Core Viewpoint - The market is experiencing increased volatility and differentiation, with a cautious short-term outlook but positive long-term fundamentals for the stock market [1] Domestic Macroeconomics - The macroeconomic environment is under pressure, with ongoing profitability recovery and continued liquidity easing [2] - Industrial profits saw a significant year-on-year increase of 20.4% in August, the highest growth rate since December 2023, driven by low base effects and policy changes [2] - Micro liquidity remains ample, supporting the market, while macro liquidity continues to be loose, with no immediate expectations for interest rate cuts unless external conditions change [2] Market Outlook - The current market rally is supported by long-term narratives, but the sources of incremental capital appear insufficient [3] - Key upcoming events include the Fourth Plenary Session and the China-US summit, which may boost market sentiment and create investment opportunities [3] Equity Investment - The stock market's underlying fundamentals are improving in the long term, but the short-term outlook is cautious due to declining valuation attractiveness [4] - Focus on low-value and cyclical sectors such as real estate, new energy, and high ROE large-cap companies, while being cautious of risks in strong sectors [4] - Key sectors to watch include technology, robotics, and innovative pharmaceuticals, with a focus on structural opportunities [4] Fixed Income Investment - The bond market is not expected to enter a sustained bear market, with credit bonds still offering spread value [5][6] - The 10-year government bond yield rose from 1.65% to 1.86%, with a potential for further fluctuations due to market conditions [5] - Credit bonds are expected to follow market trends without independent bullish movements, but there may be some recovery potential after short-term adjustments [6] Global Asset Allocation - Uncertainty surrounding Trump's policies remains high, leading to a preference for global diversification [7] - Short-term opportunities are seen in US stocks and bonds, but macroeconomic volatility may increase [7] - Continued focus on structural opportunities in the US AI sector and real estate recovery during the interest rate cut cycle [7] Hong Kong and Other Markets - The Hong Kong market is viewed positively due to liquidity catalysts and structural opportunities, though domestic and overseas influences must be monitored [8] - There is optimism for Japan's market to emerge from deflation and enter a phase of sticky service inflation [8] - Gold is favored as a hedge against fiscal and equity market risks, with strong potential for growth [8]