Brokerage Morning Meeting Highlights | It is not ruled out that there may be a "Trump trade" or "Harris trade" in the following week.

Last Friday, the market experienced unilateral decline in the afternoon, with the Shanghai Composite Index hitting a new low for the period and the ChiNext Index leading the decline. Overall, most stocks fell while few rose, with over 4700 stocks in the entire market experiencing a decline. The trading volume of the Shanghai and Shenzhen markets on that day was 542.6 billion, an increase of 7.8 billion from the previous trading day. In terms of sectors, insurance, automobile manufacturers, securities, e-commerce, etc. were among the top gainers, while photovoltaic equipment, foldable screens, PCB concepts, AI glasses, etc. were among the top losers. By the end of trading last Friday, the Shanghai Composite Index fell by 0.81%, the Shenzhen Component Index fell by 1.44%, and the ChiNext Index fell by 1.7%. At today's securities morning meeting, CMSC believes that there may be a "Trump trade" or "Harris trade" in the following week; CICC stated that the possibility of a 25 basis point rate cut by the Federal Reserve in September is greater; China Securities Co., Ltd. pointed out that the market has the conditions for a bottom, with three guidelines for positioning. CMSC: There may be a "Trump trade" or "Harris trade" in the following week. In the first week of September, the domestic economic situation continued the weak supply and demand pattern of July and August, with highlights mainly seen in the continued stimulation of new energy vehicles and home appliance consumption policies, and the basic catching up of the freight volume index to the level of 2023. In addition, the sentiment of trading old houses for new ones has somewhat dissipated, which may be related to some regions entering a phase of intensive transactions and weakening demand for cashing out. Regarding overseas factors, the August non-farm employment data showed that the U.S. economy is on a path of decline, but because it is difficult to realize a 100 basis point rate cut within the year, the adjustment of the U.S. stock market may not be over. The active restocking in the U.S. may be coming to an end, supporting the potential weakening of exports that have been underpinning the domestic economy in the first half of the year. Against this background, the issuance of government bonds and local government bonds has accelerated since August, which aligns with the "strengthening the foundation and fostering growth" policy tone. Domestic demand is expected to stabilize in the fourth quarter, and the extent to which it can effectively buffer the weakening of external demand remains to be seen. Of course, the first debate between the two U.S. presidential candidates is approaching, and there may be a "Trump trade" or "Harris trade" triggered by unexpected election results in the following week: the former may imply more concerns about tariffs; the latter may mean an increase in expectations of more Federal Reserve rate cuts, as well as the implementation of corporate and wealth taxes. CICC: The possibility of a 25 basis point rate cut by the Federal Reserve in September is greater. CICC stated that the decrease in the unemployment rate in the U.S. in August reflects a reversal of temporary unemployment, in line with expectations, but the slowdown in the growth of non-farm employment indicates a decrease in demand for labor by companies. The good news is that there are no signs of significant layoffs by businesses, and the number of initial jobless claims remains low. This indicates that the labor market remains stable and has not "fallen off a cliff". Looking ahead, the U.S. economy is still expected to achieve a soft landing, but the Federal Reserve must take action. The possibility of a 25 basis point rate cut by the Federal Reserve in September is greater, and it may also increase the rate cut amount depending on the situation. China Securities Co., Ltd.: The market has the conditions for a bottom, with three guidelines for positioning. China Securities Co., Ltd. pointed out that, despite recent downward revisions in profit expectations and subdued investor sentiment, the market as a whole has the conditions for a bottom. The current market position and phenomena exhibit characteristics of a bottoming area, but the Fed's rate cuts and domestic policy efforts will improve valuation and profit expectations. In addition, the base effect may result in a year-on-year upward trend in fundamental data for the fourth quarter. Investors should be prepared to position themselves opportunistically. Three bottoming positioning guidelines are: leveraging the improvement in the real economy based on equipment upgrades and the replacement of old goods in the consumer sector, focusing on sectors with strong resilience in domestic demand related to mid-year reports, and focusing on valuation recovery trends in growth directions with their own industry logic. Key sectors to watch include: home appliances, automobiles, non-bank financials, defense, lithium batteries, electronics, pharmaceuticals, etc.