Group 1 - The report suggests an overweight allocation in crude oil due to the rapid deterioration of geopolitical situations in the Middle East, which is expected to boost oil prices temporarily [1][20][18] - It recommends an overweight allocation in A-shares and H-shares, citing the expansion of fiscal deficits and supportive economic policies as key drivers for market risk appetite [18][21] - The report highlights the ongoing geopolitical tensions and their impact on global inflation expectations, leading to a preference for gold as a safe-haven asset [20][19][18] Group 2 - The report indicates that the U.S. economy is showing signs of marginal convergence but is not in a recession, with a moderate cooling in the labor market and wage growth, which may lead to a decrease in endogenous inflation [19][21] - It emphasizes the importance of structural monetary policies in enhancing the demand for government bonds, despite existing imbalances in financing needs and credit supply [19][21] - The report notes that the global order is rapidly restructuring, with the U.S. losing credibility due to its hegemonic policies, which further supports the case for gold as a hedge against uncertainty [20][19]

Asset Allocation Strategy - The tactical asset allocation view for A-shares is maintained at a standard allocation, supported by the stabilization of economic recovery and a decline in risk-free interest rates, which benefits A-share performance[6]. - The tactical allocation for government bonds is also maintained at a standard level, as the balance between financing demand and credit supply limits the upward potential of interest rates[6]. - The tactical allocation for gold has been downgraded to a standard level due to a rebound in market risk appetite and a decrease in geopolitical tensions, which suppresses gold's safe-haven attributes[7]. - The tactical allocation for the US dollar is maintained at a low level, as uncertainties surrounding US fiscal deficits and fluctuating policies may lead to a reduction in dollar holdings by international investors[18]. Market Performance Insights - The Shanghai Composite Index has shown a year-to-date increase of 16.24%, with a weekly performance of 2.16%[13]. - The Hang Seng Index has increased by 21.06% year-to-date, reflecting a weekly rise of 3.20%[13]. - The S&P 500 has a year-to-date increase of 4.96%, with a weekly performance of 3.44%[13]. - The yield on 10-year US Treasury bonds has shown a year-to-date increase of 2.10%, with a weekly decline of 0.31%[13]. Risk Factors - The analysis framework may have limitations, and the subjective nature of model design could lead to biases in the results[41]. - Historical and expected data may not accurately represent market expectations, which could affect the reliability of the conclusions drawn[41]. - Adjustments in market consensus expectations could lead to changes in the model's conclusions if unexpected events occur[41].