Cathay Securities and Haitong Securities: The expectation of the Federal Reserve's interest rate cuts continues to strengthen, recommending a tactical overweight in A-shares
CITIC Securities released a research report, maintaining a tactical asset allocation view, recommending an overweight in A-shares, a benchmark allocation in U.S. Treasuries and gold, and an underweight in the U.S. dollar. It believes that the cooling of the U.S. labor market has strengthened expectations for monetary policy easing, and A-shares are optimistic due to factors such as upward revisions in economic expectations, national support, and stable liquidity. The risk-return ratio of U.S. Treasuries is moderate, while gold is influenced by geopolitical factors and monetary policy expectations. Overall, Chinese equity assets have a high risk-return ratio and allocation value
According to the Zhitong Finance APP, Guotai Junan has released a research report stating that it maintains its previous tactical asset allocation view. Among equity assets, there is a high optimism for A-shares due to continuous upward revisions of economic prosperity expectations, strong national support for capital market development, stable market liquidity, gradually improving risk appetite, and solid optimization of micro trading structures. It is recommended to tactically overweight A-shares, tactically benchmark U.S. Treasuries and gold, and tactically underweight the U.S. dollar.
Guotai Junan's main points are as follows:
The cooling of the U.S. labor market strengthens expectations for "preventive" monetary policy easing.
Among equity assets, there is high optimism for A-shares due to continuous upward revisions of economic prosperity expectations, strong national support for capital market development, stable market liquidity, gradually improving risk appetite, and solid optimization of micro trading structures. Among bond assets, U.S. Treasuries are relatively neutral, supported by expectations of looser monetary policy and marginal convergence of domestic prosperity. In commodities, the bank believes that gold prices may marginally benefit from the warming geopolitical situation and adjustments in Federal Reserve monetary policy expectations. In global foreign exchange, the bank believes that the Federal Reserve's monetary policy guidance and expectations for looser monetary policy may marginally weaken the performance of the U.S. dollar compared to other currencies.
Multiple factors are expected to support the continued performance of Chinese assets, maintaining a tactical overweight view on A-shares.
China's transformation is accelerating, and economic visibility is improving; risk-free returns are declining, reducing the opportunity cost of the stock market; capital market reforms are changing social perceptions, all of which build the momentum for a "transformation bull" market in Chinese stocks. These factors are expected to continue supporting the performance of Chinese equities, with sector opportunities likely to be more comprehensive. The bank believes that Chinese equity assets currently have a very high risk-return ratio and tactical allocation value.
The market may still focus on pricing the correction of monetary policy expectations, maintaining a tactical benchmark view on U.S. Treasuries.
As the marginal convergence of the U.S. economy and a slight cooling of the labor market occur, market expectations for looser Federal Reserve monetary policy have further strengthened. The bank believes that U.S. Treasuries currently have a moderate risk-return ratio and tactical allocation value.
The market's adjustment of expectations for looser Federal Reserve monetary policy is conducive to lowering the holding costs of gold, maintaining a tactical benchmark view on gold.
Recently, the global geopolitical situation has once again heated up, and the market's expectations for looser Federal Reserve monetary policy are conducive to lowering the holding costs of gold, which supports gold price performance to some extent. The bank believes that gold currently has a moderate risk-return ratio and tactical allocation value.
Expectations for Federal Reserve interest rate cuts strengthen and weaken the interest returns of the U.S. dollar, maintaining a tactical underweight view on the U.S. dollar.
The Federal Reserve's monetary policy guidance and expectations for looser monetary policy may marginally weaken the performance of the U.S. dollar compared to other currencies, and the upward movement of inflation expectations further weakens the allocation value of the U.S. dollar. The dollar currently has a relatively low risk-return ratio and tactical allocation value.
Risk Warning: There are limitations in the analysis dimensions, subjectivity in model design, deviations between historical and expected data, adjustments in market consensus expectations, and limitations of quantitative models
