CITIC Securities: A-shares focus on stability, pay attention to opportunities in public utilities such as nuclear power and telecommunications operators

According to the information from Zhitong Finance and Economics APP, Zhongtai Securities released a research report stating that the determination of the total quantity policy and the intensity of financial regulation have not changed. This week, the A-share market stabilized overall, and the main indices saw a slight rebound. Zhongtai Securities indicated that the overall strategy for the market in the second half of the year remains stable, with a focus on sectors such as nuclear power, telecommunications operators, public utilities, core military industry, and non-ferrous metals. Opportunities related to the global expansion of manufacturing industries such as construction machinery and power equipment can be gradually accumulated on dips.

Key Points from Zhongtai Securities:

What characteristics might the "year-end and New Year" market show in the fourth quarter?

This week, the A-share market stabilized overall, with the main indices seeing a slight rebound. The disturbance caused by the economic data released in early September gradually eased, leading to a slight oversold rebound in the market after the holiday, with sentiment showing some improvement. On the other hand, the 50 basis point rate cut by the Federal Reserve strengthened the Hong Kong stock market, to some extent boosting sentiment in the A-share market. Recently, the export chain represented by power equipment, new energy, and the ChiNext board began to rebound, leading the market. The reason behind this is that in the U.S. presidential debate, Harris performed relatively well, thereby reducing expectations for future tariffs.

The first televised debate after the reshaping of the U.S. presidential election landscape (Trump vs. Harris) was held in Philadelphia on the evening of September 10. Overall, Harris had a relatively favorable performance in this debate. According to data from the polling website RCP, expectations for Harris's election increased significantly after the debate. Due to the extreme complexity of this year's election situation, it is highly susceptible to various unexpected events. Even if Harris performed well in the debate, it is still difficult to say with "high probability" that she will win. Meanwhile, in the second half of this year, factors such as China's anti-subsidy investigation on EU dairy imports, the intensification of the U.S. tariffs on new energy products during the heated election phase, will lead to a complex situation of ups and downs in the export chain stabilization. Therefore, we maintain the strategy of gradually accumulating positions on the export chain segments closely related to the global manufacturing expansion cycle, represented by construction machinery and power equipment.

As we enter the fourth quarter of this year, from mid-November to the two sessions next year, the market may see expectations of a new round of stimulus policies, leading to a market rebound. Depending on the outcome of the U.S. presidential election, this year's "year-end and New Year" market may present two completely different main themes.

If Harris is elected, with expectations of relatively controllable Sino-U.S. relations, the export chain, ChiNext board, and other sectors may experience a strong rebound. However, under her election expectation, both the U.S. tariff and domestic stimulus expectations will weaken. Therefore, cyclical sectors such as non-ferrous metals and real estate may also rebound due to the impact of new year policy expectations, but their performance may be relatively weaker than before. As market expectations align with the fundamentals, the valuation of related sectors after the rebound may stabilize at a certain central level.

If Trump is re-elected, along with his weak U.S. dollar policy to boost U.S. exports, and a larger rate cut by the Federal Reserve, coupled with his strong tariff expectations, the market will anticipate further efforts in domestic total quantity policies to counter the expected export decline. At this time, non-ferrous metals, especially cyclical sectors like real estate, will experience a certain rebound. However, it is advisable for investors to operate in a short-term manner during this rebound scenario. If Trump is re-elected, it may bring about strong global geopolitical turbulence, and China's policy direction will focus more on security rather than stimulus Risk Warning: In the event of macro policy adjustments falling short of expectations, industrial policy implementation falling short of expectations, and considering the risks of policy underperformance as well as market sentiment instability, there may be risks of information lag or untimely updates in the public data used in the research report