Market Overview - Investment demand is expected to be boosted by further policy support, with a focus on the defensive value of consumption and dividend sectors[1] - In May, retail sales growth was strong, particularly in dining and retail goods, driven by "two new" policies, with notable performance in home appliances and communication equipment[2] - Fixed asset investment growth weakened marginally due to real estate investment drag, while government bonds remained a key support for new social financing in May[2] Market Sentiment - The A-share market is likely to continue a consolidation pattern in the short term, with risk premium levels nearing the 10-year average plus one standard deviation, indicating market sentiment is close to a short-term peak[2] - Short-term market dynamics are expected to remain volatile with rapid sector rotation, requiring patience for policy acceleration and sustained macroeconomic support[2] Investment Style - The market is anticipated to be dominated by low valuation factors in the short term, with small-cap, high-profit, and high-valuation stocks expected to outperform[2] - Credit growth and fundamental recovery in May were relatively weak, suggesting a continued preference for low-risk investments until policy release points arrive[2] Sector Focus - Attention should be given to essential consumption and dividend sectors during the risk disturbance window, with the top 10 industries for AI sector allocation including light industry manufacturing, public utilities, and pharmaceuticals[2] - The industry distribution primarily aligns with essential consumption and dividend styles, indicating a defensive investment strategy[2] Risk Factors - Risks include weaker-than-expected policy implementation and potential global recession risks exceeding expectations[2]