Core Viewpoint - The article discusses the current state of the bond market, highlighting its perceived decline in importance compared to the stock market, especially in light of recent economic data and market reactions [3][5][6]. Group 1: Market Overview - The bond market is experiencing a slight decline in yields, with the 10-year government bond yield fluctuating around 1.805% after opening at 1.81% [5][6]. - Recent inflation data for October was slightly above expectations, contributing to a cautious sentiment in the bond market [5][6]. - The stock market showed mixed reactions, initially declining but later recovering as news of a potential end to the government shutdown emerged [5][6]. Group 2: Monetary Policy and Liquidity - The central bank conducted a 7-day reverse repurchase operation of 119.9 billion yuan, with a net injection of 41.6 billion yuan after 78.3 billion yuan matured [3]. - The liquidity in the market is tightening, with the DR001 and DR007 rates hovering around 1.48% and 1.50%, respectively [3][4]. Group 3: Interest Rate Trends - The weighted average rates for various repo codes indicate a slight increase, with R001 at 1.52% and R007 at 1.50%, reflecting a mixed trend in the short-term funding market [4][9]. - The article notes a divergence in expectations for the 10-year government bond yield, with forecasts ranging from a lower bound of 1.2% to an upper bound of 2.1% [6].

Core Points - The U.S. Senate has reached an agreement to end the federal government shutdown, which has been a significant factor in recent liquidity issues in the market [1][2][4] - The agreement will provide funding for the government until January 30, 2024, and includes provisions to prevent future shutdowns [2][3] - The market reacted positively to the news, with major stock indices and cryptocurrencies experiencing significant gains [1][4][6] Market Reaction - Major U.S. stock indices, including the Dow Jones and S&P 500, saw increases of approximately 0.3% and 0.41% respectively [5] - European stock index futures also rose, with the DAX futures up by 1.3% [1][4] - In the cryptocurrency market, Bitcoin surged past $106,000 and Ethereum exceeded $3,600 [1][6] Economic Context - The government shutdown has lasted for 40 days, surpassing the previous record of 35 days, leading to a tightening of market liquidity [6][7] - The shutdown has delayed salary payments to federal employees, impacting consumer spending, which constitutes 80% of overall expenditure [7] - The Treasury General Account (TGA) balance has risen to $1 trillion due to ongoing financing without expenditure during the shutdown [7]

Group 1 - The ADP report indicates that U.S. private sector employment growth in October exceeded expectations, adding 42,000 jobs compared to the Dow Jones forecast of 22,000 jobs, suggesting the labor market is not at risk of recession [3][4] - Following the report, U.S. Treasury yields mostly rose, with the 10-year Treasury yield increasing by 1.9 basis points to 4.11% [3] - The U.S. government shutdown has entered its 36th day, surpassing the longest shutdown during Trump's first term, with an estimated economic loss of $11 billion if it continues for another week [3][4] Group 2 - European stock markets opened lower, reflecting a global decline, with concerns over overvaluation in tech stocks [4] - In the bond market, there was a mixed performance in European debt yields, with German yields mostly declining while Italian yields rose [4] - The Nikkei index in the Asia-Pacific region hit a new low since October 24, with significant declines in AI and semiconductor-related stocks, leading to profit-taking [4] Group 3 - The Japanese yen has depreciated significantly, with a nearly 5% drop against the U.S. dollar over the past month, as market participants test the Japanese government's tolerance for yen depreciation [5] - Japanese government bonds saw a decline in yields, with the 10-year yield falling by 2.5 basis points to 1.668% [5] - The U.S. Treasury is set to issue $2.05 billion in bonds, including a $690 million short-term bond [5] Group 4 - As of November 3, the total U.S. federal debt decreased by $36 billion from the previous month, totaling approximately $38 trillion [6]

Equity Market Review - The core viewpoint is that the trend remains bullish, awaiting a breakthrough, with A-shares experiencing significant fluctuations due to tariff impacts, similar to previous market behaviors in April [1] - The market has shifted to a wider trading channel, making high-selling and low-buying strategies more effective as each dip is followed by higher lows, indicating a strong upward trend [2] - Normal corrections are expected after significant gains, driven by profit-taking psychology and external factors like trade disputes, but the long-term confidence in China's economy remains strong [2][3] - The market's upward movement is supported by expectations rather than current realities, with investors more inclined to bet on rising prices rather than declines [3] - A solid economic recovery would further strengthen the upward trend, while ongoing policy support can prevent significant downturns, making corrections good opportunities for accumulation [3][4] Bond Market Review - The bond market outlook is less optimistic than equities but still positive, with a core conclusion of favorable support and a mid-term positive trend [5] - The fundamental backdrop is influenced by supply-demand mismatches, with PPI remaining negative for 36 consecutive months, but recent policy shifts indicate a change in attitude towards economic quality and pricing [6] - Recent government policies aim to maintain liquidity and promote lower financing costs, which is positive for the bond market, although interest rates are already at low levels [6] - Technical indicators show a significant oversold condition in the bond market, suggesting a potential rebound phase, with ten-year government bonds being a key investment choice due to their balance of yield and volatility [7]

Market Overview - The A-share market exhibited a structurally differentiated pattern last week (October 27 to October 31), with broad indices showing stability but significant variance in sector performance. The Shanghai Composite Index closed at 3954.79 points, up 0.11% for the week, while the Shenzhen Component Index and ChiNext Index rose by 0.67% and 0.50%, respectively. High-valued tech stocks faced notable corrections, with the STAR 50 Index dropping 3.19%, indicating increased risk aversion towards overvalued tech sectors. In contrast, mid and small-cap indices like the CSI 500 and CSI 1000 performed strongly, gaining 1.00% and 1.18%, respectively, while the Northern Stock Exchange 50 surged by 7.52%, reflecting a shift in funds from high-valued tech stocks to lower-valued growth stocks [2][4]. Sector Performance - The average weekly gain for Wind's primary sectors was 0.31%, with materials, industrials, and healthcare leading the performance. Conversely, financials, information technology, and real estate faced significant pressure. Following the release of Q3 reports, the market may return to focusing on earnings, with some high-valuation sectors under adjustment pressure [2][13]. Fund Issuance - A total of 53 funds were issued last week, including 23 equity funds, 15 mixed funds, 9 bond funds, 1 QDII fund, and 5 FOF funds, with a total issuance volume of 45.509 billion units [2][17]. Fund Performance - The Wind All Fund Index rose by 0.16% last week. The ordinary equity fund index increased by 0.30%, while the mixed fund index saw a slight rise of 0.06%. The bond fund index also gained 0.25% [2][8]. Global Market Insights - In the global asset class review, Japanese and Korean stock markets saw significant gains, with the Nikkei 225 soaring by 6.31% and the Korean Composite Index rising by 4.21%. In contrast, the Hang Seng Index fell by 0.97%, and European markets faced pressure, with the French CAC40 and German DAX declining by 1.27% and 1.16%, respectively. Commodity markets showed mixed results, with iron ore and coking coal prices rising by 3.69% and 2.76%, while crude oil and industrial metals generally declined [4][5].

Core Viewpoint - The article emphasizes the importance of asset allocation over attempting to achieve quick wealth through market timing, advocating for a disciplined investment approach that focuses on high-probability strategies rather than low-probability ones [4][6]. Group 1: Asset Allocation Strategy - The author implemented a three-part asset allocation strategy (6:3:1 for stocks, bonds, and commodities) starting with an initial investment of 50,000 yuan and a weekly investment of 1,000 yuan, achieving a cumulative return of over 16% and an annualized return exceeding 22% with a maximum drawdown of approximately 8% [4][15]. - The article argues that there is no bad time to start asset allocation, as it can yield positive results regardless of market conditions, highlighting that even during periods of high uncertainty, good returns can be achieved [6][15]. Group 2: Market Conditions and Timing - The author notes that at the time of investment, there was significant uncertainty in both domestic and international markets, with high levels of caution among investors due to macroeconomic factors and asset valuations [6][9][10]. - Despite the challenging environment, the author emphasizes that asset allocation does not require precise market timing, as there are always undervalued assets available for investment [14][15]. Group 3: Dollar-Cost Averaging - The article discusses the benefits of dollar-cost averaging, stating that consistent investments can accumulate more shares during market downturns, allowing for better positioning when the market rebounds [19]. - The author experienced significant market volatility over the past year, but through disciplined investing, was able to capture gains without needing to predict market movements [16][18]. Group 4: Adding to Positions - The author identifies specific instances where adding to positions during market downturns proved beneficial, citing three occasions where additional investments were made during significant market declines [20][23]. - The strategy of adding to positions during dips is framed as a way to smooth out costs and enhance overall returns [24][25].

Economic Data Summary - China's GDP grew by 5.2% year-on-year in the first three quarters, with quarterly growth rates of 5.4%, 5.2%, and 4.8% respectively [1] - In September, industrial output increased by 6.5% year-on-year, while retail sales rose by 3% [1] - Fixed asset investment decreased by 0.5% year-on-year, but grew by 3% when excluding real estate development [1] - The average disposable income per capita for residents was 32,509 yuan, reflecting a real growth of 5.2% after adjusting for price factors [1] U.S. Economic Indicators - The U.S. CPI rose by 3% year-on-year in September, the highest since January, but below market expectations of 3.1% [1] - Core CPI showed a month-on-month increase of 0.2%, also lower than anticipated [1] - Service sector inflation reached its weakest level since November 2021 [1] - The market has largely priced in two 25 basis point rate cuts by the Federal Reserve for the remainder of the year [1] Market Performance - The S&P Global reported that the U.S. manufacturing PMI for October was 52.2, and the services PMI was 55.2, both showing improvement from September [1] - The composite PMI for October was 54.8, indicating a recovery in economic activity [1] - New orders composite index reached its highest level of the year, with manufacturing orders showing the strongest growth since February of the previous year [1] APEC Meeting and U.S.-China Relations - Chinese President Xi Jinping will attend the APEC informal leaders' meeting in South Korea from October 30 to November 1 [2] - There is ongoing communication regarding a potential meeting between the Chinese and U.S. presidents during the APEC conference [2] - Recent U.S.-China trade talks focused on key issues such as maritime logistics, tariffs, and agricultural trade, resulting in a basic consensus on addressing mutual concerns [3] Stock Market Overview - The A-share market showed a rebound, with the ChiNext Index rising by 8.05%, the largest increase among major indices [7] - The overall market sentiment improved due to expectations of easing trade tensions between the U.S. and China [7] - The S&P 500 index increased by 1.92%, while the Nasdaq index rose by 2.31%, reflecting a positive response to weaker inflation data [8] Bond Market Insights - The bond market experienced fluctuations, with credit bonds generally declining and government bonds showing slight increases [10][12] - The U.S. Treasury yields saw minor movements, influenced by mixed economic signals and trade tensions [12] - The domestic bond market is expected to remain volatile due to ongoing economic uncertainties and policy adjustments [10]

1. Report Industry Investment Rating - The report does not provide a specific industry investment rating [1][2][3][4][6][7][9] 2. Core Viewpoints of the Report - Short - term asset allocation should be balanced. After the Fed's interest rate cut decision in the October meeting, the progress of China - US tariff talks, and the release of details from the 20th Fourth Plenary Session, it is expected to benefit overseas and domestic equity sectors (especially the science and technology innovation sector) and non - ferrous metals. Black commodities may also have a rebound opportunity due to domestic policy improvement, while precious metals may continue to adjust in the short term [6] 3. Summary According to Relevant Catalogs 3.1 Macro Highlights - **Overseas Macro**: The US government shutdown continued this week. China - US tariff expectations eased, and the CPI in September was lower than expected, strengthening the expectation of monetary easing. Reasons include the lower - than - expected September CPI, the 12th rejection of the temporary budget bill by the Senate, the increased economic downward pressure after the government shutdown, and the easing of China - US tariff expectations [6] - **Domestic Macro**: On October 28, the "Proposal of the Central Committee of the Communist Party of China for Formulating the 15th Five - Year Plan for National Economic and Social Development" and its explanatory notes were released, emphasizing the strategic position of science and technology and emerging industries, and also covering areas such as boosting consumption, expanding effective investment, and "anti - involution" [6] - **Asset Views**: Short - term balanced allocation is recommended. After the Fed's interest rate cut decision, China - US tariff talks, and the release of details from the plenary session, equity sectors and non - ferrous metals may benefit, black commodities may rebound, and precious metals may continue to adjust [6] 3.2 Market Performance of Various Assets - **Financial Market**: Stock index futures showed a shrinking - volume rebound, with the growth style being active due to technology events. Stock index options had a slightly lower trading volume. Treasury bond futures remained weak [2][7] - **Precious Metals**: Gold and silver entered a short - term adjustment phase due to the easing of geopolitical and economic and trade tensions [7] - **Shipping**: The freight rate of the European container shipping line was under pressure as the peak season in the third quarter ended [7] - **Black Building Materials**: The steel industry faced policy disturbances and inventory pressure. Iron ore was mainly affected by sentiment. Coke's price increase was about to be implemented, and coking coal prices were strong. Other related products also had their own market characteristics [7] - **Non - ferrous Metals and New Materials**: Copper prices fell in the short term due to trade frictions. Aluminum prices rose, while zinc prices were weak. Other non - ferrous metals also showed different trends [7] - **Energy and Chemicals**: The energy and chemical industry still faced a weak supply - demand situation. Most products were expected to fluctuate, with some showing a downward trend [9] - **Agriculture**: The agricultural market showed a mixed trend. Some products were affected by factors such as weather, trade relations, and supply - demand [9]

Market Overview - Global risk assets experienced a pause in their upward momentum, with major stock indices in the Asia-Pacific region collectively declining, followed by a lower opening for European indices [1][2][3] - The decline in stock markets is attributed to short-term profit-taking after significant gains that led to historical highs on October 27 [1][3] Precious Metals Market - Gold and silver prices saw a substantial drop, with spot gold falling over 2% and briefly dipping below $3900 per ounce, while silver dropped nearly 2% [1][3] - Analysts from Heraeus indicated that the adjustment in precious metal prices could last for several months, although they expect a potential continuation of the upward trend if investor interest remains strong [4][5] Investment Demand for Gold - Despite recent price declines, global retail demand for gold remains robust, and the growth rate of gold holdings in ETFs has not shown significant decline, indicating sustained investor interest [5][6] - Analysts predict that the average gold price could rise to around $4560 per ounce next year, reflecting a 33% increase from the average price since the beginning of the year [6] Future Price Projections - Metals Focus analysts believe that ongoing economic uncertainty will continue to support gold prices, with trade policy and its global economic impact being key drivers [5][6] - Morgan Stanley's commodity strategy head anticipates that gold prices could exceed $5000 per ounce by the fourth quarter of 2026, driven by sustained demand from investors and central banks [6]

Core Viewpoint - The capital market experienced a rare phenomenon where both the stock market and bond market rose simultaneously, with the Shanghai Composite Index approaching the 4000-point mark while the 10-year government bond yield fell to 1.833% [1][35] Market Performance - The A-share indices all opened higher, with the ChiNext Index rising over 2% at one point [1] - The Shanghai Composite Index reached a high of 3998 points, just shy of the 4000-point threshold [9][35] - The trading volume in the stock market increased, with a total turnover exceeding 800 billion yuan, up 10% from the previous day [19] Bond Market Dynamics - The central bank conducted a 900 billion yuan MLF operation, resulting in a net injection of 200 billion yuan, marking the third consecutive week of large-scale liquidity provision [3] - The 10-year government bond yield fell by 1 basis point, while the futures market showed strong performance with the main contract rising by 0.08% [35] - The bond market displayed a mixed performance, with high-grade credit spreads narrowing while low-grade credit spreads remained elevated, indicating a cautious risk appetite [11][22] Investor Behavior - Insurance funds increased their allocation to government bonds, with one large insurance asset management company purchasing 10-year government bonds around 2.85% [7] - There was a notable divergence in institutional behavior, with broker proprietary accounts being net buyers while bank wealth management accounts were net sellers [5][20] - Foreign capital continued to flow into the A-share market, with net inflows exceeding 5 billion yuan for the fifth consecutive trading day, totaling over 20 billion yuan [13] Credit Market Insights - The primary market for credit bonds remained active, with three credit bonds issued today totaling 5 billion yuan, and one AAA-rated central enterprise bond issued at a rate 10 basis points lower than the secondary market [15] - The credit bond market showed significant differentiation, with high-grade credit bonds seeing increased demand while low-grade bonds faced selling pressure [31][26] Economic Outlook - Market analysts suggest that the current bond yield levels reflect many favorable factors, and further declines in yields may require new catalysts [13] - The upcoming economic data, including a potential rise in the manufacturing PMI to 49.5, may exert some pressure on the bond market, although current market performance appears to have absorbed this factor [29]