Core Viewpoint - Federal Reserve Chairman Powell indicated a potential end to the balance sheet reduction process in the coming months to prevent liquidity tightening in short-term funding markets [1][3]. Group 1: Federal Reserve Actions - The Federal Reserve expanded its balance sheet during the pandemic and began raising interest rates in March 2022, followed by balance sheet reduction starting in June 2022 [2]. - The first interest rate cut is expected in September 2024, while the balance sheet reduction has continued until now [2]. Group 2: Market Reactions - The expectation of interest rate cuts and the cessation of balance sheet reduction are likely to lead to increased liquidity, which historically correlates with better market performance in A-shares and Hong Kong stocks [5]. - Following Powell's remarks, the Hang Seng Index rose by 1.84%, and the Hang Seng Tech Index increased by 2.57%, indicating signs of stabilization [5]. - Despite the positive market reaction, there has been a net outflow of 5.4 billion from southbound funds, suggesting that foreign capital is not necessarily buying into the perceived benefits of rate cuts [5]. Group 3: A-share Market Dynamics - The A-share market showed weakness in early trading, primarily due to the previous day's decline [6]. - However, the surge in shares of Sanhua Intelligent Control led to a recovery in the broader technology sector, improving market sentiment [7]. Group 4: Investment Strategies - The current market environment is characterized by volatility, with frequent changes in trend signals, particularly in sectors like AI and chips [12]. - Investors are advised to be patient and wait for clear signals, as the market's oscillating nature can lead to increased trading frequency and potential losses [12].

Group 1 - The "Chuang Series" index experienced a significant surge, with the ChiNext Index rising by 3.63%, reaching a new high since February 2023 [2] - Among the top ten weighted stocks in the ChiNext Index, all except Wens Foodstuff Group saw gains, with Tonghuashun up 15.74% and Zhongji Xuchuang up 10.65% [2] - Ningde Times, the largest weighted stock in the ChiNext Index, reported a revenue of 178.886 billion yuan, a year-on-year increase of 7.27%, and a net profit of 30.485 billion yuan, up 33.33% [2] Group 2 - Multiple broad-based indices also reached new highs for 2023, including the ChiNext 50, which rose by 4%, and the ChiNext Composite Index, which increased by 3% [2] - The strategy indices showed strong performance, with the Chuang Growth Index up 4.18% and the Chuang Value Index up 2.02% [3] - The leading ETF products in the "Chuang Series" also performed well, with the ChiNext Artificial Intelligence ETF rising by 6.36% [3]

- The report suggests maintaining a certain level of "anti-fragile" assets to hedge against potential strengthening of the dollar, while also taking advantage of the liquidity premium in mid-cap stock indices such as the Hang Seng MidCap LOF, STAR 200 ETF, ChiNext 200 ETF, CSI 1000, and 2000 Enhanced ETFs[1][6][9] - The ETF combination strategy - equity-biased - XinXuan technical quantification has achieved an absolute return of 42.75% from the beginning of 2024 to the present, with an excess return of 18.65% relative to the CSI 300 and 13.08% relative to the ETF equal weight[10][60] - The ETF combination strategy - debt-biased - Quantitative All-Weather has a single-week increase of 0.28%, cumulative return of 8.91%, and a maximum drawdown of 3.26%[10][60] - The report highlights the importance of maintaining a high position in Japanese stocks following the removal of trade barriers due to the Japan-US tariff agreement, and the relative peace in the Russia-Ukraine conflict, which benefits Japan as an oil-importing country[3][42] - The report also mentions the potential for a rapid adjustment in the US market, suggesting an increase in allocation if such an adjustment occurs, given the relatively strong economic data in the US compared to other major regions[2][41] - The report indicates that the Hong Kong stock market sentiment has improved, with significant net buying from southbound funds, and highlights the independent capital logic of Hong Kong stocks, favoring non-bank financials, automobiles, and innovative drugs[6][48][49] - The report suggests that the liquidity-driven market favors sectors such as non-ferrous metals, engineering machinery, non-bank financials, agriculture, forestry, animal husbandry, and fishery[7][57] - The report notes that the gold market is expected to continue benefiting from the ongoing rate cut expectations before the September FOMC meeting, with the Chinese central bank continuing to increase its gold reserves, reinforcing the long-term value of gold as a hedge against uncertainty[7][58][59]