Core Viewpoint - The A-share market has shown strong performance since the beginning of 2026, with significant trading volume and a continuous rise in the index, despite recent outflows from broad-based ETFs [3][50]. Group 1: Valuation Perspective - The risk premium for the Wind All A Index is currently at 2.45%, indicating that the market has not yet reached a peak signal, as it is still below the +1 standard deviation level [7]. - The latest PE-TTM for the Wind All A Index is 23.28, approaching the +2 standard deviation level of 23.45, suggesting that future market growth may rely more on fundamental factors [10]. - Major indices like the Shanghai Composite and the ChiNext Index have PE-TTM percentiles below 50%, indicating that they are not overvalued compared to historical highs [11]. Group 2: Trading Perspective - The trading volume reached a peak of 3.98 trillion yuan on January 14, 2026, indicating high market enthusiasm, although it has slightly decreased since then [13][14]. - The turnover rate has increased from around 1% to approximately 3%, reflecting a higher trading activity compared to previous bull markets [15]. - The trading congestion index has shown a slight decline, suggesting that while trading is concentrated in certain sectors, it has not reached extreme levels [18]. Group 3: Funding Perspective - The household deposit market value ratio indicates potential for incremental funds to flow into the stock market, supporting the ongoing bullish trend [29]. - The non-bank household deposit growth rate has shown a positive trend, suggesting that there is still room for incremental funds to enter the market [33]. - The total margin balance has increased, indicating a higher risk appetite among investors, although it remains below the peak levels seen in 2015 [38][40]. Group 4: External Capital Perspective - The northbound capital's trading proportion is currently at 11.85%, which is lower than the highs seen in previous bull markets, indicating potential for future inflows [45][48]. - The net outflow from broad-based ETFs in January 2026 does not necessarily indicate a market reversal, as similar patterns were observed in previous bullish environments [40].

Macro Liquidity - The US dollar index rebounded last week, and the degree of "inversion" in the China-US interest rate spread deepened. The nominal and real yields of 10Y US Treasuries both increased, indicating a rise in inflation expectations [1][15] - Offshore dollar liquidity has marginally eased, while the domestic interbank funding situation remains overall balanced and slightly loose, with a slight narrowing of the yield spread between 10Y and 1Y [1][20] Market Trading Activity - Overall market trading activity has increased, with most industry trading heat above the 80th percentile. Major index volatility has also risen, although most industry volatilities remain below the 40th historical percentile [1][27] - The trading heat in sectors such as light industry, textiles, retail, computing, construction materials, and financial real estate is notably high [1][30] Institutional Research - High research activity is observed in sectors such as electronics, pharmaceuticals, home appliances, computing, retail, and non-ferrous metals, with real estate, home appliances, oil and petrochemicals, and telecommunications also seeing a rise in research activity [2] Analyst Forecasts - Analysts have raised net profit forecasts for the entire A-share market for 2025/2026. Sectors such as telecommunications, chemicals, non-ferrous metals, electric new energy, electronics, non-bank financials, construction, media, food and beverage, and home appliances have all seen upward adjustments in their profit forecasts [3][4] - The net profit forecasts for the CSI 500, ChiNext Index, and CSI 300 have been raised, while the forecast for the SSE 50 has been adjusted both up and down [3][4] - In terms of investment style, mid-cap/small-cap growth and mid-cap value sectors have seen upward adjustments in their profit forecasts for 2025/2026, while large-cap growth and large/mid/small-cap value sectors have seen downward adjustments [3][4] Northbound Trading Activity - Northbound trading activity has rebounded, with overall net purchases of A-shares. The average daily trading volume and proportion of northbound trading have both increased significantly [5][6] - Based on the top 10 active stocks, the trading volume ratio for northbound trading in sectors such as banking, telecommunications, electric utilities, computing, electric new energy, and non-ferrous metals has risen, while it has fallen in sectors like home appliances, automobiles, electronics, non-bank financials, pharmaceuticals, and agriculture [5][6] Margin Financing Activity - Margin financing activity has increased, with net purchases amounting to 22.546 billion yuan last week. The main net purchases were in non-ferrous metals, computing, non-bank financials, electric new energy, and electronics, while net sales were seen in food and beverage, transportation, oil and petrochemicals, and real estate [4][6] - The financing purchase ratio has increased in sectors such as coal, textiles, agriculture, military, and transportation [4][6] Fund Activity - Active equity funds have increased their positions, particularly in sectors like automobiles, TMT, home appliances, electric new energy, pharmaceuticals, and non-ferrous metals, while reducing positions in oil and petrochemicals, electric utilities, real estate, coal, and construction [6][9] - ETFs have seen overall net subscriptions, primarily driven by individual ETFs, with significant net purchases in sectors like electronics, military, banking, coal, steel, and machinery, while net sales were observed in non-bank financials, pharmaceuticals, electric new energy, telecommunications, media, and computing [6][9]