CITIC Securities: The current risks have been released in advance, providing an opportunity to reallocate A-shares/Hong Kong stocks at the end of the year and to plan for 2026.

According to a report by Jinse Finance, Citic Securities' research points out that the fluctuation of global risk assets is superficially a liquidity issue, but essentially it is due to the over-reliance of risk assets on a single narrative of AI. When the pace of industrial development cannot keep up with the rhythm of the secondary market, appropriate valuation corrections can also serve as a way to alleviate risks. On Thursday evening Beijing time, the release of U.S. non-farm payroll data and the downward adjustment of interest rate cut expectations by the Fed triggered corrections in high asset valuations, and market anxieties over the sustainability of North American AI infrastructure were exacerbated by the delayed expectations of rate cuts. The widening of commercialization scenarios in AI, hardware cost advantages, and rising financial stability risks may force the Fed to cut interest rates earlier, potentially breaking the current deadlock. Prior to this, for the A-shares, the continuous inflow of absolute return-oriented funds has been enhancing the intrinsic stability of the market. Under the ecosystem of increasing incremental funds predominantly composed of left-side stable funds, A-shares/Hong Kong stocks may increasingly resemble U.S. stocks in exhibiting “sharp falls and slow rises.” For investors needing to increase equity allocations, the current early release of risks provides an opportunity for reallocating A-shares/Hong Kong stocks and planning for 2026 by the end of the year.