**Core Views** This year, overseas macro events have significantly driven market movements, with increasing spillover effects on domestic markets. The scope of influence has expanded from primarily economic drivers to multiple channels, including geopolitics, AI industry trends, and global liquidity. Looking ahead, four key pathways of overseas impact on domestic markets warrant close attention in the coming year: external demand affecting profit expectations, AI chains sustaining market hotspots, reduced geopolitical risks, and favorable overseas liquidity and RMB appreciation for domestic assets.
**Key Themes: Four Pathways of Overseas Impact** 1. **External Demand Supports Domestic Economy** Despite tariff pressures, China’s export growth has remained resilient, supported by overseas fiscal expansion and a recovering manufacturing cycle. Structurally, exports to Africa and ASEAN have offset declines in U.S.-bound shipments. Globally, demand for capital goods (e.g., machinery) and commodities (e.g., non-ferrous metals) remains strong due to supply chain diversification and AI-driven energy infrastructure investments.
2. **Geopolitical Risks Moderate** Short-term market risk appetite has stabilized as China demonstrates strategic resilience against trade frictions. While U.S. tariff policies may see reduced focus ahead of midterm elections, long-term global supply chain restructuring and de-dollarization trends persist. Strategic allocations in scarce resources, capital goods, and self-sufficient supply chains (e.g., semiconductors, rare earths) remain valuable.
3. **AI-Driven Market Dynamics** The AI wave has spurred domestic market activity, with hardware (e.g., computing power) driving profits and applications lifting valuations. However, concerns over AI bubble risks highlight the importance of earnings realization. Upstream energy infrastructure (e.g., power equipment, copper) and labor market shifts due to AI adoption are emerging as secondary effects.
4. **Favorable Liquidity and RMB Appreciation** Fed rate cuts and narrowing China-U.S. yield spreads support RMB appreciation, benefiting domestic assets. Trade surpluses and corporate FX settlements further bolster RMB stability. While港股 faces short-term liquidity pressures from南向资金 slowdowns and外资观望, structural opportunities outweigh index performance.
**Market Assessment** Domestically, November data showed recovering external demand but weak domestic consumption. Overseas, the Fed’s dovish pivot and unexpected balance sheet expansion contrast with mixed U.S. labor data (rising unemployment despite strong job gains).
**Policy Outlook** - **Monetary Policy**: A reserve requirement ratio (RRR) cut is likely before the Lunar New Year, while rate cuts await stronger triggers. - **Fiscal Policy**: The 2025 Central Economic Work Conference emphasized maintaining fiscal deficits and debt levels, though market expectations remain muted.
**Investment Recommendations** - **Domestic Bonds**: Short-duration credit bonds and 5–7Y government bonds are preferred amid steepening yield curves. - **Domestic Stocks**: Tech growth (e.g., AI, robotics) and export-oriented sectors lead, while cyclical plays hinge on pricing power. - **U.S. Assets**: Balanced exposure to small caps and traditional sectors (e.g., consumer, banks) as Fed easing progresses. - **Commodities**: Copper and gold remain bullish, while oil faces oversupply pressures.
**Risks** 1. U.S. inflation reacceleration prompting aggressive Fed hikes. 2. Escalating geopolitical tensions.
**Upcoming Data to Watch** - **Domestic**: 1-year LPR (Dec 22). - **Overseas**: U.S. CPI (Nov), initial jobless claims (Dec 13).
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