The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the pattern of market shocks will continue, and there is no need to worry too much when the index falls. Changxin Technology's listing is favorable. The market is expected to remain strong in the short term due to the market's high risk appetite before visiting the US. However, PPI peaked year on year or caused corporate profit growth expectations to slow down, market structure failed to improve, and long-term market fragility increased. The industry configuration is centered on the main line of technology+excessive decline rotation. The industry focuses on: AI (semiconductors, optical communication), brokerage, humanoid robots, commercial aerospace, biotechnology, dividend assets, Hong Kong stock internet, etc.
CITIC Construction Investment's main views are as follows:
The market continued its volatile pattern, and the index was supported by the key moving average below
The pattern of market shocks will continue, and there is no need to worry too much when the index falls. The market rebounded from a low level this week after falling earlier, and the main broad-based indices all received strong support at the lower key moving average. Considering that current A-share companies' profits are still in an upward cycle, domestic liquidity is still relaxed, the Federal Reserve has yet to raise interest rates, and the market risk appetite is still high in the third quarter, judging that the market does not yet have a basis for a bull or bear transition. As far as the current market is concerned, the core contradiction is that incremental capital is insufficient. Due to the capital stock game, the market is unable to start an all-round rise. The market structure is divided and the “seesaw” effect between sectors is obvious. High valuation levels and marginally tight global monetary policies are key reasons for the slowdown in incremental capital inflows.
The market is expected to remain strong in the short term, but long-term vulnerability is rising
The market is still strong in the short term: Changxin Technology's favorable listing may drive the semiconductor sector to continue to be strong in the short term and fluctuate expectations in the medium term. Historically, the market risk appetite was high a few months before the meeting between the leaders of China and the US. Risk appetite declined after the meeting, and there were many market shocks and reversals. Typical examples include Trump's visit to China in '17, the Busan meeting in '25, and around Trump's second visit to China in '26.
Long-term vulnerability has increased: judging from the latest inflation data, PPI has peaked or is about to peak year over year. If PPI is confirmed to peak year-on-year in the future, corporate profit growth expectations may slow down, and at the same time, the upstream resource market under the “re-inflation” logic of the market will be unsustainable. Furthermore, the market structure did not improve this week. Continuously tracked indicators reflecting strong and weak levels of the market exceeded 60MA and overbought and oversold all showed a marked decline. In the short term, since the two major indicators of over 60MA and overbought and oversold are both in a low position, the market is expected to rebound at a low level, and style rebalancing and the rebound in the oversold sector will continue. In the long run, the current market structure is still weak and needs to be repaired urgently.
Looking back, after entering August, the market direction is expected to become clear. After variables such as the launch of large-scale IPOs, the introduction of policies at the Politburo meeting, the FOMC meeting results, and the financial results of key companies are clear, the market is expected to determine the direction and start a new round of market conditions.
Industry configuration ideas: main line of technology+excessive decline rotation
The market has gradually entered the interim report verification stage. Currently, 264 companies have reported good news (198 in advance, 26 with a slight increase of 26, 3 with a reversal of losses), with an overall forecast rate of 72.7%. The boom mainly revolves around three clues: the explosion of demand in the AI industry chain, the year-on-year change in PPI driving profit growth for upstream resource products, and the improvement in brokers' profits due to active capital markets. The industry configuration is centered on the main line of technology+overfall rotation. 1) Expected improvements: AI computing power; 2) event catalysis: brokerage, humanoid robots, commercial aerospace; 3) excessive decline rotation: biotechnology, dividend assets, Hong Kong stock internet, etc.
Risk Alerts
(1) The effect of the domestic demand support policy was lower than expected. If subsequent domestic real estate sales and investment data are slow to recover, inflation continues to be sluggish, consumption is not clearly boosted, corporate profit growth continues to decline, and economic recovery is ultimately falsified, then the overall market trend will be under pressure, and overly optimistic pricing expectations will face correction.
(2) Risk of deterioration of the geographical situation in the Middle East. Be wary of the further escalation of the US-Iran conflict. The upward trend in international oil prices will increase global inflationary pressure and limit the monetary easing space for domestic and foreign central banks. If inflation is viciously interpreted, it may drag down aggregate economic demand, increase the risk of global economic recession, and have an impact on the equity market.
(3) The fluctuations in the US stock market exceeded expectations. If the US economy deteriorates beyond expectations, or if the Federal Reserve's easing falls short of expectations, it may cause large fluctuations in the US stock market, which will also have a spillover effect on domestic market sentiment and risk appetite.