K-typedivergencehasbeenreinforcedbynarratives,anditisnormaltoseefluctuationsandconvergencerecentlyduetonarrativeswings.Thisweekwitnessedmarginalchangesintwosetsofnarratives:onerelatedtotheglobalmonetaryenvironmenthypothesis,wherethemarkethasbeguntomorecomprehensivelyassesstheFed'spolicystanceratherthanpresupposingahawkishratehikepath.Thenarrativeoftighteningandastrongdollarhasswungback,andnegativesentimentinnon-AIsectorshasbeenrepaired;theotherrelatestotheindustrialtrendofAI,whereanewsitemaboutMETAsparkedhugecontroversy,reflectingthemarket'scurrentlackoftoleranceforanynegativeAIindustryinformation,andalsoindicatingthatdownstreamsectorsneedrichercommercialmonetizationformstosupportmoreaggressiveupstreaminvestmentexpectations.Additionally,weexpecttheoutflowpressureonA-sharebroad-basedETFstoeasesignificantly,whichisthemostimportantmarginalchangeatthemarketliquiditylevel.Thecorrectionoftheratehikenarrative,combinedwithmarginalchangesinmarketliquidity,isexpectedtocatalyzearecoveryinsomenon-AIsectorswithearningssupport.TheNarrativeBehindK-TypeDivergenceHasChanged;MarketFluctuationsAreExpected-----------------------Overthepastfewweeks,wehaverepeatedlyexplainedthattheglobalK-typedivergenceisreinforcedbynarratives.First,thestrongdollarandratehikeexpectationshaveagreaterimpactonnon-AIsectors,exacerbatingtheK-typedivergencecausedbydifferencesinbusinessconditions;second,weakdomesticdemanddatainChinadeepenedinvestors'biasagainstnon-AIsectors,leadingtoanarrativeof"carbon-based"vs."silicon-based"oppositionrarelydiscussedoverseas.A-sharenon-AIsectorssignificantlyunderperformedtheiroverseascounterparts,eventhoughtheyoperateingloballyexposedbusinesses,especiallysomecyclicalmanufacturingsectorswithstrongbusinessconditionsandinnovativedrugsectorswithupwardindustrialtrends;third,besidesthebusinessspilloverfromtheNorthAmericanAIchain,A-sharetechsectorsalsoenjoyedavaluationpremiumforself-relianceinthedomesticchain,significantlyoutperformingoverseasAIsectorssinceJune(thePhiladelphiaSemiconductorIndex,KoreaKOSPI50,andMSCIGlobalSemiconductorProductsandEquipmenthadreturnsof-1.6%,-1.9%,and-2.2%,whileA-sharesemiconductormaterialsandequipment,CSISemiconductor,andSTARChiphadreturnsof+43.2%,+32.9%,and+20.7%),makingthedivergenceinA-sharesevenmorepronouncedthaninoverseasmarkets.Settingasidenarrativeandemotionalopposition,themarketshouldhaveamorediversifiedpricingsystemandinclusiveaestheticperspective,asalsoelaboratedintheJuly2articleinShanghaiSecuritiesNewstitled"Beyondthe'TechHuddle'Narrative:CapitalMarketInclusivenessNeedsDiversePricing."Whenamarketistemporarilydominatedbynarrativesandemotions,itisnormaltoexperiencesomefluctuationsduetonarrativedisturbancesintheshortterm;thelong-termbulllogicandthemaintechthemewillnotchange.MarginalChangesinTwoSetsofNarratives:MonetaryHypothesisandIndustrialTrends-------------------1)Monetaryhypothesis:ThemarkethasbeguntomorecomprehensivelyassesstheFed'spolicystanceratherthanpresupposingahawkishratehikepath.Waller'srecentremarksshowa"hawkishstanceunchanged,marginalrhetoricturningdovish,"indicatingthatU.S.inflationriskshaveeasedoverthepastfourweeks,andthesupplyexpansionbroughtbyAImayprofoundlychangethewaytheeconomyoperates.However,whetheritwillbringinflationordeflationshouldbejudgedbythecentralbankbasedondata.Themarket'snarrativethatAIinfrastructurecrowdingoutenergyandresourcesleadstoinflationinthecarbon-basedworldandtriggersratehikescurrentlylackssufficientdataverification.WallerpreviouslystatedthatcomparedtocorePCE,hepaysmoreattentiontothetrimmedmeanPCE,whichcanfilteroutabnormalpricedisturbances.TheMaytrimmedmeanPCEwas2.4%year-on-year,significantlylowerthancorePCE,indicatingrelativelymoderatetrendinflationpressures.Subsequently,theJunenon-farmpayrolldatafurtherconfirmedacoolinglabormarket,leadingthemarkettorepricetheFed'spolicypath,withU.S.Treasuryyieldsandthedollarindexfallinginsync.SinceFebruary,themarketbegantorepricehawkishexpectations,thedollarindexrebounded,andK-typedivergenceacrossmarketsintensified.AIhardwaredemand,duetohighbusinessconditionsandstrongordervisibility,hasrelativelylimitedsensitivitytomonetarytightening;non-AIsectors,ontheotherhand,aremoresuppressedbyhighinterestrates,astrongdollar,andriskaversion.Recentmarginalchangesinthedollarandgoldtrendssuggestthatextremeconcernsaboutliquiditytighteninghaveeased.Asthestrongdollarnarrativecoolsandoverseasliquidityexpectationsimprovemarginally,thevaluationsofpreviouslysuppressednon-AIsectorsareexpectedtograduallyrecover,andmarketstylemayshiftfromextremeAItradingtoamorebalancedstructure.2)Industrialtrends:META'smovesparkedhugecontroversy,indirectlyreflectingthemarket'slackoftolerancefornegativeAIindustryinformation.WebelievethatMETA'sshifttoIaaSitselfdoesnothavemuchsubstantiveimpactonAIcomputinginvestment;infact,openinguptheIaaSbusinessmayevenbeaimedatmoresustainablystabilizingCAPEX.However,thecapitalmarkethasgivenMETA'sstockapositivepricingintheshortterm,andwhatismoreconcerningisthemutualimitationamongCSPvendors.Inthismatter,theriskisactuallycontrollable;Google/Amazon/MSFTalreadyhaveIaaSbusinessesanddonotinvolveimitatingMETA,andcurrently,stockpricesarenotthemainshort-termcontradictionforthesecompanies.ThemorecriticalissueisthatthemarketiscurrentlysohotthatitisextremelysensitivetoanynegativeAIinformation,whichinitselfmeansthatthepreviousmarketdivergencewastoosevere,andthemarketneedsappropriaterebalancing.Recently,thecontroversyovertokencostshasalsobeenheatingupamongNorthAmericanAIapplicationvendors.Palantir'sCEO'squestioningofthebusinessmodeloffrontierAIlabshassparkedheateddiscussion.ThismeansthatevenwithintheAIsector,theimbalanceinprofitdistributionalongtheupstreamanddownstreamistriggeringindustrialreflection.HardwarevendorsrepresentedbystorageandopticalcommunicationshavesignificantlyoutperformedMag7thisyear;ifcalculatedby6-monthcumulativeexcessreturn,itcurrentlyreaches199%.Balancingandstreamliningprofitdistributionmaybecrucialfortherestartofthenextphaseofthemarket.ImportantMarginalChangeinFundFlows:RedemptionsofBroad-BasedETFsExpectedtoSlowSignificantlyinH2----------------------------Overthepast3weeks,thefourmajorCSI300ETFshadtotalnetredemptionsofRMB42.2billion,RMB90.4billion,andRMB58.5billionrespectively,whileothermajorbroad-basedETFsdidnotseesignificantnetredemptions.Weexpectthesellingpressureonbroad-basedETFstoeasesignificantlyinH2.Ononehand,basedontheactualshareholdingdataattheendof2025,asofJuly3,2026,largefundsheldapproximatelyRMB20-30billionofCSI300ETFsremaining.Ifthecurrentnetredemptionpacecontinues,itisexpectedtoendwithinaweek,withlimitedpotentialreductionscaleleft.Ontheotherhand,accordingtomarketconsensusforecasts,the2026EnetprofitgrowthratesforallA-sharesandallA-sharesexcludingfinancialandpetroleumandpetrochemicalareapproximately9%and13.5%respectively.Anindexriseofabout10%forthefullyearcanbeconsideredconsistentwithastablebullmarket(theShanghaiCompositeIndexroseonly3.2%inH1),sotheneedforcoolinginH2hasalsodecreased.InH1thisyear,broad-basedETFshadcumulativenetredemptionsofRMB1,857.7billion,whileindustry/themeETFshadcumulativenetsubscriptionsofRMB253.1billion,ofwhichtechETFshadnetsubscriptionsofRMB88.9billion.Fornon-AIsectorslackingactivefundintervention,thisisequivalenttoararenetreductionmarketinscale;conversely,ifthenetoutflowpressureonETFsdecreasesinH2,thefundingpressureonA-sharenon-AIsectorswillalsobesignificantlyalleviated.ReversalofRateHikeNarrativeCombinedwithMarginalChangesinMarketLiquidity:FocusonRecoveryinSomeNon-AISectors--------------------------------InH1,thestrongdollarandFedratehikenarrativehadastrongersuppressingeffectonnon-AIsectors,therebyreinforcingtheK-typedivergence;ifthisnarrativereverses,itwillconverselypromptaconvergenceoftheK-typedivergence.LookingaheadtoH2,netoutflowsfrombroad-basedETFsareexpectedtoslow,andthefundingpressurethatpreviouslysuppressednon-AIsectorsmaysignificantlyease,alsobenefitingtherecoveryofsomenon-AIsectorswithsoundbusinessconditions.Intermsofallocation,westillrecommendstickingtotheAI+energyandchemicalsstructure.OntheAIside,ourpreferenceshiftstowardsectorswithstrongsupplyconstraintsandlowvaluations,narrowingthescope.Intermsoftheindustrialchain,wealsorecommendmid-anddownstreamproducts,suchascloudvendors,storage,gasturbines,anddieselgeneratorsets.Ontheenergyandchemicalsside,innewenergy,weareoptimisticabouttheearningsrealizationofelectrolytesandadditives,separators,etc.;inchemicals,thedeclineintheoilpricecenterandvolatilitybringsrestockingandproductionstart-updemand,andthepeakingofmacroliquidityexpectationswillbeapotentialrhythmpointlater.Currently,weprefervarietieswithlargecostreductionpotential,relativelyrigiddemand,andlowvaluations,suchasrefrigerants,phosphoruschemicals,spandex,dyes,large-scalerefining,etc.;innon-ferrousmetals,werecommendcomputingmetalswithsomeAIexposurebuttemporarilysuppressedvaluationsduetotheratehikenarrative,suchastinandcopper.Inaddition,wecontinuetorecommendincreasingallocationtolow-valuationbrokerages,asthecurrentliquiditysuppressionandotherflawsmaygraduallyfadeinH2,andtheinterimearningspreviewisalsoacatalyst.Atthesametime,weareoptimisticabouttherecoveryofinnovativedrugswithupwardindustrialtrendsandthoroughlyclearedpositions.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

Reward
like
Comment
Repost
Share

Comment

Add a comment

No comments

Trending Topics
View More
#
GTBurns2.57MInQ2
80.13K Popularity
#
PredictWorldCup🇵🇹vs🇪🇸
249.32K Popularity
#
VitalikUnveilsLeanEthereum
17.65K Popularity
#
gStocksTokenizedStocksLive
4.86M Popularity
#
BitcoinWhalesAdd270KInTwoWeeks
61.31K Popularity

Pinned

Sitemap

Interest rate hike narrative flips and layered liquidity changes; focus on repairing some non-AI sectors.

Trending Topics

GTBurns2.57MInQ2

PredictWorldCup🇵🇹vs🇪🇸

VitalikUnveilsLeanEthereum

gStocksTokenizedStocksLive

BitcoinWhalesAdd270KInTwoWeeks

Pinned