To The Moon

Every long holiday closure of the A-share market creates an interesting "time-space dislocation."

While domestic investors step away from market fluctuations to rest and relax, overseas markets continue trading around the clock.

Even a brief closure gap of just a few days can often trigger subtle shifts in global capital sentiment and macroeconomic pricing logic, laying the groundwork for A-share trends after the holiday.

This year's National Day holiday was no exception.

During the seven days our market was closed, major overseas risk assets broadly recovered, with the technology sector performing especially well, and global risk appetite showed some repair.

Many investors reviewing the situation after the holiday cannot help but wonder: with warmth radiating from overseas markets and the widely discussed "Red October" cyclical pattern, could this October usher in a solid recovery rally?

During the National Day closure, global assets exhibited an overall pattern of "structural equity recovery, stabilizing commodity sentiment, and slight pullback in safe-haven assets," with market atmosphere improving somewhat compared to before the holiday.

Equity Markets: US Tech Leads, Asia-Pacific Recovers in Tandem

US equities were generally warm during the holiday with standout structural moves.

The Nasdaq Composite gained approximately 2.75% cumulatively during the holiday, refreshing its all-time closing high, as technology growth asset valuations continued to recover.

The S&P 500 strengthened in tandem, closing above 7,800 points during the holiday period.

The Philadelphia Semiconductor Index showed strong momentum, with the hardcore technology sector delivering relatively prominent profit-making effects.

The Dow Jones Industrial Average was comparatively lackluster, oscillating weakly overall, as market capital clearly tilted toward technology growth sectors.

Asia-Pacific markets followed the overseas recovery, with the Nikkei 225 trending upward in phases.

European markets showed relative divergence and overall pressure, with French equities adjusting slightly during the holiday, highlighting notable differences in regional market performance.

Bonds and Commodities: Rates Surge Higher, Safe-Haven Assets Pull Back

US Treasury yields rose sharply, with the 10-year yield breaking above 5.3%, hitting a new high since 2002, as global bond markets briefly experienced a selloff.

Suppressed by rising rates and a stronger dollar, gold came under pressure and pulled back during the holiday, with London spot gold briefly falling below the $4,100 mark on October 7, retreating about 11% since late August.

International oil prices surged then retreated amid geopolitical and supply-demand dynamics, with considerable volatility.

Overall, during the seven days of A-share closure, overseas markets did not experience a simple "sentiment recovery" but rather displayed a divergent pattern of "strong equities, weak bonds, and rising rates," adding an element of uncertainty to post-holiday market trends.

The overseas holiday period was not a one-sided recovery; behind it was the resonance of three key events.

Although these changes occurred abroad, they profoundly affect global liquidity, industry prosperity, and risk pricing, making them important external variables for assessing A-share trends in October.

First: US Jobs Data Weakens, Rate Expectations Ease at the Margin

The September US nonfarm payrolls data released during the holiday was an important catalyst: only 29,000 jobs were added for the month, far below market expectations of about 90,000, highlighting cooling signals in the job market.

After the data landed, market pricing for a Fed rate hike in October fell significantly, with the probability of holding rates steady rising to about 70%.

However, it is worth noting that the weak nonfarm data did not push down long-end rates — driven by rising inflation expectations, fiscal supply, and term premiums, the 10-year Treasury yield broke above 5.3%.

This means the transmission of "cooling employment leads to looser liquidity" has not materialized, and the suppression of high rates on A-share high-valuation sectors still exists.

Second: Tech Leaders Defy Gravity, AI Mainline Continues

The leading themes in US equities during the holiday were concentrated in hardcore technology sectors such as semiconductors, AI computing power, and optical communications, while traditional sectors performed modestly.

Behind this structural rally: first, the weak September nonfarm data reduced rate hike expectations and boosted risk appetite; second, AI leaders like Nvidia continued to strengthen — with an additional $150 billion buyback authorization, share prices hitting all-time highs, and a market cap of approximately $5.6 trillion, becoming an important force supporting the technology sector.

The long-term industrial logic of technology growth continues, but index highs are increasingly contributed by a handful of AI leaders while most individual stocks struggle to keep pace, with internal divergence becoming evident.

Third: International Oil Prices Stabilize, Inflation Expectations Level Off

Before the holiday, commodity volatility and recurring inflation were among the core concerns troubling the market, to some extent suppressing risk asset performance.

During the National Day holiday, however, international oil prices ended their previous sustained decline, gradually stabilizing and oscillating, with price fluctuation ranges narrowing noticeably.

Stabilizing oil prices help ease market concerns about a second wave of global inflation and reduce pressure on major economies to tighten monetary policy due to energy price increases.

At the macro level, the marginal pressure from inflation disruptions has eased somewhat, and the market has begun to reprice the potential for policy easing — a change that could further support the recovery rally in global equity assets.

With the overseas technology mainline recovering, the historical pattern of "Red October" has once again become a hot topic in the market.

Many investors treat it as superstition, but reviewing A-share history over many years reveals that October does indeed possess relatively clear cyclical characteristics, supported by multiple logics involving capital, policy, and earnings — though the strength of the rally varies significantly each year, and historical patterns are more about probability than certainty.

From the perspective of historical market patterns, the fourth quarter is often a key window for A-shares.

First, after the third quarter's volatile adjustment, market risks have been fully released, and existing capital on the sidelines before the holiday, along with dormant incremental capital, will likely gradually flow back in October, with market trading volume expected to improve at the margin.

Second, October each year is the concentrated disclosure period for A-share third-quarter reports, with listed company earnings landing in bulk, providing clear fundamental pricing references for the market and helping it identify core mainlines.

Third, the fourth quarter is often a window for pro-growth policies and industrial support policies to land, potentially providing phased support for the market.

However, two points require rational consideration: first, historical patterns are built on years of statistics and do not mean this year will necessarily replicate them — rally strength varies significantly each year, and patterns can only serve as reference rather than basis; second, this year's external environment is not a one-sided recovery but a divergent landscape of "strong technology mainline coexisting with elevated US Treasury yields," and the direction of external variables' transmission to A-shares still needs observation.

Taking into account multiple factors including overseas market changes, external environment divergence, and A-share fourth-quarter cyclical characteristics, we maintain cautious optimism about the October market while also urging investors to abandon extreme expectations and respond rationally to volatility.

First: Downplay Short-Term Sentiment, Avoid Chasing Rallies

The sentiment premium brought by overseas market performance after the long holiday may make A-shares open stronger in the short term, but short-term sentiment-driven gains are often accompanied by repeated fluctuations.

Investors are advised not to let short-term ups and downs dictate their judgment, not to blindly follow trends or chase highs, but to wait for reasonable positioning opportunities after market divergence, prioritizing control of volatility risk.

Second: Anchor to Fundamentals, Focus on Earnings Mainline

Current market trends increasingly depend on earnings delivery, and the sustainability of pure theme speculation is generally weak.

Fourth-quarter positioning can focus on aligning with third-quarter earnings guidance, paying attention to sectors such as AI and semiconductors where industry prosperity continues to rise and earnings are expected to land, while avoiding pure concept targets lacking fundamental support, using fundamentals to improve investment success rates.

Third: Maintain Balanced Allocation, Reasonably Manage Positions

Even if the market enters a recovery window, volatility and back-and-forth movement remain the norm for A-shares.

Investors are not advised to be overly aggressive or heavily bet on a single scenario.

Ordinary investors can continue the balanced allocation approach of "growth plus stability," reasonably managing overall positions, retaining ample liquidity, and using the stability of asset allocation to hedge against short-term market uncertainty.