aimed at maintaining liquidity and promoting consumption [22] Precious Metals Market - Gold prices rose by 0.97% to $4341.058 per ounce, while silver surged by 8.28% to $67.049 per ounce, reaching a new historical high [23] - The gold-silver ratio decreased to approximately 64.7, indicating a strong performance in precious metals [23] - Market sentiment remains optimistic regarding precious metals, with expectations for continued upward momentum [25]

Report Industry Investment Rating No specific investment rating for the industry is provided in the report. Core Viewpoints - China's inflation moderately rebounded in September, and the market's expectation of the Fed's interest rate cut has increased [1]. - Amid rising China-US tariff frictions, there are risks of tariff escalation before the South Korea APEC Summit from October 28th to November 1st [2]. - The US government shutdown has entered its third week, and the market has underestimated the severity of the situation. The Fed is expected to cut interest rates [3]. - For commodities, focus on sectors such as gold and non-ferrous metals. Consider going long on industrial products and precious metals at low prices [4][5]. Summary by Related Catalogs Market Analysis - In August, China faced increased economic pressure with weak industrial, investment, and consumption data, along with rising external tariff pressure. The government has proposed policies to stabilize growth, with new policy - based financial instruments totaling 500 billion yuan [1]. - In September, China's exports and imports in US dollars both exceeded expectations. M2 and M1 growth rates changed, and the M1 - M2 gap narrowed. Newly added social financing decreased, mainly due to slower government bond financing. The growth of RMB loans was affected by weak short - term consumer loans [1]. - In September, China's CPI decreased by 0.3% year - on - year, and the core CPI returned to 1% for the first time in 19 months. The decline in PPI narrowed to 2.3%, higher than market expectations. There is still room for incremental policies in the fourth quarter to support prices [1]. - On October 15th, the A - share market strengthened, with the Shanghai Composite Index above 3900 points and over 4300 stocks rising. Robot concept stocks were strong [1]. Tariff Situation - China - US tariff frictions have escalated. The US has taken measures such as adding Chinese companies to the entity list and imposing tariffs on multiple products. China has responded with export controls and other counter - measures. There are risks of tariff escalation before the South Korea APEC Summit [2]. US Government Shutdown - The US government shutdown has entered its third week. Trump has threatened to fire federal employees, and economic data release has been affected. The Fed is expected to cut interest rates, with a 96.7% probability of a 25 - BP cut in October [3]. Commodity Market - For the black sector, downstream demand expectations are weak. The non - ferrous sector is supported by global easing expectations with long - term supply constraints. The energy sector has a relatively loose supply in the medium term, with OPEC+ planning to increase production [4]. - In the chemical sector, there is "anti - involution" space for products like methanol, PVC, caustic soda, and urea. Agricultural products are driven by tariffs and inflation expectations but need fundamental signals and are affected by China - US negotiations [4]. - Precious metals, especially gold, are expected to strengthen due to the US government shutdown and central bank purchases. On October 15th, spot gold exceeded $4200 per ounce, up nearly 1.4% [4]. Strategy - For commodities and stock index futures, it is recommended to go long on industrial products and precious metals at low prices [5]. Key News - China's M2, M1, and M0 money supply growth rates in September changed compared to the previous values. The social financing scale and new RMB loans from January to September increased [7]. - The US government shutdown continues, and the White House plans to continue layoffs while ensuring pay for the military and law enforcement [7]. - Fed Chairman Powell hinted at a possible end to balance - sheet reduction, and the market expects interest rate cuts. The US Treasury Secretary plans to submit Fed chairman candidates after Thanksgiving [7]. - Argentina's stock index fell, and the US said it would stop financial support if President Milei loses the election. Spot gold prices rose [7].