CSC Financial says A-share margin financing and ETF flows are offsetting;
deleveraging remains incomplete but volatility is narrowing. Earlier
bottom-fishing funds facing losses may cap the slope of any rebound. 10-year UST
around 4.7% reflects both implied inflation and AI-driven debt issuance lifting
the long end. The US Treasury’s stepped-up buyback/repo activity signals policy
reluctance to let tighter financial conditions hurt AI investment and the
broader economy, leaving rate pressure on equities relatively contained.
Strategically, rebounds have visible floors and ceilings: policy backstops are
clear but fresh incremental funding has not coalesced, so market action is
Characterized by stock-level, not index-wide, rotation; a sustained index
breakout will require stronger catalysts. Tactical allocation should balance
cyclical and defensive exposures while awaiting a tech-sector clearing. Sector
focus: AI (upstream materials/equipment, domestic compute), innovative drugs,
nonferrous metals, machinery, new Energy, and dividends play.
