CITIC Securities released a research report saying that the Federal Reserve is expected to raise interest rates by another 25 bps during the year, and may stay on hold next year. Financial conditions in the US are currently difficult to meaningfully ease, and in a growth narrative, we should look for assets that are supported by fundamentals rather than just benefit from liquidity. In terms of major asset classes, with the Federal Reserve facing the risk of continuing interest rate hikes, safe and deterministic assets such as Chinese bonds, commodities, and undervalued equity are more worthy of attention. On the A-share side, the release of the risk of interest rate hikes should be viewed as a buying point rather than a selling point. AI is still one of the few sectors that can resist rising interest rates, and continued upward interest rate expectations may increase K-type differentiation again. In terms of configuration, it is recommended to maintain an AI+ enabled structure. In terms of Hong Kong stocks, the relative yield advantage of high dividends has narrowed. In terms of allocation, cash flow stability, profit certainty, and dividend sustainability should be further examined, and attention should be paid to the segment direction where southbound positions are relatively high and marginal pricing power for foreign capital is relatively low. In terms of US stocks, if expectations of a further appreciation of the yen against the US dollar arise, US technology stocks may face greater pressure. It is recommended to focus on the military, energy, and financial sectors of US stocks. In the medium to long term, the combination of “fiscal contraction+low inflation+steady growth” is expected to lower long-term interest rates and push US stocks back to the “valuation+profit” double-hit market.

CITIC Securities released a research report saying that the Federal Reserve is expected to raise interest rates by another 25 bps during the year, and may stay on hold next year. Financial conditions in the US are currently difficult to meaningfully ease, and in a growth narrative, we should look for assets that are supported by fundamentals rather than just benefit from liquidity. In terms of major asset classes, with the Federal Reserve facing the risk of continuing interest rate hikes, safe and deterministic assets such as Chinese bonds, commodities, and undervalued equity are more worthy of attention. On the A-share side, the release of the risk of interest rate hikes should be viewed as a buying point rather than a selling point. AI is still one of the few sectors that can resist rising interest rates, and continued upward interest rate expectations may increase K-type differentiation again. In terms of configuration, it is recommended to maintain an AI+ enabled structure. In terms of Hong Kong stocks, the relative yield advantage of high dividends has narrowed. In terms of allocation, cash flow stability, profit certainty, and dividend sustainability should be further examined, and attention should be paid to the segment direction where southbound positions are relatively high and marginal pricing power for foreign capital is relatively low. In terms of US stocks, if expectations of a further appreciation of the yen against the US dollar arise, US technology stocks may face greater pressure. It is recommended to focus on the military, energy, and financial sectors of US stocks. In the medium to long term, the combination of “fiscal contraction+low inflation+steady growth” is expected to lower long-term interest rates and push US stocks back to the “valuation+profit” double-hit market.