Guolian Minsheng: What core variables during the Spring Festival holiday are worth paying attention to?

Guolian Minsheng released a research report stating that during last year's Spring Festival, AI and tariffs were two important themes. DeepSeek emerged and challenged the US exceptionalism, leading to Hong Kong stocks outperforming globally while US technology stocks faced significant pressure. The implementation of US tariffs on China and Mexico further boosted the US dollar and precious metals. During this year's Spring Festival holiday period, the development of the AI industry remains an important theme, and the technology market is expected to continue, with Hong Kong stocks having room for recovery. However, investors should also be cautious of potential disruptions due to tightening short-term liquidity expectations and geopolitical risks fermenting. Guolian Minsheng's key points are as follows: As the Spring Festival approaches and the domestic market is closed, what new narratives will emerge in the overseas markets that could impact the capital market trends after the holiday? Last year, AI and tariffs were two important themes, with DeepSeek challenging US exceptionalism and leading Hong Kong stocks to outperform globally, while US technology stocks faced pressure. The implementation of US tariffs on China and Mexico further boosted the US dollar and precious metals. Thus, during this year's Spring Festival holiday period, what core variables are worth paying attention to? The development of the AI industry remains an important theme during the holidays, and the technology market is expected to continue, with Hong Kong stocks having room for recovery. However, investors should also be alert to potential disruptions caused by tightening short-term liquidity expectations and fermenting geopolitical risks. Will this year's "Tech Spring Festival" ignite the technology market again? Last year, the launch of DeepSeek and the driving of the AI industry chain by the Siasun Robot & Automation sector led to a valuation restructuring, leaving a lasting impact on the technology market. Similarly, the catalytic effect of AI during this year's Spring Festival continues, with large models like ByteDance 2.0 and Alibaba's Qwen 3.0 being widely implemented. Although replicating last year's groundbreaking trend may be difficult, there is still potential for the market to provide trading opportunities. Nvidia's performance and future guidance during the Spring Festival will be important references for industry development expectations and risk preferences. In line with this, the Hong Kong technology sector is expected to benefit from a dual resonance of capital and technology market opportunities, leading to a period of recovery. The Hong Kong technology sector's previous performance has been somewhat weak, deviating from the overall trend of the global technology sector's rebound. This situation has partly been influenced by the restraint of liquidity tightening expectations from the US Federal Reserve and the diversion of funds due to the A-share fund siphon effect. However, historically, with A-share trading halted, Hong Kong stocks often experience strong upward momentum during the Spring Festival holiday period. Coupled with the catalytic effect of the current technology market and the inflow of funds facilitated by the strong appreciation of the RMB, Hong Kong technology stocks, as an undervalued sector of the global technology market, are expected to rebound during the Spring Festival holiday. However, investors should also pay close attention to market risks during the holiday period, particularly regarding potential disruptions from tightening liquidity expectations and geopolitical risks, which may be relatively controllable: On one hand, investors should be wary of liquidity tightening expectations triggered by disturbances in overseas macroeconomic data. Around the Spring Festival, the US will release key macroeconomic data such as CPI and GDP, and the potential statements of the new Federal Reserve Chairman nominee, Mr. Powell, will also be a focus for the market. In terms of economic fundamentals, the US will face a series of tests in the coming week. Particularly, there is a possibility of an increase in CPI and GDP growth rates. The recent significant increase in non-farm payrolls in the US in January has taken the first step towards delaying rate cuts. Against the backdrop of enterprises adjusting prices at the beginning of the year, tariff costs may further transmit to the end consumer, leading to a noticeable increase in the US retail price index in January, potentially accelerating inflation on a month-by-month basis. Based on the latest GDPnow forecast, despite the political shutdown disturbances, the US GDP growth rate for the fourth quarter still has the potential to reach a high level of 3.7%. The consecutive improvement in macroeconomic data may slightly weaken market expectations of rate cuts, creating some negative disturbances for the equity market. However, the overall impact is expected to be limited: on one hand, the market has fully priced in the expectation of the Federal Reserve temporarily delaying rate cuts in the first half of the year, and the macroeconomic data only serves as further confirmation for the Fed to "hold steady" on interest rates; on the other hand, the shining data cannot hide the underlying fragility of the US economy - with a downward revision of nearly 900,000 jobs in the employment market and an increasingly severe trend of economic "K-shaped differentiation", the recovery foundation is not solid. On the policy front, while Mr. Powell's statements as the nominee for the new Federal Reserve Chairman have garnered market attention, his policy stance has already been fully priced in. On one hand, Mr. Powell's short-term statements have mostly been transitional and difficult to change the established policy framework and pace of rate cuts by the Fed; on the other hand, the market has largely priced in the policy guidance of around two rate cuts this year, combined with banks holding low reserves and the lack of immediate implementation space for balance sheet reduction, making it difficult for expectations of liquidity to drastically shift. Considering that the current money market financing rates are low, and the gradual release of funds from the TGA account after February, overall liquidity in the US is expected to remain relatively abundant. On the other hand, the biggest risk during the holiday period may still be the escalation of geopolitical events, especially in relation to the situation in Iran. Recently, the recovery of gold and oil prices has become more prominent, with oil prices briefly climbing to $70 per barrel, reflecting to some extent the potential disturbances in the geopolitical situation. As President Trump takes a tougher stance on the Iran issue and openly states that if negotiations fail with Iran, he may send another aircraft carrier strike group to the Middle East as a prelude to potential military action, this continuation of his consistent high-pressure approach may further exacerbate geopolitical tensions. Additionally, negotiations on the Russia-Ukraine conflict could also be a variable. However, looking at the end result, combining President Trump's approach and the timing of policy implementation, it is likely that his statements will continue to exhibit the characteristic of "loud thunder, small rain" - as seen in his earlier high-profile stance on the Greenland issue without any substantive progress, this characteristic is likely to continue. Therefore, if geopolitical risks escalate rapidly in the short term and result in a significant market downturn, it may actually present a short-term trading opportunity. Risk Warning: Significant changes in US trade policies; unforeseen spread of tariffs leading to a greater-than-expected global economic slowdown and increased market adjustments; frequent geopolitical factors leading to increased volatility in global assets.