Brokerage Morning Meeting Highlights | The odds of positioning before the holiday have improved.

Last Thursday, the market fluctuated and adjusted throughout the day, with all three major indices opening lower and moving lower. The combined turnover of the Shanghai and Shenzhen stock markets was 1.65 trillion yuan. More than 4,300 stocks across the market declined. On the board, concepts such as Fujian local stocks, Siasun Robot&Automation, wind power, and VNA instruments were active. On the decline side, concepts such as real estate and PCB weakened. As of the close, the Shanghai Composite Index fell 1.22%, the Shenzhen Component Index fell 2.34%, and the ChiNext Index fell 2.68%. Huatai believes that the odds of positioning before the holiday have improved; CITIC SEC believes that the "politicization" of data centers may be the biggest obstacle to the short-term AI narrative; Zhongtai believes that technology has become the final deciding factor. Huatai: The odds of positioning before the holiday have improved. Currently, A-shares may be in a stage of consolidation and repair. Considering that the earlier adjustment has already released a significant amount of valuation and trading risk, and that historical patterns show a relatively high probability of recovery after a pre-holiday pullback once the market reopens, the odds of holding stocks through the holiday have improved this time. However, because U.S. employment, PMI, and other data may be released in a concentrated manner during the holiday, the focus of allocation may need to shift toward areas with higher earnings certainty and relatively fully digested valuations: 1) Within technology, prioritize optical communications, PCB, and some leading domestic computing power names with relatively fully digested valuations and higher earnings visibility, and reduce exposure to names facing earnings downgrades and pure theme plays; 2) At the same time, pay attention to the chemicals and papermaking chains, which have relatively low allocation and improving price spreads, using dividend assets as a stabilizer for the portfolio. Before the holiday, it is advisable to retain core positions with strong fundamentals and appropriately compress high-volatility trading positions. The importance of the shareholding structure is higher than that of the total position. CITIC SEC: The "politicization" of data centers may be the biggest obstacle to the short-term AI narrative. U.S. Treasury yields have surged again, and at the same time credit spreads on U.S. corporate bonds rated B and below have also begun to rebound. The simultaneous rise in the risk-free rate and credit spreads has once again led some investors to worry about the sustainability of U.S. AI financing. The financing of U.S. AI companies is relatively diversified. In addition to debt financing, they can support future CAPEX funding through equity financing, industrial capital, and reduced share buybacks. The U.S. state of Texas halted data center construction, and Oracle also issued a force majeure notice to the developer of Project Jupiter. The development of these two situations shows that data center construction will be one of the most important directions of bipartisan contention around the U.S. midterm elections. If the Democratic Party wins the House of Representatives, it may push data center-related issues to receive greater congressional attention and extend the realization cycle of projects from planning to production, thereby increasing the risk of delayed computing power delivery faced by hyperscalers that have already made commercial commitments. Zhongtai: Technology has become the final deciding factor. There is very little time left before the end of the year. Both absolute-return and relative-return funds are facing the problem of an "asset shortage." Technology has become the final deciding factor, and only by "taking the first step" can one seize the initiative. In the past two trading days, the external shocks and rate hike disturbances priced in advance, along with the adjustment brought by cashing in on sectors with prior floating profits, have provided a rare window for buying technology again. While the low-lying areas in non-technology sectors are becoming fewer and fewer, more cost-effective sub-sectors are emerging within technology. Valuations in directions such as storage, semiconductors, and semiconductor materials are still at low levels, and demand has not weakened significantly; although some AI hardware directions have already recovered, there is still room for further valuation repair. This article is reprinted from "Cailian Press". GMTEight editor: Jiang Yuanhua.