China Securities Co., Ltd.: A-share market shows initial bottoming characteristics, expansion of domestic demand policy continues to exert force.

China Securities Co., Ltd. Chief Strategist Chen Guo stated that the core CPI in the U.S. exceeded expectations in August, but speeches from Federal Reserve officials were dovish. The interest rate cut by the Federal Reserve is expected to help stabilize the market. A 50 basis point cut would signal a dovish stance and strengthen expectations for a soft landing. China's policies are entering a critical observation period. In the short term, sentiment in the A-share market is extremely low, with strong stocks experiencing corrections, showing characteristics of a market bottom. The future market trend will depend on further stimulus policies to boost domestic consumption. Key sectors to focus on include platform economies, defense, pharmaceuticals, home appliances, automobiles, real estate, construction machinery, and electronics. China Securities Co., Ltd.'s main points are as follows: The Federal Reserve's dovish signal should benefit certain sectors. The core CPI in the U.S. exceeded expectations in August, but dovish comments from Federal Reserve officials indicate a rate cut is forthcoming, which would help stabilize expectations. The Labor Department released CPI data for August. The year-on-year CPI growth rate in August in the U.S. dropped to 2.5%, a significant decrease of 0.4 percentage points for the fifth consecutive month. This was mainly driven by a sharp decline in energy prices, while the core CPI held steady at 3.2% year-on-year and increased by 0.3% month-on-month, reflecting a stagnation in inflation reductions. Under the context of interest rate cuts, Hong Kong stocks have performed better than A-shares and have been more influenced by offshore liquidity flows. Focus will be on major central bank meetings, particularly the Federal Reserve and Bank of Japan decisions. The first round of U.S. presidential debates has ended, potentially entering a "Harris Trading" window. Dividend sectors have collectively adjusted, with short-term trading impacts being more significant. The rapid increase in concentration of trading chips brings with it volatility risks, while the long-term logic still relies on the scarcity of long-term funds and asset allocation needs. The decline in the dividend index to a certain extent reflects investors' lack of confidence in the future market, while also releasing emotional pressures. All three major indices in A-shares fell, with previously strong sectors such as banks experiencing significant corrections. Market sentiment is extremely low, potentially at the bottom, while the strength of bearish forces has weakened. Revisiting the performance of various market bottoms, strong sector corrections often signal the end of market adjustments. China's policies are entering a critical observation period, with short-term market sentiment in A-shares being extremely low and strong stocks experiencing corrections, indicating characteristics of a market bottom. The future market trend still depends on the implementation of stimulus policies to boost domestic consumption, with a focus on key sectors that drive domestic demand. Seize active investment opportunities, as the platform economy has undergone positive changes and accelerated transformation in the past three years, entering a new phase. Online growth rates have recovered first, focusing on the internet platform economy; the phase of sharp decline in real estate sales volume is gradually passing, with related support policies to look forward to. The effectiveness of domestic stimulus policies to promote the exchange of old for new is beginning to show results, leading to expectations for further stimulus. Key sectors to focus on: platform economy, defense, pharmaceuticals, home appliances, automobiles, real estate, construction machinery, and electronics. Risk alerts: 1) Geopolitical risks: Poor management of U.S.-China relations could escalate political, military, technological, and diplomatic confrontations between the two countries. 2) Overseas Federal Reserve easing below expectations. 3) Domestic economic recovery or steady growth policies may not produce expected results.