Soochow Securities Co., Ltd. July Major Asset Allocation Outlook: Follow the Trend and Prepare for Change

According to Zhitong Finance APP, Soochow Securities released the July asset allocation outlook, expecting the A-share market to show a pattern of volatile adjustment in July. In the short term, due to momentum effects, there may be a continued rise, but it may enter an adjustment phase later; the overall rhythm of the Hong Kong stock market will remain consistent with the A-share market, but the chip structure of A-shares is better than that of Hong Kong stocks. Additionally, the Hang Seng AH Premium Index has reversed from a low position, reducing the attractiveness of Hong Kong stocks, and A-shares are likely to outperform Hong Kong stocks, showing a wide range of fluctuations.

Style and sector performance: In early July, the growth style is relatively dominant, while the dividend sector may experience relative fluctuations. In mid to late July, as momentum effects fade and uncertainties regarding tariff policies increase, the growth style may enter a relatively adverse period, while the dividend style is expected to further highlight its advantages. However, attention should be paid to the early impact of domestic and international event-driven factors on style changes.

Influence of internal and external factors: Domestically, more favorable policies are still awaited in the short term; overseas, the tariff suspension period expires on July 9, and the probability of a Federal Reserve rate cut in July is low. Close attention should be paid to new event catalysts such as international trade court rulings.

U.S. Stocks and Gold - Hedging effects may still unfold:

U.S. stock market: The risk trend model shows that the risk level of U.S. stocks has reached a high point, and a volatile trend is expected in July. The expiration of the reciprocal tariff suspension period on July 9 will continue to have a short-term impact on the market based on subsequent negotiation results and policy changes.

Gold market: The risk level is at a medium level, with no obvious overvaluation or undervaluation in the short term. Market expectations for interest rate cuts are continuously rising, and it is expected that the fluctuation range will narrow and gradually strengthen.

Comprehensive trend: U.S. stocks and gold are expected to maintain an inverse volatile pattern, waiting for events such as geopolitical developments, policy changes, and the release of U.S. economic data to catalyze.

Government Bonds and U.S. Bonds - Steady progress with a strong volatility bias:

Comprehensive trend: Both are supported by easing expectations and risk aversion sentiment, but domestic recovery + policy flexibility and U.S. inflation stickiness + debt supply create differentiation, leading to an overall downward fluctuation in interest rates.

Government bond market: Slow economic recovery supports confidence in maintaining policy easing. After the quarter, expectations for liquidity improvement are relatively clear, coupled with foreign capital inflows supporting allocation demand, providing a basis for interest rate declines.

U.S. bond market: External uncertainties elevate risk aversion sentiment, supporting interest rate declines, but the downward fluctuation is limited due to supply pressure and policy swings.

Fund Allocation Recommendations - Relatively balanced allocation:

It is expected that the market may present a volatile adjustment trend in the future, and a balanced allocation is recommended while waiting for opportunities.

Risk warning: Occurrence of significant macro events outside expectations; macro data falling short of expectations; risk of model failure when market conditions change