Report Investment Rating - The report does not mention the industry investment rating. Core Viewpoints - After the meeting between the Chinese and US heads of state, the trading hot - spot of the year may have passed. The next month is likely to be a period of asset allocation re - balancing. Bonds have hedging and trading value, and in the equity market, both structural balance and absolute position control are important [3]. - The meeting between the Chinese and US heads of state achieved a win - win result. The tariffs of both sides are better than before September. The Chinese side obtained a 10% reduction in the so - called "fentanyl tariff" [3]. - In the capital market, both the Chinese and US equity markets reached new highs before the meeting. After the meeting, the stock markets have digested part of the "CO (Chickens Out)" in the "TACO" trading. Although the industrial trends of high - performance and high - risk - preference varieties are still solid, they face high institutional congestion and weakened external industrial catalysts [3]. - For stocks, when technology becomes less sensitive to good news due to previous rises, it is advisable to choose sectors weakly related to technology and relatively lagging in the past for hedging, such as finance, chemical industry in the pro - cyclical sector, and innovative drugs under the warming Sino - US narrative [3]. Summary by Directory 1. Tariff Transaction: Sino - US Win - Win but Market Priced in Advance - The meeting between the Chinese and US heads of state achieved a win - win result, and trade frictions were at least temporarily alleviated. The US will cancel the 10% so - called "fentanyl tariff" on Chinese goods and continue to suspend the 24% reciprocal tariff for one year. China will adjust corresponding counter - measures [6]. - The US actual comprehensive tax rate on China this year is 20%, which is almost the same as that on some Asia - Pacific countries. This may invalidate the "substitution effect" of tariffs and refute the view that other economies will seize China's export share [7]. - The market has priced in the meeting in advance. Both Chinese and US stock indices reached new highs before the meeting (October 29) and then pulled back [7]. 2. Risk Assets May Have Been Priced in Advance, Cyclical Products Remain Weak - The anticipation of the meeting between the Chinese and US heads of state and the various catalysts such as technology narratives and super - expected performances after the Fed's rate cuts in September are the reasons for the advance pricing of risk assets [9]. - The 10Y US Treasury yield has declined since September. The US stock market and the corresponding A - share technology sector have good performances, but these may have been reflected in the previous prices. During the super - week of macro and earnings reports, the participation of incremental funds in the technology leaders held by public funds is low. The SCI 50 index, which has a high proportion of technology leaders, fell by 3.2% this week while the Shanghai Composite Index rose by 0.1% [9]. - From the perspective of commodities, cyclical products remain weak. Except for some leading "anti - involution" concept stocks like coking coal, other varieties have returned to the downward channel [10]. - From the perspective of growth, the demand side may still put pressure on the cyclical sector. The GDP growth rate weakened in the third quarter, and the manufacturing PMI in October continued to decline. The real estate and infrastructure sectors have not shown significant improvement expectations [13]. 3. Bond Market: How to Understand Low Cost - Effectiveness and FOMO? - The logic of going long in the bond market is mainly driven by chip trading. Insurance and banks have a demand for a good start in the fourth quarter, and the subsequent supply of bonds is small. As of October, 83% of government bonds have been issued [14][19]. - The duration of public bond funds decreased to the lowest point in the third quarter and has a demand for duration game in the fourth quarter. There is a certain space for narrowing spreads, such as the 30 - 10 spread and the secondary - tiered capital bond spread [19]. - The news about the redemption fee policy of public bond funds is mainly positive, which reduces the market's concern about redemptions at the end of the year. The central bank's resumption of Treasury bond trading stimulates the market sentiment. Although the point cost - effectiveness of bonds is not high, there is trading space for spreads [21].