Core Viewpoint - Morgan Stanley believes that while short-term risks related to the Federal Reserve's monetary policy may persist, the significant adjustment in the U.S. stock market is nearing its end, providing a good opportunity for investors to position themselves for 2026. Analysts maintain a bullish stance for the next 12 months, particularly recommending sectors such as consumer goods, healthcare, finance, industrials, and small-cap stocks [1][5][26]. Market Adjustment Insights - Despite a modest 5% pullback in the S&P 500 index, two-thirds of the top 1000 companies have experienced declines exceeding 10%, indicating a substantial internal market adjustment [2][6]. - The adjustment is attributed to two main factors: high momentum stocks are more sensitive to liquidity tightening, and high-quality indices like the S&P 500 and Nasdaq 100 reacted strongly to hawkish signals from the Federal Reserve [6][8]. Liquidity and Market Conditions - The report highlights that the recent volatility in the U.S. stock market, driven by the Federal Reserve's monetary policy and liquidity constraints, presents a buying opportunity for bullish investors [4][7]. - Morgan Stanley anticipates that liquidity conditions will improve as the U.S. government shutdown ends, leading to a significant decrease in the Treasury General Account (TGA) balance, which is expected to enhance liquidity in the short term [16][17]. 2026 Outlook - The firm expresses a contrarian view for 2026, suggesting that the market is in an "early cycle" phase, contrary to the prevailing consensus of being in a "late cycle" [18][19]. - Morgan Stanley projects a 17% earnings growth for Nasdaq-related companies in 2026, surpassing the consensus estimate of 14% [19]. - The firm has upgraded small-cap stocks and non-essential consumer goods to an overweight rating, citing factors such as pent-up demand and a shift in consumer spending from services to goods [20][21]. Earnings and Market Sentiment - Despite the recent market downturn, the underlying fundamentals of companies remain strong, indicating that the current adjustment is driven by policy and liquidity rather than a collapse in fundamentals [22][26]. - The breadth of earnings revisions for the Nasdaq 100 index has increased, with future net profit expectations for major indices continuing to rise, particularly for small-cap stocks [23][24].

尽管市场近期出现回调，尤其是高动量和高贝塔成长股受到冲击，但摩根士丹利首席美国股票策略师兼 首席投资官迈克尔.威尔逊认为，当前的疲软可能预示着中期前景向好。 他在一份报告中指出："我们认为市场内部的疲软是一个信号，表明我们更接近此轮调整的尾声而非开 端"，并建议投资者将此次预期重置视为布局潜在复苏的机会。 这位策略师还指出，截至10月的替代劳动力市场数据显示出进一步疲软的迹象，ADP报告、Challenger 裁员数据和持续申领失业金人数等指标均指向就业市场走弱。 他补充道："我们认为股市早在4月份就已计入了劳动力数据的变化率触底"，这意味着官方就业数据的 适度疲软实际上可能对股市有利，因为这或促使美联储更积极地降息。 威尔逊解释说，10月就业报告被取消以及11月数据延迟(需至12月16日才公布)，给美联储12月10日的会 议决策带来了不确定性。他称此时机问题构成了"许久未见的格外不确定的美联储会议前景"，随着投资 者权衡9月数据中显示非农就业人数超预期与失业率上升的矛盾信号，可能导致近期市场持续波动。 流动性条件收紧已成为市场逆风，而政府停摆期间财政部一般账户(TGA)增加且拨款受限更是雪上加 霜。但威尔逊 ...

Core Viewpoint - The market is experiencing a style shift with small-cap and cyclical stocks gaining momentum, driven by technical breakthroughs, improved market risk appetite, and capital withdrawal from popular AI trades [1][5]. Group 1: Small-Cap Stocks - Since July, small-cap stocks have outperformed larger indices, with the Russell 2000 index rising approximately 3.5%, surpassing the S&P 500 (+1.7%) and Dow Jones Industrial Average (+0.9%) [1]. - The Russell 2000 index is approaching a "golden cross," a technical indicator suggesting a new upward trend, marking its first occurrence since January 2, 2024 [1]. - Historical data indicates that a golden cross typically signals a bullish trend for small-cap stocks over the next 3 months, 6 months, and up to 1 year [3][4]. Group 2: Market Sentiment and Economic Factors - Despite positive technical signals, the fundamental outlook for small-cap stocks remains fragile, leading to skepticism about the sustainability of the current rally [5]. - Analysts suggest that large-cap stocks are better positioned to withstand economic pressures such as inflation and tariffs, which may limit the potential for small-cap stock gains [6]. - Year-to-date, the Russell 2000 has only gained less than 1%, significantly lagging behind the S&P 500's 7.3% and Nasdaq's 8.2% [6]. Group 3: Cyclical Stocks - Alongside small-cap stocks, cyclical stocks are also seeing increased investment as funds shift from overvalued large-cap tech stocks to economically sensitive sectors like materials, industrials, and consumer discretionary [7]. - The materials sector has risen 3.9%, consumer discretionary by 3.7%, and industrials by 2.3% since July, all outperforming the broader market [8]. - The performance of cyclical stocks is attributed to resilient consumer and business sentiment, with demand remaining stable in many areas [8].

Core Viewpoint - The banking sector and small-cap stocks are experiencing a resurgence, with specific ETFs showing significant year-to-date gains and attracting substantial net inflows, indicating a favorable investment environment [1][2][3]. Group 1: ETF Performance - The Bank AH Preferred ETF (517900) and the CSI 2000 Enhanced ETF (159552) have increased by 22.02% and 20.11% year-to-date, respectively, with recent net inflows of nearly 200 million over the past 10 days [1][2]. - The Bank AH Preferred ETF has a year-to-date decline of 21.94% and a 10-day increase of 0.63%, while the CSI 2000 Enhanced ETF has a year-to-date decline of 20.11% and a 10-day increase of 0.32% [2]. Group 2: Market Strategy - The Huachuang Strategy Team suggests that the current financial re-inflation phase in the bull market's first half allows for the release of small-cap growth potential, with a focus on dividend assets due to their stable cash flow and dividend capabilities [2]. - The latest report from Chuang Securities recommends a "barbell strategy" for asset allocation, combining high-dividend bank stocks with high-growth small-cap stocks, suitable for the current market's volatility and rapid style rotation [2][3]. Group 3: Investment Opportunities - The Bank AH Preferred ETF offers defensive characteristics through its undervaluation and high dividend yield, achieving a year-to-date increase of 20%, while the CSI 2000 Enhanced ETF captures small-cap growth opportunities through quantitative strategies, with cumulative returns exceeding 60% since inception [3]. - This investment strategy allows investors to benefit from the recovery of bank stocks driven by policy incentives while also participating in the growth potential of small-cap stocks, making it appropriate for the current uncertain market conditions [3].

Core Viewpoint - The article discusses the cyclical nature of various industries, particularly focusing on consumer, technology, and pharmaceutical sectors, highlighting their performance during different economic phases and the potential for recovery in the future [8][10][19]. Group 1: Market Performance - The overall market showed a slight decline at the opening but the drop narrowed by the close, with the CSI All Share Index experiencing a minor decrease [1]. - The CSI 300 Index saw a slight increase, while small-cap stocks faced more significant declines [2]. - Consumer stocks are on the rise, indicating a potential recovery in the sector [4]. Group 2: Sector Analysis - The technology sector in Hong Kong has recently experienced a downturn after weeks of gains, approaching a state of undervaluation [5][6][7]. - The pharmaceutical sector faced a decline in earnings from 2022 to the first half of 2024, but signs of recovery were noted in early 2024, with significant gains in the first quarter [11]. - The consumer sector has historically faced downturns during economic crises, such as the 2008 financial crisis and the 2012-2013 economic slowdown, but has also seen rapid recoveries following stimulus measures [13][16]. Group 3: Economic Cycles - The cyclical nature of industries means that periods of low earnings growth and low valuations are often followed by recovery phases where both earnings and valuations improve [26][28]. - The current consumer sector is compared to the pharmaceutical sector two years ago, indicating it is still in a low phase before a potential recovery [19][28]. - The article emphasizes that all sectors, including finance and energy, experience similar cyclical patterns, suggesting that investment opportunities arise during low periods [20][25].