Group 1: Consumer Confidence and Economic Indicators - The final consumer confidence index for November dropped to 51 from 53.6 in October, marking a historical low for the current conditions index at 51.1, which fell by 7.5 points [1][3] - Consumers' assessment of their personal financial situation decreased by approximately 15%, with 47% of consumers mentioning high prices negatively impacting their finances, marking the fifth consecutive month of increase in this sentiment [3][4] - Expectations regarding the job market worsened, with 69% of consumers anticipating a rise in unemployment over the next year, up from 64% in October, more than double the 32% from November last year [3][4] Group 2: Market Performance of Consumer Sectors - The consumer sectors in the U.S. stock market have faced significant declines, with the essential consumer goods sector dropping three times more than the S&P 500 index since October, while the non-essential consumer goods sector fell by 5.2%, making them the worst-performing sectors [2][3] - If the market closes this week as projected, it will be the first time since 1990 that both non-essential and essential consumer goods sectors are the weakest among the 11 sectors of the S&P 500 [2][3] Group 3: Broader Economic Concerns - Consumer spending accounts for approximately 70% of the U.S. economy, indicating that consumer activity is a critical variable despite market focus on companies like Nvidia [3] - The ongoing government shutdown has disrupted food assistance and affected many federal employees' pay, contributing to consumer frustration regarding high prices and shrinking incomes [4][5] - The unemployment rate rose to 4.4% in September, the highest level since July 2020, with initial claims for unemployment insurance reaching a four-year high, indicating increasing difficulty for unemployed individuals to find work [4][5]

Core Viewpoint - The article highlights a significant decline in consumer confidence in the U.S., indicating potential economic challenges ahead, particularly in the consumer sector [2][4]. Consumer Confidence - The University of Michigan reported that the final consumer confidence index for November dropped to 51, down from 53.6 in October, marking a historical low [2][4]. - The current conditions index fell by 7.5 points to 51.1, also a record low [4]. - Consumer assessments of personal financial situations have declined by approximately 15%, with 47% of consumers citing high prices as a negative impact on their finances, a continuous increase over five months [4][5]. Stock Market Performance - The consumer sector in the U.S. stock market has faced significant selling pressure, with the essential consumer goods sector declining at three times the rate of the S&P 500 index since October [2][3]. - The non-essential consumer goods sector has also seen a 5.2% decline, making it one of the worst-performing sectors during this period [2][3]. - If the market closes this week as projected, it will be the first time since 1990 that both essential and non-essential consumer sectors are the weakest among the 11 sectors of the S&P 500 [3]. Economic Implications - Consumer spending accounts for about 70% of the U.S. economy, making it a critical variable despite the market's focus on other sectors like AI [4]. - The article suggests that the weak performance of the consumer sector may indicate a broader economic concern, as consumer sentiment is closely tied to spending behavior [4]. Employment Concerns - There is growing anxiety regarding the job market, with 69% of consumers expecting an increase in unemployment over the next year, up from 64% in October [4][5]. - The unemployment rate rose to 4.4% in September, the highest since July 2020, and the number of individuals applying for unemployment insurance has reached a four-year high [5]. Income Disparity - The article notes a widening income gap among consumers, with wealthier individuals maintaining spending levels while those without stock assets are experiencing deteriorating financial conditions [5].

Core Insights - The global asset allocation trend is shifting towards increasing allocation in RMB assets, driven by China's economic recovery and technological innovations like AI, with A-shares expected to continue rising and sectors like new energy and consumption showing investment value [1][2][4] Global Asset Allocation Trends - Two main themes have emerged in global asset allocation: the first is risk aversion, with gold prices rising significantly as central banks increase their gold holdings, indicating strong market demand for safe-haven assets [4] - The second theme is the "valuation gap effect" in risk assets, where funds are moving towards undervalued assets, particularly in the Asia-Pacific region, as the dollar's strength diminishes [4] - The increasing convertibility and liquidity of RMB assets are enhancing their appeal to international capital [4] A-Share Market Outlook - The A-share market has shown resilience, with the Shanghai Composite Index experiencing a maximum increase of over 20% this year, maintaining a volatile yet upward trend after surpassing the 4000-point mark [7] - The current 4000-point level in A-shares differs fundamentally from previous bull markets, with a shift from retail and leveraged funds to institutional capital driving the market [9] - A-shares are expected to have a 20%-30% upside potential, supported by improving valuation and earnings [11] Investment Focus Areas - Three key investment directions are identified: technology sector opportunities, new energy sector expected to lead in the cross-year market, and precious metals as safe-haven assets [11] - The energy sector, including both new and traditional energy, is seen as a core driver of technological development, with innovative pharmaceuticals also gaining attention [11] - There is a noted overheating in AI hardware, with a potential shift of funds towards software and application sectors, emphasizing the importance of application services [11] Cross-Year Market Expectations - The A-share market is poised for a cross-year rally, supported by stable trading volumes and the absence of earnings burdens during the reporting gap [12] - New energy is expected to be the leading sector in the upcoming cross-year market, with regional sectors benefiting from policy expectations also gaining traction [13] - The upcoming Central Economic Work Conference is anticipated to provide clear policy signals that could further energize the market [13]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - In the short - term, US technology stocks have significantly corrected, and domestic stock indices have also seen increased divergence. The Shanghai Composite Index has fallen to around 3800. However, in the medium - to - long - term, the domestic market is driven by liquidity, with continuous inflows of incremental funds. After the consolidation of stock indices, there is still upward momentum [3][4]. - The international situation is complex, but positive results have been achieved in China - US economic and trade consultations. The US has entered a new interest - rate cut cycle, which is beneficial for the appreciation of the RMB and the return of foreign capital, bringing new incremental funds [4]. - Current policies to stabilize the capital market are positive, and the bottom line of stock indices is clear. New technologies and new consumption are driving the economic outlook to stabilize and recover. The "15th Five - Year Plan" raises requirements for technological innovation and expands domestic demand [4]. - After the risk - free interest rate drops to a low level, the entry of medium - to - long - term funds and individual investors into the market will enter a new cycle [4]. - In the future, attention should be paid to trading volume. If the trading volume of the two markets can remain above 2 trillion yuan, the market can maintain relative strength. It is recommended to focus on technology - growth sectors with certain profitability, such as semiconductors and AI computing power, and also pay attention to the rotational allocation value of low - valuation defensive sectors such as finance (securities) and consumption [4]. 3. Summary According to Relevant Catalogs 3.1 Market Performance - This week, domestic stock indices mainly fluctuated. As of November 21, 2025, the Nasdaq Index fell 2.74%, the S&P 500 Index fell 1.95%, and the Hang Seng Tech Index fell 7.18%. The Shanghai Composite Index fell 3.90%, the CSI 1000 Index fell 5.80%, the SSE 50 Index fell 2.72%, the ChiNext Index fell 6.15%, and the STAR 50 Index fell 5.54%. Most of the 31 Shenwan primary industry indices declined this week, with many sectors such as power equipment, comprehensive, and commercial retail falling more than 5% [11][14]. 3.2 Liquidity - The 7 - day reverse repurchase rate of inter - bank deposit - type financial institutions (DR007) remained low. In October, 200 billion yuan of MLF was to be injected, and the yield of 10 - year treasury bonds was around 1.8%. - The increase in social financing was lower than the seasonal average, with declines in the two major sub - items of credit and government bonds. At the end of October, the year - on - year growth rate of social financing stock was 8.5%, slightly lower than that in September. The new social financing in October was 815 billion yuan, 30 billion yuan less than the same period last year, mainly affected by seasonal factors and the slowdown in government bond issuance. - The "scissors gap" between M1 and M2 continued to narrow. In October, the growth rate of M2 slowed down by 0.2 percentage points to 8.2% compared with September, and the M1 - M2 scissors gap narrowed to 2% (0.1 percentage point smaller than in September), indicating an increase in the "activity" of funds [15]. 3.3 Trading Data and Sentiment - This week, the trading volume of the two markets decreased, and the Shanghai Composite Index had a significant weekly decline. From January to October 2025, the cumulative number of newly opened A - share accounts in the A - share market was 22.4588 million, a year - on - year increase of 10.57%. The average daily trading volume of the two markets (MA5) remained around 2 trillion yuan, and liquidity was an important factor supporting the current index [24][26]. 3.4 Index Valuation - As of November 21, 2026, the latest PB of the Shanghai Composite Index was 16.10, with a percentile of 77.22, and the latest PB of the entire A - share market was 21.27, with a percentile of 79.56. Among the major stock indices, the valuation percentiles were in the order of CSI 1000 > CSI 500 > SSE 300 > SSE 50. The absolute valuation of the index was at a low level, but the percentile was relatively high [32]. 3.5 Index Industry Weights - As of June 30, 2025, in the SSE 50 Index, the weights of the banking, non - banking finance, and food and beverage sectors were relatively high, at 21.31%, 15.48%, and 13.88% respectively, and the electronics industry became the fourth - largest weighted industry. - In the SSE 300 Index, the weights were relatively dispersed, and the top three weighted industries were banking, non - banking finance, and electronics. - In the CSI 500 Index, the top three weighted industries were electronics, pharmaceutical biology, and non - banking finance. - In the CSI 1000 Index, the top three weighted industries were electronics, pharmaceutical biology, and computer [39][40][44]. 3.6 Other Overseas and Domestic Policy Tracking - Domestic policies: In 2025, the government work report and the Two Sessions in March proposed an economic growth target, a moderately loose monetary policy, and a more proactive fiscal policy. In May, the reserve requirement ratio and policy interest rates were cut, and a 500 - billion - yuan loan for service consumption and elderly care was established. In September, achievements in the financial industry during the "14th Five - Year Plan" were summarized, and reforms in the capital market were deepened. In October, the Fourth Plenary Session of the Central Committee set the goals and deployments for the "15th Five - Year Plan", emphasizing technology and expanding domestic demand [45][46]. - US policies: The US has entered a new interest - rate cut cycle, with a 25 - basis - point cut in October. As of November 22, the probability of another interest - rate cut by the Fed in December has decreased, but it is still expected to cut rates once within the year [47].

Market Overview - The market has experienced a significant decline, returning to a rating of 4.4 stars [1] - The CSI All Share Index has reverted to its early September levels [2] - All market caps have seen declines, with small-cap stocks experiencing the largest drop [3] - Value style stocks have declined less than growth style stocks, which have shown greater volatility [4] - The ChiNext Index has dropped over 4% [5] - Hong Kong stocks have also shown volatility, with technology stocks down 3% [6][7] Global Market Dynamics - The Nasdaq opened up 2% but closed down 2%, with intraday adjustments of 4-5% [10][11] - The Nasdaq had reached overvalued levels recently, marking the first instance of overvaluation this year, followed by an 8% correction [12][13] - Global market fluctuations have been influenced by the volatility in US stocks, with South Korean stocks down over 3% and Japanese stocks down over 2% [14][15] - A-shares have shown relatively smaller fluctuations compared to global markets [16] Asset Class Performance - Recently, both gold and bonds have also seen declines, with gold down 7.5% from its recent peak [17][18] - The recent downturn in the stock market has not led to a typical safe-haven performance from bonds or gold, indicating a simultaneous decline across asset classes, a rare occurrence [20][21] - This situation is often associated with liquidity crises, similar to events in 2013 and early 2020 [22][23] Federal Reserve Outlook - The company anticipates further interest rate cuts from the Federal Reserve, as the current dollar interest rates remain high [25] - The total scale of US national debt has reached $38 trillion, with annual interest expenses exceeding $1 trillion [26] - The pressure from interest payments necessitates a reduction in rates and refinancing [27] - There may be several months to half a year between rate cuts [29] - If the Fed does not cut rates in December, there may be concerns about liquidity in the following months [32][34] Market Liquidity and Volatility - The current liquidity tightness is unusual, as typically one asset class would rise while others fall [35] - In times of liquidity crises, investors tend to sell long-term risk assets for short-term liquidity, increasing correlations among asset classes [39][40] - Small-cap stocks, growth stocks, and cryptocurrencies are particularly sensitive to liquidity conditions [41] - The ChiNext Index saw a significant rise of over 50% in Q3, followed by a correction of over 15% in Q4 [43][44] - The company has adjusted its portfolio to reduce volatility by taking profits from overvalued growth stocks [45] Future Market Expectations - Investors should not be overly concerned about the current liquidity tightness, as it typically lasts a few weeks to a couple of months [47] - As liquidity conditions improve, different asset classes are expected to rise again [48] - The ongoing rate-cutting cycle by the Federal Reserve suggests potential buying opportunities during market dips [49]

Group 1 - The core strategy of the company focuses on consumer-related businesses, particularly those linked to the "mouth economy" [1] - These businesses have clear characteristics: products with a shelf life and do not require massive investments to sustain growth [1] - The market for food and consumer industries can quickly adjust supply and demand, making it easier to navigate compared to fixed asset investments like highways and real estate [1]

Group 1 - The core view is that the A-share market is expected to continue in a "slow bull" pattern in 2026, with several brokerages expressing optimism about market performance driven by key events such as the US-China trade agreement and the US midterm elections [1][2][3] - UBS forecasts that the MSCI China Index will reach a target of 100 by the end of 2026, indicating a 14% upside from current levels, supported by favorable factors including innovation and global competitiveness of Chinese companies [2][3] - The shift in market drivers from "valuation recovery" to "profit-driven" growth is anticipated, with expected earnings growth for the entire A-share market around 4.7% in 2026, highlighting the increasing importance of fundamentals [3][4] Group 2 - Key investment themes for the upcoming year include AI, with a focus on domestic chip production and applications in robotics and smart driving, as well as the globalization of Chinese companies transitioning to multinational operations [4][5] - The cyclical recovery in sectors such as oil, petrochemicals, and non-ferrous metals is expected to benefit from policies aimed at reducing competition and clearing excess capacity, with a forecasted narrowing of PPI declines [5] - Consumer sectors may see a rebound if extraordinary stimulus measures are introduced, with long-term focus areas including health, emotional consumption, and internationalization [5]

Group 1 - The core argument emphasizes that emerging industries like AI, biotechnology, and renewable energy will eventually face increased competition and capacity expansion, which is a natural market progression [3][10] - The company acknowledges the potential of new industries but stresses the importance of profitability and survival capability from an investment perspective, indicating a preference for traditional industries [3][13] - Traditional industries have experienced a downturn, but leading companies have maintained their positions due to scale, capital, and management advantages, which are reflected in their stock prices [4][16] Group 2 - The company believes that core indices like the CSI 300 and A50 are currently undervalued and can support the fundamentals of the Chinese economy, presenting a good investment opportunity [3][17] - The focus remains on consumer-related sectors, particularly those linked to the "mouth economy," which are characterized by quicker market corrections compared to fixed asset investments [3][19] - The company maintains that industries related to food and health will continue to have persistent demand, making them attractive for investment [3][22][44] Group 3 - The company expresses caution regarding the high uncertainty in new industries, which often require significant investment and have longer cycles to profitability [4][14] - The investment strategy prioritizes companies that can provide consistent profits and have a sustainable business model, rather than those that rely on speculative growth [4][51] - The company highlights the importance of understanding the long-term viability of investments, particularly in traditional sectors that have proven resilient over time [4][56]

1. Report Industry Investment Rating - No specific industry investment rating is provided in the report. 2. Core Viewpoints - **Stock Index**: The A - share market closed lower with volatility yesterday. The liquidity rally since June is over, and the market focuses on fundamentals. New - quality productivity themes led by AI have optimistic growth expectations, especially in the upstream hardware manufacturing of the technology sector, but they lack event catalysts and are in a volatile phase. Traditional economic sectors are in a volatile recovery, and it's hard to enter a fundamental bull market in the short term. The market volume, volatility, and risk appetite are decreasing, and the index is expected to be volatile in the short term. Overseas tech stocks also face expected divergence, and US tech stocks pulled back last week [1]. - **Treasury Bonds**: Treasury bond futures closed lower yesterday. The central bank conducted 310.5 billion yuan of 7 - day reverse repurchases, achieving a net injection of 115 billion yuan. The central bank's resumption of Treasury bond trading strengthens the expectation of reasonable and sufficient funds, which is beneficial to the bond market. The economic outlook for the fourth quarter is stable, the short - term necessity of central bank interest rate cuts is low, and the "stock - bond seesaw" effect disturbs bond market sentiment. The bond market is expected to continue the volatile pattern [1][2]. 3. Summary by Relevant Catalogs 3.1 Research Viewpoints - **Stock Index**: Yesterday, the A - share market was volatile and closed down. The Wind All - A index fell 0.3% with a trading volume of 1.74 trillion yuan. The CSI 1000 and CSI 500 indexes declined by 0.82% and 0.4% respectively, while the SSE 50 and CSI 300 indexes rose by 0.58% and 0.44% respectively. The new - quality productivity themes led by AI have good mid - term profitability expectations but lack short - term catalysts. Traditional economic sectors are in a volatile recovery, and the index is expected to be volatile in the short term. Overseas tech stocks also faced setbacks last week [1]. - **Treasury Bonds**: Yesterday, the 30 - year, 10 - year, 5 - year, and 2 - year Treasury bond futures main contracts fell by 0.40%, 0.06%, 0.03%, and 0.03% respectively. The central bank conducted 310.5 billion yuan of 7 - day reverse repurchases, with a winning bid rate of 1.4%. After the expiration of 195.5 billion yuan of reverse repurchases, a net injection of 115 billion yuan was achieved. The weighted average interest rates of DR001 and DR007 declined. The central bank's actions strengthen the expectation of sufficient funds, but the "stock - bond seesaw" effect disturbs sentiment. The bond market is expected to be volatile [1][2]. 3.2 Daily Price Changes - **Stock Index Futures**: The IH rose 0.45% from 2,997.6 to 3,011.0, the IF increased 0.22% from 4,555.0 to 4,565.2, the IC decreased 0.35% from 7,079.8 to 7,054.8, and the IM dropped 0.73% from 7,351.8 to 7,298.2 [3]. - **Stock Indexes**: The SSE 50 rose 0.58% from 3,003.0 to 3,020.3, the CSI 300 increased 0.44% from 4,568.2 to 4,588.3, the CSI 500 decreased 0.40% from 7,151.0 to 7,122.7, and the CSI 1000 dropped 0.82% from 7,448.1 to 7,387.2 [3]. - **Treasury Bond Futures**: The TS fell 0.03% from 102.49 to 102.46, the TF decreased 0.04% from 105.92 to 105.88, the T dropped 0.07% from 108.50 to 108.43, and the TL declined 0.38% from 116.53 to 116.09 [3]. 3.3 Market News - The Shanghai Stock Exchange revised and released the "Guidelines for the Application of Self - regulatory Rules for Funds of the Shanghai Stock Exchange No. 1 - Index Funds (Revised in November 2025)", which came into effect on November 19, 2025. For index funds with non - broad - based stock indexes as underlying indexes, several requirements need to be met, such as the number of constituent securities being no less than 30, the single - constituent security weight not exceeding 15% and the total weight of the top 5 constituent securities not exceeding 60%, etc. [4] 3.4 Chart Analysis 3.4.1 Stock Index Futures - The report provides charts of the trends of IH, IF, IM, IC main contracts, and their respective monthly basis trends [6][7][9]. 3.4.2 Treasury Bond Futures - Charts include the trends of Treasury bond futures main contracts, Treasury bond spot yields, and the basis and inter - period spreads of 2 - year, 5 - year, 10 - year, and 30 - year Treasury bond futures, as well as cross - variety spreads and capital interest rates [13][14][19]. 3.4.3 Exchange Rates - Charts show the central parity rates of the US dollar, euro against the RMB, forward exchange rates of the US dollar and euro against the RMB, the US dollar index, and exchange rates between the euro, pound, and yen against the US dollar [22][23][26]

Core Viewpoint - The article discusses the recent fluctuations in the stock market, particularly focusing on the impact of liquidity tightening and the potential for future market rallies, emphasizing the characteristics of bull markets in A-shares and Hong Kong stocks. Market Performance - The overall market saw a slight decline, with the CSI All Share Index down by 0.28%, currently rated at 4.2 stars [1] - Large-cap stocks like the CSI 300 experienced minor gains, while small-cap stocks faced declines [2] - The previously overvalued CSI 2000 index saw a drop of 1.4% [3] - Value stocks demonstrated resilience against market downturns [4] - Indices related to undervalued sectors, such as Hong Kong and Shenzhen dividend and free cash flow indices, showed an increase [5] - Growth sectors, particularly the STAR Market, experienced more significant declines, with a correction of over 10% from their peak [6] Liquidity Concerns - Recent market volatility is attributed to concerns over the uncertainty of the Federal Reserve's interest rate cuts in December, leading to short-term liquidity tightening [12] - This liquidity tightening has resulted in a simultaneous decline across various asset classes, including stocks, gold, and cryptocurrencies [13] - Historical precedents for such liquidity crises were noted, with global stock indices experiencing an average pullback of approximately 3.9% from their highs [17] - The A-share market's decline was relatively modest at about 3.2% from its peak, with dividend-related stocks reaching historical highs last week [20] Future Liquidity and Market Outlook - The company anticipates that the Federal Reserve will eventually enter a phase of interest rate cuts, given the high interest burden on U.S. debt, which exceeds $1 trillion annually [23] - The timing of these cuts may vary, potentially being delayed by several months [23] - The article asserts that there will be future phases of market increases, particularly in A-shares and Hong Kong stocks [24] Characteristics of Bull Markets - Bull markets in A-shares and Hong Kong stocks are characterized by rapid increases rather than gradual rises, with significant gains occurring in short bursts [25] - Since September 2024, A-shares have risen by 40-50%, with most gains concentrated in the last two weeks of September and select days in August and September 2025 [26][27] - The fastest recorded increase in A-shares over the past decade occurred in late September 2024 [28] - The article emphasizes that substantial market gains typically occur in only about 7% of trading days, which contribute to the majority of returns [31] Investment Strategy - Investors are advised to be patient and prepared for potential waiting periods between market rallies, as significant increases may be separated by months of sideways movement [34] - The article highlights that despite the overall positive performance of A-shares and Hong Kong stocks, a significant portion of retail investors may still be at a loss due to poor timing in buying and selling [43] - The article concludes with a reminder that good investment returns come from a combination of quality assets, favorable pricing, and long-term holding strategies [46]