Last week, the Bank of Japan governor signaled a potential rate hike in December, pushing Japanese bond yields higher and briefly sparking concerns about a reversal in carry trades, leading to broad adjustments in global markets. Later, the unexpected contraction in the U.S. ADP employment report—showing a loss of 32,000 private-sector jobs in November, far below the expected gain of 10,000—further fueled expectations of Fed rate cuts. According to CME data as of December 6, markets priced in an 86.2% probability of a 25bp Fed rate cut in December.
Domestically, China’s November manufacturing PMI edged up but remained below the expansion threshold. The official manufacturing PMI stood at 49.2% (up 0.2 percentage points month-on-month), while the non-manufacturing PMI dipped to 49.5% (down 0.6 percentage points). The composite PMI was 49.7% (down 0.3 percentage points). Details showed modest improvements in both production and demand, with the production index and new orders index at 50.0% (up 0.3 percentage points) and 49.2% (up 0.4 percentage points), respectively. However, PMIs for high-tech manufacturing, equipment manufacturing, and consumer goods manufacturing declined, while energy-intensive industries saw a low-level recovery.
In equities, despite cautious sentiment ahead of mid-December macro events (economic meetings, FOMC), which led to further declines in trading volumes, A-shares rebounded slightly, supported by rising Fed rate-cut bets and regulatory easing for insurers’ investment risk factors. Global commodities extended gains, with non-ferrous metals leading.
Looking ahead, positive weekend news—particularly measures to expand broker capital space and adjust insurers’ investment risk weights—may bring substantial incremental funds, likely buoying short-term market sentiment and indices. Medium-term, the upward trend remains intact, and with the late Lunar New Year (February 16) and the "Two Sessions" (typically starting March 4–5) closely spaced, the spring rally could start earlier, possibly in January–February.
For allocation, focus on three themes: (1) High-dividend assets like banks, highways, and coal, benefiting from insurers’ capital inflows; (2) Growth sectors with solid fundamentals, such as computing power, storage, and energy; and (3) Tactical opportunities in short-term themes like commercial aerospace and robotics, which may attract quant-driven momentum.
Risk Disclosure: The views expressed are personal and based on specific market conditions and assumptions, not guarantees of future performance. Past returns of indices or sectors do not predict future results or fund performance. Historical holdings are not indicative of current or future positions. Investments carry risks; carefully review fund documents and assess personal risk tolerance before deciding. This material is not investment advice or a legal document. No liability is accepted for any losses arising from its use.
MACD golden cross signals formed, with select stocks performing well.