Today, all three major A-share indices closed lower, with most broad-based indices declining and trading volume slightly contracting across the two exchanges. The Shanghai Composite Index fell 2.03% to 4,028 points, while the ChiNext Index plummeted 5.71%. Hong Kong stock indices posted modest gains today, with the Hang Seng Index rising 0.44% by the A-share market close. Trading volume across the two markets shrank slightly to approximately 3.4 trillion yuan.
Data from WIND shows most of the 31 first-tier Shenwan industries closed in negative territory. Sectors such as coal, textiles & apparel, media, and banking were among the top performers, gaining 1.60%, 1.58%, 1.17%, and 1.08% respectively. Communications, electronics, building materials, and computers saw significant declines. Out of over 5,300 stocks in the entire market, 3,159 fell, indicating poor market sentiment and weak profit-making effects.
Selling Computing Power by Overseas Giants Intensifies Supply Glut Concerns, Triggering Global Market Resonance and Correction
Overnight, overseas media reported on Meta's plans to sell computing power. According to Bloomberg, Meta is establishing a new business unit to monetize its surplus computing capacity by selling it to external clients. Potential plans include allowing external access to various AI models hosted on Meta's existing AI infrastructure, a model similar to AWS's Bedrock service. Meta would operate the data centers and chips powering its models like Muse Spark and charge developers for access. This move challenges the core logic underpinning the current global bull market in chips and computing power. The market had previously traded on the narrative of a persistent global AI computing power shortage, supporting the sustained rise of semiconductor, memory, and computing hardware sectors. Meta's action suggests potential overcapacity at major tech firms, severely challenging the growth valuation logic of the AI hardware supply chain, with the hardware segment leading a valuation correction. This news triggered a sharp sell-off in overseas chip and memory sectors, with core stocks facing intense selling pressure, further amplifying panic across global tech themes. The negative sentiment quickly spread to Asia-Pacific markets. Today, South Korean stocks led the decline, with the KOSPI index plunging 7.89%. The collective weakness in Asia-Pacific tech stocks exerted negative pressure on the A-share market. Influenced by this overseas "negative" news and significant external market volatility, A-shares weakened across the board today. The major index fell over 2%, with the tech growth sector being the hardest hit. The ChiNext Index dropped sharply by 5.64%, becoming the primary drag on the market. Among sub-sectors, previously hot themes like memory chips, semiconductor equipment, glass substrates, and AI computing hardware saw substantial collective corrections. Stocks within these sectors generally fell sharply, with a notable increase in limit-down stocks, spreading widespread losses across the market. It should be noted that today's A-share correction likely stems more from profit-taking by earlier bulls and the "growing pains" during market style rebalancing, rather than a fundamental shift in the narrative around CSP capital expenditure and AI computing demand.
Overseas Macro Developments: Fed's Waller Sticks to 2% Inflation Target; ADP Data Misses Expectations
Overnight, Federal Reserve Governor Christopher Waller spoke at the ECB Forum on Central Banking in Sintra, offering no clear policy signals. Waller stated that US inflation expectations have declined over the past four weeks, and inflation risks have decreased compared to before. However, he emphasized the Fed would not easily change its policy direction based on short-term data fluctuations. He reiterated multiple times that the Fed would not accept an inflation target above 2%. When asked about a potential rate hike at the meeting four weeks later, Waller did not directly respond. He indicated the Fed will receive substantial new economic data over the next four weeks, and the FOMC will engage in thorough internal discussions, therefore he would not provide forward guidance in advance. Following Waller's remarks, the three major US stock indices initially fell but later fluctuated and recovered. On the economic data front, the US ADP employment report for June was released overnight, showing an increase of 98,000 jobs, the lowest gain since March, missing expectations of 118,000 and down from a previous 122,000. This data change marks the first signs of loosening in the previously persistently strong US labor market, which had been a key factor supporting the economy and maintaining the monetary policy stance. The significant slowdown in job growth may suggest a gradual cooling in labor demand. However, overall market sentiment remains relatively cautious, with investors focusing more on the upcoming non-farm payrolls data due on July 2nd. Unexpected data tonight could trigger more pronounced volatility.
Heightened Volatility in High-Valuation Assets; A-Share Interim Report Window Anchors on High-Growth Sectors
Recent volatility in high-valuation assets has intensified, but risk appetite has not systematically weakened. Looking ahead, domestically, with the interim earnings preview window approaching, the market's pricing focus is expected to gradually shift from industry trends and thematic catalysts to order books, revenue, and profit realization capabilities. Further differentiation within the tech sector is likely, and non-tech sectors may also demonstrate strong performance during the earnings window. Overseas, while eased US-Iran tensions have led to a decline in oil price risk premiums, alleviating some pressure from worsening inflation, the robust US economy and employment data continue to push real interest rates and the US dollar index higher. Rate hike expectations may still fluctuate, thereby suppressing valuations for global growth stocks. Over a longer horizon, as the US economy is expected to weaken marginally after the World Cup pulse and with a year-on-year slowdown in US CPI, easing inflation concerns will likely favor the Fed signaling a more dovish stance. Looking forward, the A-share market is likely to maintain high-level volatility. Under the current pattern of存量博弈 (stock game), sector rotation may be rapid. However, the main market trend remains intact. Following short-term adjustments, capital is still expected to seek structural opportunities around "verifiable high-growth tech + low-position recovery plays," potentially leading to a relatively balanced new round of上涨行情 (rising market).
Industry Allocation Strategy: Balanced Approach to Navigate Market Swings
For industry allocation, a balanced approach is recommended to应对市场波动 (cope with market volatility). Medium-term focus should remain on tech industry trends while验证能源与供应链安全新景气方向 (verifying new growth directions in energy and supply chain security). During the earnings verification period, avoid high-valuation, high-position thematic stocks lacking业绩支撑 (earnings support). On the offensive side, tech growth is likely to remain the medium-term主线 (main theme), but short-term focus should be on sectors with订单 (orders),业绩兑现 (earnings realization), and产业趋势支撑 (industry trend support), such as computing power, semiconductor equipment, and materials. Against the backdrop where the tech赛道 (track) is not yet明显泡沫化 (significantly frothy), high-growth directions may still possess some ability to withstand liquidity disturbances. Simultaneously, tightening mineral policies coupled with rising demand from AI servers make strategic minor metals like molybdenum, tantalum, germanium, tungsten, indium, and tin值得关注 (worth watching). As energy prices and corporate cost constraints gradually materialize, directions related to energy security such as computing-power grid coordination, energy storage, wind power, green power grids, and lithium batteries may有望成为新的景气分支 (become new growth branches). Innovative drugs could also serve as a supplementary allocation with independent industry逻辑 (logic). On the defensive side, short-term capital rotating from high to low positions may continue flowing into high-dividend sectors and cyclical sectors benefiting from海峡通航 (strait navigation). Sectors like non-ferrous metals, chemicals, and coal are建议关注 (suggested for attention). Furthermore, non-bank financials also represent a direction with strong interim earnings景气度 (momentum). Advantages such as high industry景气度 (prosperity), historically low valuation levels, and largely cleared institutional筹码 (positions) may令非银板块继续得到资金下阶段的重点关注 (lead the non-bank financial sector to continue receiving significant attention from capital in the next phase).
Risk Disclosure
The data used in this material is for reference only. The views and analytical forecasts cited represent the analysis and judgment of investment research personnel under specific current market conditions and based on certain assumptions. This does not imply suitability for all future market conditions and does not constitute investment advice for readers. Investing involves risks, and caution is required. Before making any investment decision, please carefully read the fund contract, fund prospectus, fund product key facts statement, and other legal product documents, as well as this risk disclosure. Fully understand the risk-return characteristics and product features of this fund, seriously consider all risk factors associated with the fund, and based on your own investment objectives, investment horizon, investment experience, and asset status, fully consider your own risk tolerance. On the basis of understanding the product situation and sales suitability opinions, make rational judgments and prudent investment decisions.
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