Morgan Stanley Fund: A-shares may continue the pattern of wide fluctuations, with minimal risk of sustained downtrend.

Morgan Stanley Fund released its outlook for the A-share market, stating that the current market may continue to fluctuate widely. In the absence of effective policy validation, the risk of continued decline is not significant. Sectors with strong industrial logic, such as AI, industries with overseas advantages, and industries benefiting from domestic demand policies, are more likely to attract investors' attention. Morgan Stanley Fund stated that overall, the recent market downturn is more due to changes in trading behavior and less related to liquidity and macro fundamentals. The latest manufacturing PMI remains above the boom-bust line, although the price sub-index has performed poorly, market expectations are relatively sufficient. Moreover, the non-manufacturing PMI rebounded higher than expected, with sub-indices such as business activities, construction, and services showing improvement. From the perspective of liquidity, there has been no major change, with long-term government bond yields continuing to decline, reflecting a more pronounced asset shortage; the Securities Regulatory Commission has denied two rumors; to maintain market liquidity and better play the stabilizing role of securities fund institutions, the central bank has launched the second round of Medium-term Lending Facility operation, with 55 billion yuan officially implemented. In addition, the National Development and Reform Commission recently held a press conference focusing on six key areas of work, with expanding domestic demand in all aspects as the top priority. It will implement subsidies for purchasing new digital products such as mobile phones, giving subsidies to individual consumers buying digital products such as mobile phones, tablets, smart watches, and smart wristbands. In addition to digital products, the sales of cars and home appliances are also important, as these products account for a larger proportion of total sales, and if the effect continues, it will have a stronger stimulating effect on the economy. The addition of new subsidy categories on top of the existing subsidy intensity is expected to maintain the stimulative effect on consumption, so the possibility of improvement in consumption in the first half of this year is high; from a long-term perspective, consumption growth depends on the growth rate of residents' income and income expectations, and currently residents' income growth remains weak, so the recovery of the consumption growth center will be a slow process.