CITIC Construction Investment: Short-term focus on policy + performance, pay attention to the direction of "new quality domestic demand growth"

According to the Zhitong Finance APP, CITIC Construction Investment Securities has released a research report stating that the two major overseas macro trading logics of tariffs and the Federal Reserve's interest rate cuts have improved. The Politburo meeting focused on stability, and the market policy game phase has landed. The central bank is nurturing the liquidity environment, and the micro liquidity in the market still plays a supporting role. The market is in a 震荡 phase in the medium term, but short-term market risk appetite is rising, driving a temporary shift in market style towards growth. In the short term, it is advisable to grasp policy catalysts and the certainty of first-quarter performance, with a focus on industries such as banking, electricity, beauty, and automobiles. In the medium term, it is recommended to focus on the "new quality domestic demand growth" direction characterized by geopolitical isolation, domestic demand-driven growth, and growth elasticity, with new consumption and AI expected to continue strengthening through the game and 震荡。

CITIC Construction Investment's main viewpoints are as follows:

The two major macro trading logics of overseas tariffs and interest rate cuts have improved. The China-U.S. tariff game shows marginal signs of easing, but the likelihood of reaching an agreement in the short term is low, and market uncertainty remains high. Expectations for the Federal Reserve to cut interest rates have loosened, with a policy shift relying on data and risk balance. Cleveland Fed President Mester stated that if the data is clear enough, rate cuts could start as early as June.

The April Politburo meeting's policy focuses on stability, and the central bank nurtures the liquidity environment. The April Politburo meeting continues the overall tone of seeking progress while maintaining stability, clearly defining the impact of tariffs as "international economic and trade struggles" for the first time. The meeting emphasizes service consumption as a core tool for expanding domestic demand, while structural monetary policy is strengthened, and fiscal policy is accelerated. Real estate policies remain prudently restrained, continuously consolidating the stability of the real estate market. The emphasis on "stabilizing employment" has noticeably increased, focusing on enterprises significantly affected by tariffs. Overall, the policy strength of the April Politburo meeting aligns with our previous expectations. As we emphasized in earlier reports, investors should continue to pay attention to subsequent policies, with the July Politburo meeting likely being a more critical point.

The A-share market's dividend style continues to dominate, but may temporarily shift towards growth. The market is in a 震荡 pattern in the medium term, but short-term risk appetite shows marginal improvement, driving a temporary shift in market style towards growth. This mainly stems from two aspects: first, the stabilization fund has not shown significant reduction behavior, steadily raising the market center, which is conducive to high-risk preference funds entering the market; second, there are signs of easing in the U.S. tariff policy towards China, leading to a rebound in global risk asset preference. Potential concerns remain, as the realization of policy expectations after the Politburo meeting may lead to a correction in consumption sectors with high implied expectations; the impact of external demand shocks on the fundamentals will gradually become apparent in the future.

In the short term, focus on policy + performance, and pay attention to the "new quality domestic demand growth" direction. In the short term, it is advisable to grasp policy catalysts and the certainty of first-quarter performance, with a focus on industries such as banking, electricity, beauty, and automobiles. In the medium term, it is recommended to focus on the "new quality domestic demand growth" direction characterized by geopolitical isolation, domestic demand-driven growth, and growth elasticity, with new consumption and AI applications expected to continue strengthening through the 震荡 game period