Tianfeng Securities' latest research indicates that the market performance at the beginning of 2026 is breaking traditional historical patterns. So far in 2026, China's capital markets have exhibited a pronounced divergence between stocks and bonds. The Shanghai Composite Index has achieved a remarkable 16 consecutive days of gains, reclaiming the 4,100-point level for the first time in a decade, while the bond market has experienced an "inverted V-shaped" trajectory of initial decline followed by a recovery. As we approach the critical juncture of the Spring Festival, historical data suggests that the A-share market typically transitions from volatility to an upward trend post-holiday, with market styles shifting from the pre-holiday large-cap defensive bias towards a post-holiday small-cap growth orientation.
The report highlights that for investors, this year's market environment presents three distinct characteristics that deviate from historical norms: Firstly, underpinned by policy expectations for the start of the "16th Five-Year Plan" period, prospects for global liquidity easing, and a sustained reallocation of household assets towards equity markets, the foundation for this year's "Spring Frenzy" rally is more solid than in previous years, potentially reinforcing the pattern of post-holiday market gains.
Secondly, following the People's Bank of China's (PBOC) targeted interest rate cut of 0.25 percentage points in January, the immediate necessity for broad-based monetary easing has diminished. Coupled with an anticipated acceleration in local government bond issuance after the holiday, the bond market is expected to enter a phase of range-bound fluctuation.
Finally, regarding market style, Tianfeng Securities believes that a straightforward style rotation post-holiday is unlikely. Instead, the market is more probable to enter a complex stage of interplay where growth and high-dividend (hongli) styles coexist, driven by multiple competing investment logics.
The current market landscape is characterized by exuberance above 4,100 points for equities and an "inverted V" reversal in bonds. The first month of the year displayed typical structural divergence and liquidity rebalancing. Supported by ample liquidity, the equity market underwent a rapid recovery, with the Shanghai Composite Index achieving a continuous rally past the 4,100-point mark, and single-day trading volume once exceeding 3 trillion yuan. Although the index subsequently entered a consolidation phase, small and mid-cap stocks, along with technology and growth-oriented sectors, remained the primary structural trends.
The bond market experienced阶段性 pressure during this period. Influenced by capital outflows to the活跃 equity market and expectations of increased government bond supply, the yield on the 10-year government bond briefly rose to 1.9%, while the 30-year yield surpassed 2.3%. Subsequently, the central bank announced a targeted interest rate cut of 0.25 percentage points, and as配置 demand gradually emerged, market sentiment stabilized. By month-end, the 10-year bond yield had retreated to around 1.8%. This pattern suggests that 1.9% has become a key resistance level for yield increases, and the timely policy response further solidified expectations of a maintained稳健偏松 (stable-to-loose) liquidity environment.
Historical patterns reveal a distinct stock-bond rotation around the Spring Festival period. Reviewing data from the past decade (2015-2025), the A-share market exhibits clear seasonal patterns around the Lunar New Year. In the 30 days preceding the holiday, the market generally trends sideways. The CSI 300 Index had a 63.64% probability of rising, with an average gain near breakeven, whereas the CSI 1000 Index had a significantly weaker showing with only a 27.27% probability of increase, indicating relative outperformance by large-cap stocks. Correspondingly, defensive sectors like banking and food & beverage tended to have higher win rates before the holiday.
In the 30 days following the Spring Festival, the market typically welcomes the "Spring Frenzy" rally. The probability of the CSI 300 Index rising increases to 72.73%, with an average gain of 3.15%; the performance of the CSI 1000 Index is even more pronounced, boasting an 81.82% probability of increase and an average surge of 8.71%, clearly demonstrating the dominance of small-cap growth styles. Sectors such as TMT (Technology, Media, Telecom) and advanced manufacturing are particularly active during this post-holiday period.
Historical data shows that a style shift occurred in 81.82% of the years observed within the 30-day windows around the Spring Festival, underscoring a clear rotational pattern from pre-holiday defense to post-holiday offense.
The bond market also displays明显的 cyclical characteristics around the Spring Festival. In the 30 days before the holiday, the market typically performs strongly, primarily benefiting from the central bank's enhanced open market operations to ensure liquidity stability and robust investment demand from配置 institutions like banks and insurance companies. Historical data indicates that during this period, the 1-year government bond yield fell by an average of 5.73 basis points (bps), while the 10-year yield also experienced an average decline of 0.43 bps.
Entering the 30 days post-holiday, the bond market often faces some adjustment pressure. Influenced by shifting policy expectations, increased bond supply, and the "seesaw effect" between stock and bond markets, the 10-year government bond yield has historically risen by an average of 1.03 bps, and the 30-year yield by an average of 1.13 bps. This reflects a significant shift in the bond market's trading logic around the holiday: the focus transitions from "liquidity and certainty" before the holiday to a博弈 centered on "economic growth and risk appetite" afterward.
The timing of the Spring Festival on the calendar has a notable statistical impact on short-term market performance. Based on a review of markets from 2015 to 2025, asset price movements around the holiday follow discernible patterns. With the 2026 Spring Festival falling relatively late (in mid-to-late February), this characteristic might amplify the probability of certain signals from historical patterns materializing.
For equities, in typical years, the market tends to be volatile before the holiday (reflecting a "hold cash for the holiday" mentality), with the "Spring Frenzy" rally gradually starting afterward. However, in years when the Spring Festival occurs later (e.g., 2015, 2018, 2021, 2024), the probability of the CSI 300 Index rising pre-holiday was as high as 75%, significantly above the average of 63.64% across all years, indicating stronger willingness among investors to position early.
For bonds, the pre-holiday period usually sees stronger bond prices due to a generally宽松 liquidity environment; post-holiday, yields tend to face upward pressure alongside improving economic expectations. In years with a later Spring Festival, the probability of the 10-year government bond yield falling before the holiday also reached 75%.
Overall, in "late Spring Festival" years, the probability of both stock and bond markets strengthening simultaneously before the holiday is relatively high (around 75%). This statistical feature warrants close attention when assessing the market rhythm at the start of 2026.
Looking ahead to 2026, the themes are the potential continuation of the "frenzy" and a reconfiguration of market styles. The foundation for the "Spring Frenzy" equity rally appears more robust. Factors such as policy expectations for the start of the "16th Five-Year Plan," the prospect of global liquidity easing, and the trend of household funds flowing into equity assets could all reinforce the pattern of post-holiday market gains. Significant growth in non-bank deposits, combined with a clear AI industry theme, suggests this year's "Spring Frenzy" might be more sustained.
Furthermore, the consumption and travel-related rally might be both earlier and stronger. Influenced by the "historically long nine-day Spring Festival holiday," the release of consumer demand has been noticeably earlier than in previous years. In 2026, the average decision-making time for consumers purchasing Spring Festival travel products was 7-10 days ahead of the same period in 2025. Travel and consumption scales are expected to reach new highs, stabilizing market expectations for a robust start to the year economically.
Conversely, the pattern of range-bound fluctuation in the bond market might be reinforced. After January's targeted PBOC rate cut, the immediate need for a broad-based reduction has decreased. If pre-holiday speculation about宽松 liquidity leads to a bond market recovery, the probability of a yield rebound post-holiday could increase, accompanied by accelerated local government bond issuance and rising policy expectations.
Conversely, some historical patterns might be broken. The traditional pre-holiday pattern of "strong bonds, weak stocks" could be disrupted this year. With strong and提前 expectations for a stock market "Spring Frenzy," the pre-holiday market might not solely exhibit a risk-off mode but could instead feature a scenario where both stocks and bonds find support, leading to intensified博弈.
Additionally, the typical post-holiday stock market style rotation might weaken. Historically, small-cap growth stocks tend to outperform after the holiday. However, this pattern could be tempered by two factors in 2026: firstly, large-cap growth stocks might also strengthen concurrently, given the confirmed robust景气度 of thematic trends like AI; secondly, the配置 logic for "high-dividend" assets as long-term portfolio anchors remains solid. Consequently, the post-holiday style dynamic might involve a "dance between growth and dividends" rather than a simple, complete switch.
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