The previous market analysis suggested that the market has entered a consolidation phase, requiring certainty-focused investments amid intensifying multi-directional confrontation and increased volatility. This includes: 1) anti-involution certainty driving price improvements, 2) certainty in global industrial chain positioning, and 3) certainty in domestic consumption demand. The recommendation for certainty-focused investing stems from heightened market disagreements leading to increased uncertainty. While investment fundamentally involves risk pricing, at this crossroads with diverse investor approaches and varied actions, trading excessive uncertainty becomes a cost-exceeding-benefit behavior. As external shocks resurge, uncertainty continues mounting, risk premiums are stirring again, making certainty-based strategies more urgent to implement.
**I. Last Week's Market Review: Gold Trading Ceiling**
From last week's major asset performance, gold's significant growth trajectory from the previous week showed weakness, consistent with our assessment that Federal Reserve rate cut trading has largely concluded. As global risk premiums rise, investor confidence in gold pricing has increased, though substantial disagreement exists regarding how high gold might climb.
One representative view suggests that if AI is acknowledged as the dominant future industry, gold analysis should focus on whether AI can enhance production efficiency, trigger hardware revolution, promote economic growth, and resolve distribution issues. The basic logic involves using AI to reduce costs and increase efficiency, lower deficit ratios, reduce unnecessary expenditures and government operational costs, improve government efficiency, decrease manufacturing costs, enhance total factor productivity, and ultimately achieve high-quality development led by AI+. This trend has been validated by both Chinese and US government "AI action plans." From this logic, gold's ceiling appears determined. This effectively shifts gold analysis from virtual concepts like inflation, weak dollar, and safe-haven thinking toward real industrial "development" thinking. Against the backdrop of global new order reconstruction, development thinking clearly aligns better with universal public demands, forming the foundation for global asset revaluation including Chinese assets.
Analyzing other assets: CSI Star 50, Hang Seng Tech, and ChiNext Index performed notably better than Beijing Stock Exchange 50, reflecting investor differentiation between traditional and emerging technology. Treasury bonds, China Development Bank bonds, and medium-to-high grade credit bonds saw minor adjustments, indicating major asset allocation disagreements remain unresolved. The RMB-USD exchange rate showed minimal movement, reflecting both modest Federal Reserve rate cuts and China's central bank's limited desire for RMB appreciation.
From A-share weekly trends, electronics rebounded significantly, reflecting retail investors' trend acknowledgment, differing from institutional investor behavior. Real estate's rebound revealed investor hopes for government intervention to safeguard economic aggregate, also trading expectations for Chinese reserve requirement and interest rate cuts following Federal Reserve actions. Reviewing historical trends, without real estate stabilization, such scenarios represent waves rather than trends. Banking sector's modest decline partly reflects incomplete confirmation of market style "high-low switching" and concerns about potential interest rate cuts eroding bank profits and risk-bearing capacity.
**II. Macroeconomic Data Shows Anti-Involution Policy Effects**
Recent month's disagreements have shifted from fundamental-risk preference gaming toward institutional behavior gaming, with institutional and retail investor action paths diverging. These disagreements primarily stem from different views on internal fundamental factors versus trading factors, with limited correlation to external shocks.
Last week's asset movements reflecting domestic macro and industrial characteristics have been validated by subsequently released economic data. Price, social financing, credit, and foreign trade data offer no new insights regarding total economic endogenous momentum, at most reflecting policy intensity value. CPI weakness reflects insufficient consumer demand, possibly related to fiscal subsidy reduction. PPI recovery directly results from "anti-involution" policies, representing certainty we clearly identified for positioning in the previous analysis. Export growth deceleration represents inevitable reaction following previous export surges, reasonably correcting the notion that ignoring major US market trade could sustain high growth. Social financing growth remains stable, neither indicating significant capital market entry nor clear signals of real economy credit expansion. In August 2025, China's new RMB loans totaled 589 billion yuan, below last year's 900 billion yuan, showing relatively weak current credit demand. Despite central bank measures to relax monetary conditions and stimulate lending, including reduced borrowing and liquidity rates, total amounts still declined.
**III. External Shocks Elevate Risk Premiums**
Since China-US Geneva negotiations, investors have benignently ignored "reciprocal tariff" impact shocks, seemingly dismissing this major factor. Moreover, considering external factor influences primarily focuses on potentially favorable Federal Reserve rate cuts, continuing to emphasize liquidity abundance as necessary conditions. According to our logic, risk premium changes from external shocks represent critically important sufficient conditions, potentially playing decisive roles in Chinese asset revaluation.
Since China-US renewed economic and trade negotiations in Spain began, global tariff impact shocks have re-entered investor focus. Middle East turmoil intensification, renewed Russia-Ukraine conflict flames, and increased global political, economic, and military uncertainties have elevated risk premiums, further disrupting asset allocation rhythms. Currently, these shocks can be incorporated into external effects within Trump's global new order reconstruction. Early this year, based on "responsibility-momentum" logic and five-year China-US work (2025-2029), we concluded Trump's "external pacification requires internal stability" assessment, believing risk premiums would decrease. Subsequently, with reciprocal tariff introduction, we believed that despite escalated gaming, conflicts had clear boundaries. Simultaneously, China's stabilization fund introduction fundamentally resolved investor concerns about market failure triggering financial risks, significantly reducing risk premiums.
From mid-August, we reminded investors not to forget external conflict impacts on risk premiums, requiring attention to Citi Economic Surprise Index-represented risk premium elevation market impacts. Before recent China-US Spain negotiations commenced, China-US gaming began intensifying, with Trump incorporating Russia-Ukraine conflicts into broad negotiation scope, further complicating agreement achievement predictions. China will soon begin formulating the 15th Five-Year Plan, making these negotiations crucial for internal policy adjustments, with possibilities of continued delays or even escalated conflicts. From China's internal policy perspective, short-term risk hedging measures remain unclear. Therefore, short-term risk premium elevation probability appears substantial, with latest Citi Economic Surprise Index validating this trend.
**IV. Strategic Outlook**
From economic growth fundamentals, low-volatility dividend strategies prove effective during turbulent periods, with stock-bond disagreements showing convergence trends. Main bearish bond factors include China's central bank unlikely to cut rates even with Federal Reserve cuts. Additionally, even with A-share market adjustments, ignited enthusiasm may pause slightly but would unlikely shift toward bond markets.
For equity markets, as risk premiums increase, markets are expected to continue consolidating through adjustments, with pure market sentiment no longer the primary driving force. We continue recommending positioning based on previously mentioned certainties. Investors should note that the Ministry of Commerce decided to initiate anti-dumping investigations on imported related analog chips from the US starting September 13, 2025, inevitably reigniting import substitution trends. However, this represents negotiation leverage before China-US gaming, similar to the US Commerce Department's Bureau of Industry and Security revising Export Administration Regulations (EAR) one day earlier, adding 23 Chinese entities to the controlled entity list.
Demand catalyzed by markets themselves rather than external forces represents true value investing sources. In new order industrial chain reconstruction, we consistently believe globalization requires key positioning focus.