[Cinda Consumer Jiang Wenqiang] Go to Places with Few People, Wait for the Wind

English summary

Important [Cinda Consumer Jiang Wenqiang]: Go where the crowd isn't, and wait for the wind. This week, consumer/value large caps generally rebounded, with the most obvious rebound in high-performing core stocks, such as Le Comfort and others, while small caps remain pressured by liquidity and their stock prices are declining in a volatile manner. Based on Q2 positioning distribution, the proportion of AI industry trend tracks has exceeded historical extremes, while consumer/value positions are at historical lows. Bottom-up, focus on selected quality stocks and wait for the wind. Next week is packed with major events: the Politburo meeting, July FOMC, large domestic IPOs, and dense earnings from overseas tech leaders, all of which may change market trends. Moreover, the US-Iran war continues to affect global inflation expectations, and CME futures currently price in a very high probability of a September rate hike. In our view, consumer/value have become somewhat desensitized to external risks; instead, after the landing of events such as rate hikes and large IPOs, disturbances will further gradually ease. In addition, dividend stocks currently present significant trading opportunities. The dividend yield of the CSI Dividend Index and Dividend Low Volatility Index is about 5%, which has entered a suitable range for insurance funds to increase positions. ...