Core Viewpoint - The article discusses the end of the QE era, highlighting the transition from quantitative easing (QE) to quantitative tightening (QT) and the implications for monetary policy and the Federal Reserve's balance sheet management [2][3]. Summary by Sections 1. Transition from QE to QT - The Federal Reserve has undergone four rounds of QE and two rounds of QT from 2008 to 2026, with total assets expected to remain above $6 trillion by the end of 2025 [2]. - In December 2025, the FOMC meeting indicated a restart of reserve management purchases (RMO) to maintain sufficient reserves, emphasizing the fundamental differences between RMP and QE [2]. 2. Framework of the Balance Sheet - The Fed's policy framework shifted from a "scarce reserves" model to a "ample reserves" model post-2008 financial crisis, where policy rates serve as the primary indicator of monetary policy stance rather than the balance sheet [2]. - Under the "ample reserves" framework, policy rates and the balance sheet operate under separate decision-making systems [2]. 3. Conditions for Future QE - The article posits that a return to QE or yield curve control (YCC) may be necessary if the Fed lowers interest rates, suggesting that 2026 could mark the final phase of the current liquidity easing cycle [3]. - It argues that the Fed's balance sheet is not strictly a one-way street of expansion, indicating that the QE era may be over until the next crisis arises [3]. 4. Observations from Local "Two Sessions" - The average GDP growth target for twenty provinces and cities is set at 5.1% for 2026, with various adjustments noted compared to 2025 targets [19]. - The article provides a detailed table of GDP growth targets, CPI targets, and other economic indicators for different provinces, reflecting a trend of slight downward adjustments in growth expectations [19].

Core Viewpoint - The article discusses the end of the QE era, highlighting the transition from quantitative easing (QE) to quantitative tightening (QT) and the implications for monetary policy and the Federal Reserve's balance sheet [2][3]. Group 1: Federal Reserve's Balance Sheet - The Federal Reserve has undergone four rounds of QE and two rounds of QT from 2008 to 2026, with total assets expected to remain above $6 trillion by the end of 2025 [2]. - The shift from a "scarce reserves" framework to a "ample reserves" framework has changed the operational approach of the Federal Reserve, where policy rates are now the primary indicator of monetary policy rather than the balance sheet [2]. Group 2: Monetary Policy Implications - The article suggests that a return to QE or Yield Curve Control (YCC) may be necessary if the Federal Reserve lowers interest rates to zero, indicating that the QE era may be over until the next crisis [3]. - The Federal Reserve's balance sheet is not a one-way street; it can contract as well as expand, which may influence future monetary policy decisions [3]. Group 3: Economic Growth Targets - The article notes that various provinces and cities in China have set GDP growth targets averaging 5.1% for 2026, reflecting a cautious approach to economic recovery [19]. - The targets indicate a slight downward adjustment compared to previous years, with some regions aiming for better-than-expected results [19].

Market Overview - The Shanghai Composite Index closed at 4118, down 0.96% for the day, with a 3.85% increase over the past five days and a 0.44% decrease over the past month [1] - The Shenzhen Composite Index closed at 2684, down 0.78% for the day, with a 5.71% increase over the past five days and a 2.27% decrease over the past month [1] - Large-cap indices showed a decline of 0.81% yesterday but a 0.63% increase over the past month, while mid-cap and small-cap indices experienced declines of 1.67% and 1.05% respectively [1] Industry Performance Top Gainers - The telecommunications equipment sector saw a daily increase of 4.32%, with a 4.7% rise over the past month and an impressive 87.85% increase over the past six months [2] - The agriculture sector, including planting and fishing, also performed well, with increases of 3.61% and 3.35% respectively for the day [2] Top Losers - Precious metals experienced a significant drop of 8.87% yesterday, despite a 59.71% increase over the past month and a staggering 116.25% increase over the past six months [2] - Industrial metals and energy metals also faced declines of 8.36% and 7.19% respectively for the day, although they had notable increases over the longer term [2] Investment Recommendations - The report recommends a focus on the "spring market trend," suggesting that the established path remains intact and advising investors to seize opportunities in style rotation [3] - The "Top Ten Gold Stocks" for February include Kweichow Moutai, Hualu Hengsheng, and Dier Laser, among others, with a particular emphasis on the "Iron Triangle" of Kweichow Moutai, Hualu Hengsheng, and Dier Laser [3][10] - The report highlights the potential for food and beverage, real estate, and cyclical sectors to become key rotation directions in the near term [10] Federal Reserve Insights - The report discusses the implications of Kevin Warsh's nomination as the Federal Reserve Chair, indicating a potential shift towards a more hawkish stance with a focus on the dollar's strength and inflation control [12][13] - It emphasizes that the Fed's approach may prioritize forward-looking decision-making, suggesting a return to rules that counteract prevailing trends [12] Aviation Industry Outlook - The aviation sector is expected to enter a "golden era," driven by supply constraints and increasing demand, particularly in international travel due to expanding visa-free policies [18] - The report notes that the supply of aircraft is likely to remain limited, with a significant number of planes expected to retire in the coming years, which will further tighten supply [18] - Recommended stocks in the aviation sector include China Eastern Airlines, China Southern Airlines, and Air China, among others, as they are well-positioned to benefit from these trends [18]

Core Viewpoint - The article discusses the implications of the Federal Reserve's balance sheet expansion and the end of the QE era, highlighting the potential shifts in liquidity and market dynamics [2] Group 1: Federal Reserve's Actions - The Federal Reserve has significantly expanded its balance sheet, which has led to increased liquidity in the financial system [2] - The article emphasizes that the era of Quantitative Easing (QE) is coming to an end, suggesting a transition towards tighter monetary policy [2] Group 2: Market Implications - The end of QE may lead to increased volatility in financial markets as liquidity conditions change [2] - Investors may need to adjust their strategies in response to the shifting landscape of monetary policy and its impact on asset prices [2] Group 3: Economic Outlook - The article suggests that the changes in the Federal Reserve's approach could have broader implications for economic growth and inflation [2] - It highlights the importance of monitoring economic indicators as the Fed navigates this transition [2]