CITIC Construction Investment: Dealing with A-share market shocks through “rebalancing”
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that A-share sentiment is picking up, driven by a rebound from overseas, and internal funding is still in the process of being rebalanced. The pace of restoration may be slightly steady, and the bottom is solid and ready to go. Overseas, the Federal Reserve is cautious and reaffirms that the 2% inflation target is unshakable, putting short-term pressure on global risk assets, but its clear statement that stabilizing long-term interest rates and flattening the curve will help ease laid-back concerns about excessive tightening of financial conditions. Nvidia's financial reports and guidance surpassed expectations, confirmed the resilience of AI capital expenditure and computing power requirements, and protected medium- to long-term fundamentals in the technology sector. In terms of configuration, “rebalancing” is used to improve the adaptability of the combination to a volatile market: reserve positions on a circuit where the economy is continuously verified, and at the same time allocate defensive positions and low levels to make up for growth, and find inflection points where “cheap valuation+low institutional allocation+marginal improvement in fundamentals” resonates. The industry focuses on: AI computing power, non-ferrous, innovative drugs, banking, non-banking, petroleum, coal, steel, agriculture, etc.
CITIC Construction Investment's main views are as follows:
Overall turbulence, short-term restoration, solid bottom, ready to go
In terms of overall judgment, A-shares are still in the midst of an “overall fluctuation and short-term recovery.” It has been emphasized many times before that the core reason for this round of adjustments is not the deterioration of fundamentals, but mainly due to congested transactions and pressure on chips. The market experienced a phased correction due to lack of incremental capital. In the short term, sentiment in the A-share market has picked up somewhat, driven by a rebound from overseas. The pricing for negative factors was already sufficient in the early stages, but internal capital is still in the process of being rebalanced. The pace of restoration may be slightly steady, and the overall market is “consolidated at the bottom and ready to go.”
The Federal Reserve is cautiously hawkish, and the tech boom is still protected
In his speech, Walsh clearly reiterated that the 2% inflation target is unshakable, and recent good PCE and CPI data are not enough to prove a substantial improvement in the underlying inflation trend, suggesting that if inflation does not improve enough, interest rates may still be raised in the future. The Federal Reserve's hawkish statement puts short-term pressure on global risk assets. In the medium term, if Walsh's statement can effectively stabilize long-term interest rate expectations and flatten the yield curve, it will help ease concerns about excessive tightening of financial conditions and create conditions for the equity market to recover in the medium term.
Nvidia's strong financial performance and optimistic performance guidance have greatly exceeded market expectations, further confirming the resilience of AI capital expenditure and computing power requirements, temporarily dispelling market concerns that AI demand is peaking, and providing strong support and protection for the medium- to long-term fundamentals of the technology and AI sectors. Hwang In-hoon said “AI has reached an inflection point” and “computing power is being converted into revenue.”
Improve the adaptability of the portfolio to volatile markets through rebalancing
Under the current volatile pattern where the market “has a top and bottom”, a stock game, and an upward index breakout requires stronger catalysis, the core idea of the industry configuration is to “rebalance” to improve the adaptability of the portfolio to a volatile market, neither excessively betting on the direction of high prosperity, nor abandoning the core main line due to short-term pullbacks. Reserve certain positions on racetracks where prosperity is continuously verified, especially the direction with the highest performance certainty, such as AI computing power hardware, non-ferrous metals, innovative drugs, and some overseas manufacturing.
On the other hand, defensive bottom positions and low levels are moderately allocated to achieve a balanced layout and dynamic rebalance structure of high prosperity and low volatility. Recently, the characteristics of diversification and rebalance of market capital have increased markedly. Institutional capital is no longer concentrated on a single track, but is skewed towards balanced allocation of multiple sectors. The direction of “increasing weight and finding inflection points” in the direction of low allocations is looking for a signal that “cheap valuation+low institutional valuation+marginal improvement in fundamentals” resonates.