CSC Financial: After the holiday, the market is expected to usher in a recovery rally once short-term factors are digested.

CSC believes that the pre-holiday decline in A-shares was driven by a concentrated convergence of multiple short-term factors, and that after these short-term factors are digested post-holiday, the market is expected to see a recovery rally. In the short term, focus on earnings: A-shares enter a performance verification period in October; in the medium term, watch for policy: a new round of policy stimulus may be on the horizon; in the long term, pay attention to liquidity: the probability of a rate hike in October has fallen, but 30-year U.S. Treasury yields remain elevated. CSC expects that after the post-holiday recovery rally, A-shares will overall continue to trade in a range-bound pattern, and recommends maintaining a balanced allocation that is both offensive and defensive. On the offensive side: focus on AI computing power and innovative drugs. On the defensive side: use dividend sectors such as banks, non-bank financials, coal, and utilities as the base position.