**I. Holiday Asset Price Movement Analysis: "US Government Shutdown Trade" (Weak Dollar, Strong Precious Metals, Softening Growth Expectations, Slight Rise in Easing Expectations) + "Takaichi Sanae Trade" (Strong Stimulus Expectations, Weaker Yen, Steepening Japanese Bond Yield Curve, Rising Japanese Equities).**
The sources of new catalysts remain unchanged: AI industry trend validation + continuation of specific commodity supply dynamics.
The US government officially shut down on October 1st, subsequently delaying the release of September non-farm payroll and inflation data, while ADP employment data recorded negative values primarily due to annual baseline adjustments. During this critical inflection point for the US economy, effective data guidance for economic direction remains absent.
This has led to weakening US economic growth expectations and rising anticipations for two rate cuts within 2025. The most direct manifestation in asset prices is the combination of a weaker dollar and stronger precious metals. We observe that following the US government shutdown, excessive concerns about the US economy emerged, causing rate cut expectations to surge. However, as markets shifted focus to subsequent Federal Reserve statements and responses, rate cut expectations experienced modest downward revision (though overall easing expectations remain slightly elevated).
On October 4th, Takaichi Sanae was elected as LDP president and is likely to become Japan's new Prime Minister. Markets anticipate a return to "Abenomics," corresponding to enhanced fiscal stimulus and slower interest rate hike processes, marking the return of yen carry trades. Currently, markets remain skeptical about whether Takaichi Sanae's economic and political inclinations expressed during the campaign can be implemented during actual governance.
The "Takaichi Sanae trade" featuring a weaker yen relative to the dollar, steepening Japanese bond yield curves, and significant Japanese equity gains should also enter an observation period following concentrated momentum.
**II. Overall Market Assessment Unchanged: Red October, Bullish on Q4 and Cross-Year Performance.**
The framework remains unchanged through spring 2026: technology industry catalysts significantly outnumber pro-cyclical catalysts. While technology growth may face medium-term valuation concerns, it remains distant from long-term valuation lows. Technology growth sectors may continue trending higher, ultimately reaching long-term overvaluation territories.
Spring 2026 may represent a cyclical peak (structural market high), when A-share markets could face three challenges: 1) Critical demand-side validation period arrives - while supply growth returns to low levels improving supply-demand dynamics, weak demand could still delay turning points and postpone new market phases. We emphasize that 2026 supply-demand improvements cannot be "disproven," only "delayed." The strengthening global easing environment in 2026 will restore the effectiveness of the "policy bottom, market bottom, economic bottom" sequential framework. Domestic accelerated easing timing may coincide with new market cycle initiation. 2) New structural highlights may require additional time - decisive catalysts for domestic technology industry trends and anti-involution effect validation both need time, with spring 2026 likely still lacking new main themes. 3) Long-term valuations of technology industry trends may reach low points (similar to Growth Enterprise Market in late 2013 and food & beverage sector in late 2019), potentially leading markets into medium-term consolidation phases.
Following Red October and cross-year performance, spring 2026 may represent a cyclical peak, but likely not the full-year 2026 high, and certainly not the peak of this comprehensive bull market. The bull market retains depth, with conditions for comprehensive bull market development becoming increasingly favorable over time.
**III. Structural Outlook Unchanged: "Technology Main Theme + Select Supply-Logic Cyclicals".**
Technology main themes focus on: AI applications, semiconductor manufacturing, and storage. Overseas computing power maintains medium-term beta upward trajectory despite short-term disruptions. Innovation pharmaceuticals, energy storage, solid-state batteries, Tesla robotics, and lithography equipment - directions that have accumulated significant gains - retain upside potential through spring 2026. Pro-cyclical investment priorities remain non-ferrous metals with clear independent logic (precious metals, copper).
Anti-involution represents the key structure for transitioning from structural to comprehensive bull markets, serving as an important medium-term structure (solar and chemicals). We maintain medium-term optimism on Hong Kong stocks, which may continue benefiting from global easing and new economy industry trend development, with Hong Kong market leaders demonstrating strong representation.
**Risk Warnings:** Overseas economic recession exceeding expectations, domestic economic recovery falling short of expectations.