On the previous trading day (October 30), the Shanghai Composite Index fell 1.44% to 3599.02 points, the Shenzhen Component Index dropped 2.73% to 10833.78 points, and the ChiNext Index plunged 4.13% to 2413.63 points; combined turnover across the two markets reached 1,674.468 billion yuan; 892 stocks advanced, 4,602 declined, and 83 were unchanged, with 45 hitting the daily limit up and 11 hitting the limit down. Guotai Haitong believes the Federal Reserve's "hawkish pause" in October will likely be followed by another 25bp rate hike in December; Guotou Securities notes that last week's "failed rebound" and fully bearish moving average alignment mean selling pressure has not truly been cleared; CITIC Securities suggests four allocation approaches, including steady returns and expectation-driven plays, to navigate the current market; Zhongtai Securities argues the October PMI decline is in line with seasonality, and fiscal strengthening has yet to translate into real work volume; Huafu Securities expects the November Shenzhen APEC meeting to advance the implementation of China-US economic and trade arrangements.
Guotai Haitong: Macro | Fed's "Hawkish Pause," Rate Hikes May Continue Within the Year
We expect that after the Fed's short-term pause, it will most likely continue raising rates in December. The Fed's decision to "stay put" in October is, in our view, a short-term "hawkish pause." The reasons for pausing are threefold: first, the Fed believes short-term financial conditions have already tightened; second, the Fed faces a balance between the economy and inflation, with recent employment data having weakened; third, energy prices are a fast-moving variable, requiring the Fed to remain flexible. We expect a 25bp hike in December is highly probable. On one hand, the US federal funds rate futures market currently prices in about an 80% probability of a December hike; on the other hand, short-term shocks to inflation from both supply and demand sides (energy and AI demand, etc.) show no signs of reversing, making a smooth near-term disinflation difficult, likely still requiring rate hikes to combat inflation. However, there remains significant uncertainty over Fed monetary policy in 2027. We believe that if geopolitical tensions ease and a divided government emerges after the midterm elections, a turning point for a liquidity reversal may arrive.
Guotou Securities: Quantitative | Failed Rebound, Awaiting a Turning Point
Last week, A-shares followed a "failed rebound" script: early in the week, volumes shrank with slow declines; on Wednesday, a large volume reversal briefly suggested stabilization; but on Thursday and Friday, consecutive broad-based sell-offs on heavy volume gave back all the recovery gains. Across the week, none of the nine major broad-based indices closed higher — the Shanghai Composite lost the 3600 mark, the ChiNext Index fell 10.08%, and the STAR 50 plunged 13.72%; only the SSE 50 edged down 0.56%, with dividend and heavyweight stocks serving as the sole safe haven. Technically, the moving average systems of all nine broad-based indices remain in fully bearish alignment, and some indices even generated stop-loss signals on Friday, implying current selling pressure may not have truly been flushed out. In terms of oversold levels, the low-frequency and ultra-low-frequency thermometers for mainstream broad-based indices have all fallen below 10, with the high-frequency thermometer at just 13, hovering near freezing point. In other words, the potential for an oversold rebound is building, but a trend reversal remains distant. Last week's style divergence was pushed to an extreme: on one side, banks, coal, and oil & petrochemicals stood firm as the three main pillars; on the other, the hard-tech chains on the STAR Market and ChiNext were squeezed from both directions by overseas long-end rates and shifting narratives around AI fundamentals. Facts show that current technical conditions at the oversold level provide little momentum for the market to reverse its own trend; beyond waiting for the unfavorable chip structure to digest over time, the truly anticipated medium- to long-term turning point may still lie in fundamentals.
CITIC Securities: Strategy | Actively Adjust Structure, Four Allocation Approaches
We propose four allocation approaches to navigate the current market. First, a steady return strategy, centered on high-dividend industries or those with supply-clearing potential, focusing on supply changes when demand signals are chaotic. Second, an expectation-driven strategy, similar to "airlines and hotels in 2022," identifying sectors where the market is unanimously bearish on fundamentals and positioning is extremely low, then realizing gains when final policy changes occur, purely as a valuation-repair play. Third, an overseas rate decline strategy, taking the correction of North American AI investment and financing expectations and the corresponding decline in overseas long-end rates as the macro premise, and after the market revises EPS expectations, watching whether non-AI manufacturing overseas expansion and resource stocks can emerge from short-term demand suppression. Fourth, a track heat plus chip clearing strategy, similar to finding "residential energy storage and inverters in 2022," using the unexpected surge in new-area demand as the timing to bottom-fish tech, seeking areas where institutions and active capital can resonate, rather than simply betting on "inorganic" themes. We believe all four strategies have the potential to generate relative returns and suit funds with different return-risk preferences; the market's capital supply pressure determines which strategy prevails at any given stage.
Zhongtai Securities: Macro | Fiscal Strengthening in Place, When Will Infrastructure Accelerate?
In October 2026, China's official manufacturing PMI was 49.3%, down from 50.1%; the non-manufacturing PMI was 49.7%, down from 50.2%; and the composite PMI was 49.7%, down from 50.7%. The October 2026 official manufacturing PMI decline was largely affected by seasonal factors such as the National Day holiday. Historically, except for 2024, the October manufacturing PMI in 2022, 2023, and 2025 fell by an average of 0.8 percentage points from September of the same year; this October's decline matched that pace, consistent with seasonal patterns. First, domestic and external demand slowed in tandem, but structural highlights stood out. The October official manufacturing PMI new orders index fell 1.1 percentage points from September to 49.4%, and the new export orders index fell 1.3 percentage points to 48.7%, both dropping below the boom-or-bust line. Meanwhile, new growth drivers represented by equipment manufacturing and high-tech manufacturing continued to expand, mainly driven by robust AI capital expenditure demand at home and abroad and the intensive launch of domestic "six networks" projects. In October, the PMI new orders index for the computer, communications, and electronic equipment industry stood above 53%; the equipment manufacturing PMI new orders index rose 1 percentage point from September to above 51%; and the high-tech manufacturing PMI new orders index remained in expansion territory. The construction PMI fell 2.3 percentage points to 48.0%. Among them, the civil engineering construction PMI rebounded from September but remained below 50%. Since October, the Ministry of Finance arranged the use of 550 billion yuan of local government balance limits to supplement local fiscal capacity; the 800 billion yuan new policy-based financial instrument was also fully deployed by October 28. The use of these funds narrowed the decline in the civil engineering construction PMI. However, judging from the construction PMI trend, it still takes time for broad fiscal strengthening to translate into real work volume. Overall, most indicators of the October 2026 official PMI retreated from the previous month, but structural highlights were prominent, with new growth drivers showing strong production and demand. After the package of policies landed since late September, whether broad fiscal strengthening can accelerate the formation of real work volume is an important variable affecting domestic demand. We believe that as stabilizing growth carries greater weight among policy objectives, related deployments are expected to accelerate, and infrastructure's contribution to the economy is gradually rising.
Huafu Securities: International Relations & Policy | What to Expect from the Shenzhen APEC?
The 33rd APEC Economic Leaders' Meeting will be held in Shenzhen from November 18 to 19, 2026, drawing widespread attention from global capital markets, with interactions among Chinese, US, and Russian leaders and progress in regional economic and trade cooperation as key observation points. This article reviews APEC's development history and focuses on the implementation of existing China-US economic and trade consensus, trilateral diplomatic contacts among China, Russia, and the US, and possible progress in Asia-Pacific free trade area cooperation. On trade, the implementation of tariff and related restrictive measure suspension arrangements, tariff reductions on non-sensitive goods, and the advancement of agricultural product and Boeing aircraft purchases are worth watching. On critical minerals, the two sides may form more specific arrangements around export license approval efficiency, license validity periods, and supply guarantees for eligible enterprises. On artificial intelligence, AI risk management is also expected to further clarify liaison channels, incident notification, and regular consultation mechanisms. 2026 marks the 20th anniversary of APEC members agreeing to study the long-term prospects of an Asia-Pacific free trade area; the Shenzhen APEC summit is expected to further clarify the direction of regional cooperation and promote rule comparison and policy coordination among existing free trade arrangements, with specific progress focusing on trade digitalization, services regulatory cooperation, and customs facilitation.
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