Sinolink Securities Macro: The probability of stimulus policies in the fourth quarter is low.

Macro analyst Cinda Xie Yunliang's team released a research report stating that although the current recovery of the manufacturing industry is not as strong as market expectations, overall, the likelihood of further incremental stimulus policies being introduced in the fourth quarter of this year is small. This is mainly supported by two factors: on one hand, the pressure to stabilize growth in the fourth quarter is manageable. On the other hand, the phase one agreement reached in the China-US trade talks on tariffs has resulted in a marginal benefit to exports with the reduction of tariffs between the two countries. Based on this, the likelihood of further incremental stimulus policies being introduced in the fourth quarter of this year is small. The unexpected decline in the manufacturing industry's sentiment is mainly due to the production side. In October, the main drag on the decline in manufacturing sentiment came from the production side. Although in previous years, manufacturing production activities have been affected by the National Day holiday and the reduction in working days in October, the current decline in production may have exceeded the normal fluctuation range. We believe that the decline in production sentiment may be due to dual pressures: firstly, the short-term impact of a reduced number of working days due to the October holiday, and secondly, after the implementation of the anti-"involution" policy, some enterprises have actively adjusted their production capacity pace, further amplifying the decline in production sentiment. The rebound in the service industry supports the non-manufacturing sector, and although the construction industry is still in a contraction zone, there are signs of stabilization. In contrast to the decline in the manufacturing industry, sentiment in the non-manufacturing industry achieved an upturn in October, mainly driven by the recovery of the service industry. Although the construction industry is still in a contraction zone, signs of stabilization are emerging. The core factor constraining its recovery is still the weakness in real estate-related industries, but there is a trend towards a rebound in infrastructure investment activities. If the speed of subsequent infrastructure-related funding injections accelerates, the conversion of funds into physical work output is expected to further improve, providing stronger support for the recovery of the construction industry.