Last week, most A-share broad-based indices continued their rebound, with market trends favoring resources and AI sectors. Non-banking industries gained traction, while commercial aerospace and robotics themes boosted defense and machinery sectors. Media, computers, real estate, and consumer sectors lagged.

**Macro Analysis: Fed Meeting and Central Economic Work Conference in Focus** Domestically, key developments included: 1. The CSRC chairman emphasized accelerating the development of top-tier investment banks and institutions to bolster capital market growth, proposing relaxed capital and leverage constraints for high-quality firms. Leading brokerages may benefit, potentially lifting market sentiment. 2. The Financial Regulatory Authority adjusted risk factors for insurers' long-term holdings, lowering the risk factor for Sci-Tech Innovation Board stocks held over two years from 0.4 to 0.36, encouraging sustained investment in tech innovation. The insurance sector rebounded on this catalyst, with non-banking sectors poised to lead year-end sentiment. 3. The PBOC maintained ample liquidity via medium-term tools (MLF and outright reverse repos) to support government bond issuance and credit expansion, while net withdrawals of short-term funds (7-day reverse repos) aimed to prevent excess liquidity.

Globally, weaker-than-expected U.S. ADP employment data (-32K vs. +10K forecast) heightened December rate-cut expectations, easing pressure on risk assets. Fed officials signaled potential easing, with the labor market in a "tight balance."

**Outlook**: December events include China’s Politburo meeting, Central Economic Work Conference, and economic data releases, alongside the Fed’s policy decision and U.S. inflation figures.

**Investment Strategy: Year-End Rally Favors Tech, Brokers, and Consumer Sectors** Market tailwinds from policy, liquidity, and fundamentals suggest tactical aggression: 1. Anticipated proactive fiscal/monetary measures amid the "15th Five-Year Plan" launch in 2026. 2. Potential Fed rate cuts could stabilize the yuan, enabling domestic easing in early 2026. 3. Regulatory reforms (insurer risk factor cuts, broker leverage easing) bolster risk appetite.

Sector preferences: 1. **Tech Growth**: Focus on Hong Kong internet/media/computing and manufacturing exports (e.g., power/industrial equipment). 2. **Financials**: Brokerage/insurance reforms and bank dividends. 3. **Cyclicals**: Undervalued consumer stocks (F&B, agriculture, tourism) and commodities (metals/chemicals).

*Disclaimer: Information sourced from reliable channels and analyst judgment; accuracy not guaranteed. Opinions subject to change. Not investment advice. Reproduction prohibited without permission. Market risks apply.*