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According to China Securities Co., Ltd. (601066), the domestic economy continues its weak recovery with a structural K-shaped divergence.

The recovery is reflected on the production side: the September manufacturing PMI rebounded to 50.1, back above the boom-or-bust line, and August PPI rose 3.8% year-on-year (versus -1.4% in January), showing a clear price recovery.

The divergence is mainly on the demand side: August retail sales grew only 0.4% year-on-year, fixed asset investment fell 7.2% year-on-year in January-August, while exports surged 25.0% year-on-year in USD terms. The K-shaped structure of "domestic demand under pressure, external demand providing support" has not yet reversed.

On the policy front, monetary policy remains "moderately accommodative." The September 1-year and 5-year-plus LPRs held steady at 3.0% and 3.5% respectively, with continued liquidity support at quarter-end. No large-scale fiscal stimulus has been introduced, while the property sector added interest subsidies for first-home mortgages to stabilize the market. Regulators have made clear their intent to enhance the internal stability of A-shares and prevent sharp swings.

Overseas, repeated geopolitical disruptions to energy and supply chains keep stagflation risks elevated. The Federal Reserve maintains a hawkish stance, the 10-year U.S. Treasury yield rose to 5.29% (up about 85bp from end-June), the global monetary environment remains tight, and global assets are still expected to see high volatility. (Data source: WIND; past performance does not guarantee future results, markets carry risk, invest with caution)

A-shares: Stay neutral, stay balanced, manage risk

Last month's view was to "maintain a neutral position, balanced allocation, and risk control." In September, the market continued its volatile adjustment, with the tech growth style correcting, while real estate, pharmaceuticals, and banking sectors saw some repair. Looking ahead to October, we maintain the strategy of "stay neutral, stay balanced, manage risk."

Positive factors for the market: first, the July-September adjustment has already digested some of the crowding and valuation in the tech sector, improving the asset's cost-effectiveness; second, the CSI 300 risk premium is about 5.9%, at roughly the 75.8th percentile over the past decade, again approaching the opportunity zone; third, the AI narrative is still advancing; and fourth, the rapidly rising U.S. Treasury yields may see a phased correction, giving the market some breathing room.

Constraints on the market: first, geopolitical uncertainty remains, and high energy prices put huge pressure on a major manufacturing country like China; second, technical indicators of major broad-based indices have not yet shown a successful bottoming structure, and major market opportunities may still need to be observed. Strategically, one may maintain a neutral position, balanced style, and lower turnover frequency, waiting for band-entry opportunities brought by sharp declines, or establish a plan to add positions by certain increments for each decline to position for a possible recovery rally. (Data source: WIND; past performance does not guarantee future results, markets carry risk, invest with caution)

(From the WIND All-A index 10-year risk premium level of 68.43%, the overall valuation of the current A-share market is at a moderately low level. Data source: WIND, 20260930; past performance does not guarantee future results, markets carry risk, invest with caution)

Areas to watch

True growth (looking for mispriced opportunities): AI remains a long-term main line, but new industry catalysts are needed. In the short term, the expected annual capex growth rate for the AI industry has been cut from 80% to 50% by 2027, and AI traffic growth has also slowed; however, penetration in AI applications is extremely low, and as capabilities improve and usage costs decline, the long-term space is broad, so the AI direction may still have opportunities. In allocation, one may choose balanced products that can control volatility and drawdowns as a base, and wait for layout opportunities in computing power, semiconductors, communications, and other domestic tech chain directions after they adjust sufficiently. The tech sector carries high risk and volatility, so risk control must be done well.

True recovery (looking for band satellite allocation): innovative drugs, non-ferrous metals, real estate, and other directions may still have left-side opportunities to buy on dips. Innovative drugs benefit from AI plus innovative drugs, ADC and other technological progress, as well as overseas pharmaceutical companies' cooperation with domestic drugmakers gradually landing, and current institutional holdings are not crowded; non-ferrous metals have a tight supply side, and the overall sector may have opportunities; whether new stimulus policies for real estate can be effective remains to be seen, and investment opportunities cannot be ruled out.

True dividend (cost-effectiveness still in an allocable range): the CSI Dividend risk premium is at a medium level; regulators' rigid constraints on listed company dividends and the long-term increased allocation trend of insurance funds provide structural incremental capital support for the dividend sector.

Hong Kong stocks: observe the bottom

Hong Kong stocks have remained relatively weak this year and are currently in a bottom-observation range. The phased diversion of capital is not a long-term trend. Leading Hong Kong companies have generally stable cash flows, valuations remain at historically low percentiles, and they hold certain positioning advantages in the AI industrial transformation. If the AI rally later spreads to the mid- and downstream, heavyweight stocks such as Tencent and Alibaba with AI large-model barriers may perform, and the medium- to long-term strategic allocation value of the Hang Seng Tech may still exist. In the short term, the main approach may be modest left-side allocation on declines. (Data source: WIND; not a recommendation of individual stocks, past performance does not guarantee future results, markets carry risk, invest with caution)

China bonds: focus on short-duration coupons, guard against crowding in long duration, be moderately cautious on convertibles

The bond market was generally volatile in September, with the 10-year government bond yield stable at a low of 1.67%-1.69%, down about 22bp year-to-date. Weak fundamentals, accommodative monetary policy, and a decline in risk appetite in the equity market bringing capital back together form the support; however, the absolute level of interest rates is currently low, the average duration of bond funds has risen from about 2 in June to 3-4, and capital is concentrated in medium- and long-duration bonds, so bond risk may rise slightly in the fourth quarter.

Short bonds: maintain neutral holdings, with stable coupon income as the core, and lower return expectations. Long bonds: range-bound, mainly hold. Those who have already allocated core pure bonds may moderately reduce positions at the right time; those who have not allocated are advised to wait until the 10-year government bond yield returns above 1.7%, or until concentrated funds are released, before allocating, which may offer a better margin of safety. Convertible bonds: moderately cautious. The CSI Convertible Bond Index fell 5.11% in September and 4.53% year-to-date, and has continued to break down since February 2026. As a forward-looking indicator of the equity market, its current performance is weak. (Data source: WIND; past performance does not guarantee future results, markets carry risk, invest with caution)

Overseas assets: U.S. stocks continue the AI logic, U.S. Treasuries in a watch-for-allocation window

U.S. stocks: the AI logic is expected to continue and expand to AI consumption, while U.S. corporate earnings outlook is also good. U.S. stocks still have some allocation value, but investors should not allocate to related on-exchange traded funds at excessively high premiums. Other overseas equity assets: pressured by high oil prices and dollar liquidity, markets such as India and Vietnam remain under pressure and may warrant continued waiting and watching; Japanese and Korean AI assets have seen allocation value improve somewhat after sharp adjustments and may deserve appropriate attention; the Brazilian market is highly correlated with precious metals and oil prices and can be kept on the radar; the European market has weak AI exposure and is also pressured by high oil prices and dollar liquidity, but traditional asset valuations have certain global appeal, so one may wait for left-side opportunities on declines.

Overseas dollar bonds: the current 10-year U.S. Treasury yield is at a historical high. For investors with large future dollar consumption or many dollar assets, the value of using dollar assets for left-side allocation to U.S. Treasuries is gradually emerging. For RMB-denominated investors, they may consider phased satellite allocation to U.S. Treasuries when the RMB's phased appreciation pauses.

Commodity markets: structural opportunities exist

Global monetary policy fluctuations amplify commodity volatility. Lower expectations for one-way gains and differentiate allocation by variety:

Precious metals: short-term performance is weak under pressure from Fed rate hike expectations. After rate hike expectation trading is completed, a recovery from the slump is likely. Considering that central banks are still actively buying gold, the medium- to long-term allocation value of precious metals remains; investors may use small proportions, fixed amounts, and batch allocation, and should not bet heavily.

Non-ferrous metals: because the supply side remains tight, most research institutions remain bullish. Copper prices are near year-to-date highs, supported by rigid costs and supply. AI data centers are driving incremental demand for copper and other metals, but changes in U.S. tariff policy on copper need attention.

Energy and chemicals: the duration and intensity of geopolitical conflicts determine oil price direction, which may show high-level wide-range fluctuations. Appropriately reduce positions when geopolitics is tense and oil prices spike, and lightly build positions when geopolitical tensions ease and oil prices fall sharply. Sticking to selling high and buying low may be a suitable strategy for the current environment.

Agricultural products: there are not many overall trading hotspots in October. Pay attention to South American planting conditions and weather that may bring supply disturbance opportunities.

Private fund strategies: opportunities remain in index enhancement, CTA, and other strategies

Index enhancement: overall market valuation is medium, small- and mid-cap style is relatively strong, individual stock gains outperform the index, and stock selection difficulty has declined. July 2026 was the most difficult stage for excess returns this year, and the market may now be in an excess-return repair range. Investors need to think mainly from a BETA perspective while controlling risk, and choose varieties with strong risk resistance.

CTA strategies: the operating environment is improving and trendiness is improving, highlighting allocation value. Among them, cross-sectional long-short strategies may better fit the current environment, and investors may consider a multi-strategy combination of "cross-sectional plus multi-period trend."

Neutral strategies: excess returns are repairing, and allocation may be considered at a time when the basis is suitable. Current hedging costs remain high, and position building requires timing.

Subjective long-only: the current market's structural行情 is quite extreme and rotation is fast. Subjective long-only strategies with fundamental stock selection and industry rotation capabilities, as well as some specific strategies, are expected to win in the future.

Under the multiple constraints of "hawkish Fed plus high oil prices plus AI narrative awaiting continuation plus domestic demand under pressure," it may still be difficult for the market to improve significantly in October. Investors may "stay neutral, stay balanced, manage risk," actively pay attention to opportunities brought by mispricing, actively pay attention to left-side opportunities, and actively pay attention to multi-asset and multi-strategy opportunities in overseas markets, commodities, and more, while strictly assessing portfolio return and drawdown risks.

Sina statement: This message is reprinted from a Sina partner media outlet. Sina publishes this article for the purpose of conveying more information and does not mean it agrees with its views or confirms its description. The article content is for reference only and does not constitute investment advice. Investors operate at their own risk.