Get ready for Monday's market open as the weekend brought a whirlwind of events, from a viral movie to key economic data releases. Here's a recap of the major headlines and the latest insights from top brokerage analysts.
The abstract film "Bull Run" has become an internet sensation over the weekend, with its cumulative box office now exceeding 6 million yuan. As the film trended on social media, several A-share companies with "bull" in their names were branded by investors as related concepts. By the afternoon of August 16, three of the top ten stocks on the Flush heat list were named after the animal: Jinniu Chemical, Bull Group, and Tonbull Information. Discussions in their stock forums have increasingly referenced the film and the idea of "a bull market." However, investors are cautioned about the speculative risks involved, as a film's popularity does not equate to a company's investment thesis, and stock prices ultimately depend on performance and fundamentals.
China's July financial data was released by the central bank, showing that social financing aggregate expansion for the first seven months totaled 22.25 trillion yuan, a decrease of 1.74 trillion yuan year-on-year. RMB loans increased by 10.38 trillion yuan, and deposits grew by 17.79 trillion yuan. The broad money supply (M2) stood at 355.51 trillion yuan, up 7.7% year-on-year.
US retail sales unexpectedly fell 0.6% month-on-month in July, against a forecast of 0.1% growth. Following the disappointing data, traders reduced their bets on the Federal Reserve raising interest rates more than once by mid-2027.
Guangdong Province launched its first specialized financial product for the token economy, "Token Loan," in Guangzhou's Haizhu District. The Bank of China branch in Guangzhou has developed a tailored financing product for small and micro-sized computing power enterprises in the area, which provides loans based on contracts or token consumption limits. It offers credit, accounts receivable pledge, and order financing as primary guarantee methods. The bank has already issued trial loans totaling 28 million yuan.
Four central government departments announced a tax policy for integrated circuit and industrial machine tool enterprises regarding non-monetary asset exchanges. The policy allows gains from such exchanges, occurring between January 1, 2026, and December 31, 2028, to be evenly spread over a period of up to five years for corporate income tax purposes. Losses from these exchanges cannot be deferred and must be recognized immediately.
Kweichow Moutai reported a 1.95% decline in first-half net profit. In its 2026 semi-annual report, the company posted total operating revenue of 92.278 billion yuan, up 1.3% year-on-year, with net profit attributable to shareholders at 44.517 billion yuan, down 1.95%. The revenue increase was attributed to higher sales volumes.
NVIDIA has quietly reduced its financial guarantee for an OpenAI data center project in Ohio from $250 billion to less than $120 billion. The reduced guarantee now only covers the first phase of the project, which involves about 5 gigawatts of computing power. This adjustment is a response to investor concerns about NVIDIA's risk exposure, as it uses its balance sheet to boost demand for its AI chips.
Where to begin
CITIC Securities advises investors to return to normal expectations. They categorize the market into three performance clues: the North American AI chain, non-US market exports, and domestic demand. For the AI chain, recent rally potential has diminished, and new narratives are needed. Non-US market exports face headwinds from ongoing trade disputes and potential forex losses, while domestic demand, particularly in computing power, shows relative strength but faces valuation constraints. The overall market opportunity will likely shift to valuation recovery for stocks with solid earnings, setting the stage for medium-term stability.
CSC Financial questions why A-share tech stocks are recovering slower than their overseas counterparts. They note that after global tech deleveraging ended in late July, overseas tech stocks rebounded on macro easing and industry fundamentals. A-share tech recovery is slower due to past congestion and leverage pressures, not a change in the industrial trend. The current market structure affects rhythm, but medium-term direction is still determined by earnings. They recommend focusing on core assets with high fundamental certainty, such as optical communications, servers, and innovative drugs.
Shenwan Hongyuan suggests that a rebound can continue after digesting micro-structure issues. They argue that for AI stocks to reach new highs, they need fundamental expectations to surpass late June levels. Currently, there is no catalyst for the AI chain to return to previous highs. Without a major industry catalyst, the adjustment and oscillation period may extend, potentially delaying any new highs until September. Investors should moderate their expectations for the pace of tech recovery.
Huaan Securities sees the market in a rebound period, with tech stocks continuing to lead. The overseas impact from Fed rate cut expectations is fading, and geopolitical risks are easing. Domestically, the market is entering the mid-report earnings season, where high tech growth will be validated. The AI chain, especially upstream and midstream sectors, is identified as the best choice amid the rebound. Other related sectors like machinery, robotics, and software also warrant attention.
Goldman Sachs notes that the market's liquidity-driven momentum has weakened, and AI and physical assets are now entering a plateau. The advantage for AI remains its current high growth, but risks are mounting. If the debt-to-income ratio for AI companies continues to rise, it will constrain the financing capacity of cloud and large model companies. As the US and non-US economies converge, a scenario similar to late 2025 and early 2026 may re-emerge, where AI leverage rises and real yields fall, potentially boosting the elasticity of physical assets.
China Merchants Securities observes that the market has shifted from rapid rebound to consolidation, driven by the Fed's rate cut expectations and liquidity trading. The systemic recovery from macro and micro liquidity improvements may be ending. The upcoming earnings season will shift focus to structural opportunities based on earnings. They recommend a balanced allocation across three lines: tech innovation, corporate overseas expansion, and revaluation of traditional low-valuation stocks, focusing on electronics, power equipment, and chemicals.
BOC International believes that hard tech is transitioning from a rebound to a reversal. The mid-August earnings season will be a key inflection point. If core tracks like computing power, storage, and optical modules can deliver strong earnings and order evidence, the hard tech rally could solidify into a major trend. The semi-annual report previews are encouraging, with electronics and communications showing strong profit growth. The relative performance advantage of hard tech over other sectors, such as consumer staples, could become more prominent.
Soochow Securities outlines three missing pieces for a major market trend restart: resolving the overhang of trapped and profit-taking positions near the yearly moving average, easing global long-term bond yields under fiscal and policy uncertainty, and industry evidence that the AI industry is expanding. Until these pieces are in place, the market will likely remain in a rotation pattern. Within tech hardware, they suggest focusing on themes like volume growth, supply-constrained price hikes, and earnings upgrades during the reporting season.
Everbright Securities expects the market to continue its volatile recovery, supported by improved domestic and overseas liquidity. Margin balances have fallen from highs, market turnover has eased, and US inflation data reduces worries about global liquidity tightening. This creates a favorable environment for growth stocks and capital inflows.
Industrial Securities highlights that the recent market breadth improvement is not just about luck, but a return to a focus on earnings fundamentals. The recovery is driven by sectors with strong earnings, which are the core of the market's trading. The current divergence in earnings does not support a broad-based recovery. The upcoming earnings season will be a key validation of the earnings divergence between sectors.
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