The meeting of the Political Bureau of the CPC Central Committee, which has attracted much attention from the market, was officially held on April 25. The meeting analyzed and studied the current economic situation and economic work. The relevant policy layout involved many fields such as finance, currency, people's livelihood, and industries.

What positive signals does this meeting send? How will fiscal and monetary policies work together in the future? What kind of investment inspiration will it bring? Many fund companies provide comprehensive interpretations from six aspects.

Highlight 1: Meetings release multiple positive signals

Overall, the background of this meeting is the escalation of Sino-US trade frictions. While fully understanding external pressure, it continues the general tone of "seeking progress while maintaining stability", and the overall policy expression is relatively positive.

In the view of Wei Fengchun, chief economist of Chuangjinhexin Fund, the "unusual" thing about this meeting is that in the context of a complex external environment and a stable foundation for the domestic economic recovery, it has comprehensive and proactive policy layout, involving many fields such as finance, currency, people's livelihood, and industries, demonstrating the determination and systematic thinking of policy makers to deal with economic challenges.

Chen Xianshun, chief equity strategy analyst at Bose Fund, analyzed that this meeting sent positive signals in many aspects: First, the meeting proposed that "we must speed up the implementation of more active and effective macro policies and strengthen extraordinary countercyclical adjustments", and the subsequent overall macro policies are expected to continue to have a more expanded and more positive orientation. Secondly, the meeting also mentioned "accelerating the issuance and use of local government special bonds, ultra-long-term special treasury bonds, etc.", "timely lowering the reserve requirement ratio and interest rate, and maintaining sufficient liquidity", and the expression of monetary and fiscal is also positive.

"In addition to the positive signals at the total level mentioned above, other aspects of the market such as consumption, real estate, and capital markets have also been positively expressed. In terms of consumption, this meeting emphasized the importance of service consumption, and at the same time made it clear that the establishment of service consumption and retirement re-loans is worthy of attention." Chen Xianshun said.

Yongying Fund said that from the signals released by the meeting, there are three positive factors worth paying attention to: First, scientific and technological innovation and high-quality development are still placed in priority; Second, macroeconomic policies still maintain an expansionary orientation; Third, the meeting particularly emphasizes "stabilizing the market and stabilizing expectations", reflecting the decision-makers' high attention to the stability of the capital market, and domestic demand stimulus policies also pay more attention to the driving role of service consumption.

Highlight 2: Fiscal and monetary policies work together to protect liquidity

Wei Fengchun was deeply impressed by the "starting the implementation of more active and proactive macroeconomic policies, making good use of more active fiscal policies and moderately loose monetary policies" mentioned at the meeting.

"From the signal strength, 'intensification' highlights the urgency of the policy, policy makers have keenly captured the demand that policies need to be implemented quickly under the current economic situation. Active fiscal policy can directly inject funds into infrastructure construction, people's livelihood security and other fields by accelerating the issuance of special bonds and ultra-long-term special treasury bonds, and stimulate total demand; monetary policy timely lowers the reserve requirement ratio and interest rate, which can reduce corporate financing costs and increase market liquidity." Wei Fengchun analyzed.

Talking about the possible impact of the above policies on the capital market, he believes that more proactive fiscal policies, such as accelerating bond issuance, will increase the supply of market funds on the one hand, and provide incremental funds for the capital market; on the other hand, funds flow to key supporting industries, guide market investment directions, and drive the improvement of stock valuations in related industries.

In addition, under moderately loose monetary policy, lowering the reserve requirement ratio will help increase banks' loanable funds, lower interest rates and reduce corporate financing costs, and increase corporate profit expectations. Investors' demand for risky assets such as stocks has increased, and market risk preferences have increased. "New structural monetary policy tools and new policy-based financial tools support scientific and technological innovation, expand consumption, stabilize foreign trade and other fields, which will attract funds to gather in these fields, optimize the structure of the capital market, increase the activity and attractiveness of the capital market, and promote the long-term stable and healthy development of the capital market." Wei Fengchun pointed out.

Cathay Fund said that the meeting proposed to make good use of more active fiscal policies. Fiscal policy changes may be in June or August, with an expected increase of 1% deficit; in addition, the overall monetary policy statement since the Central Economic Conference was maintained, "We believe that the future reduction of reserve requirement ratio and interest rate cuts will still depend on the progress of the international economic and trade struggle."

During this meeting, macro policies remained expanding, and both fiscal and monetary policy statements were relatively positive. "But policy implementation pays more attention to rhythm and precision to avoid excessive stimulus leading to premature exhaustion of policy space." Yongying Fund analyzed.

"Although the meeting did not emphasize more incremental policies, accelerating the implementation of existing policies will also have good effects on stabilizing growth, and there is a possibility of lowering the tariffs imposed by externally in the future. Prioritizing the use of existing policies will help avoid future changes in the external environment, which will lead to the passive internal policies." The investment research team of Invesco Great Wall Fund said.

Highlight 3: "Stable the market and stabilize expectations" will help prevent irrational fluctuations in the market

The meeting pointed out that we will unswervingly expand high-level opening up to the outside world, focus on stabilizing employment, enterprises, markets and expectations, and respond to the uncertainty of sharp changes in the external environment with the certainty of high-quality development.

Wei Fengchun believes that in the context of deep integration of the global economy and complex and changing international situation, unswervingly expanding high-level opening up is a strategic choice for my country to integrate into the global economy and enhance its international competitiveness. Through reform and opening up, foreign investment can be attracted, advanced technology and management experience can be introduced, overseas markets can be expanded, and new impetus can be injected into economic growth.

At the same time, stabilizing employment is the cornerstone of ensuring people's livelihood and maintaining social stability; stabilizing enterprises can stabilize economic entities and ensure the stability of the industrial chain and supply chain; stabilizing the market can maintain the normal operation of economic order; stabilizing expectations can stabilize the confidence of market participants and avoid the contraction of economic activities due to uncertainty.

"With the certainty of high-quality development, responding to the uncertainty of sharp changes in the external environment, is to enhance economic resilience and risk resistance by promoting industrial upgrading, innovation-driven development, and improving total factor productivity, reduce the negative impact of external shocks on my country's economy, and achieve sustainable economic development." Wei Fengchun said.

Yongying Fund said that the meeting emphasized "stabilizing the market and stabilizing expectations", which reflected the decision-makers' high attention to the stability of the capital market, which will help stabilize investor sentiment and prevent irrational fluctuations in the market. In addition, the domestic demand stimulus policy has obviously paid more attention to the driving role of service consumption, which is in line with the general direction of economic structure transformation and upgrading.

"The policy priority of stabilizing employment and stabilizing enterprises has also been significantly improved." Yongying Fund analyzed that unlike simple demand stimulus, the meeting emphasized that "protecting production" to stabilize employment fundamentals. This supply-side thinking is more in line with the characteristics of the current economic transformation stage, and also means that policies may make more efforts from the perspectives of improving the business environment and reducing institutional costs.

This meeting proposed for the first time that "we should increase the income of middle- and low-income groups", and proposed "clear restrictive measures in the consumption field as soon as possible, and establish re-loans for service consumption and pension", and clearly stated that the "two new" policies will be implemented to expand the scope and improve the quality, and the implementation of the "two-fold" construction will be strengthened. The investment research team of Invesco Great Wall Fund believes that this further strengthens the macro-control idea dominated by consumption and has a relatively positive impact on boosting total demand.

Judging from the meeting, Cathay Fund believes that in the future policies are expected to continue to focus on domestic demand to stabilize growth. Specific clues include service consumption, artificial intelligence+, accelerated issuance and use of government bonds, government bonds, and real estate urban renewal.

Highlight 4: Pay attention to changes in external situations, pay attention to the capital market and real estate market

While affirming the improvement of the domestic economic situation, the Political Bureau of the Central Committee also clearly pointed out that "the impact of external shocks has increased." In terms of responding to external pressure, the meeting made it clear that "coordinate domestic economic work and international economic and trade struggles, unswervingly do your own business well, and unswervingly expand high-level opening up to the outside world", indicating that domestic economic work must still be steadily promoted while facing external pressure, rather than disrupting the early deployment.

Talking about specific measures to deal with the impact of tariffs, the investment and research team of Invesco Great Wall Fund analyzed that, on the one hand, from the perspective of protecting people's livelihood, "for enterprises that are more affected by tariffs, increase the proportion of job stability refunds for unemployment insurance funds. Improve the stratified and classified social assistance system." On the other hand, from the perspective of opening up to the outside world, we proposed to "increase the intensity of pilot policies for opening up the service industry" and "to work with the international community to actively safeguard multilateralism and oppose unilateral bullying."

In response to external uncertainty, the meeting also pointed out that "introduction of incremental reserve policies in a timely manner according to changes in the situation and strengthen extraordinary countercyclical adjustments", which means that future policies will be endogenous to the economic situation. If the situation changes negatively, countercyclical policies will also be put into effect in a timely manner.

It is worth mentioning that this meeting brought the importance of capital market stability to a new level. Yongying Fund said that in the critical period of China-US strategic game, maintaining the stable operation of the capital market is of special significance, which is both related to market confidence and financial security.

"This meeting clearly pointed out that the "continuous stability and active capital market" is further put forward the requirements of "active" compared to the previous "stability". "The investment and research team of Invesco Great Wall Fund pointed out.

In terms of real estate, the meeting continued the tone of "risk prevention" and was more inclined to promote the stable and healthy development of the real estate market through long-term mechanisms. The meeting focused on "strengthening the implementation of urban renewal actions, vigorously and orderly promote the renovation of urban villages and dilapidated houses", and "accelerating the construction of a new model of real estate development, increasing the supply of high-quality housing, and optimizing the acquisition policy of existing commercial housing", which basically meets the previous market expectations.

In addition, the meeting once again emphasized "accelerating the resolution of the problem of local governments' arrears of corporate accounts", which is one of the important sources of insufficient social demand, and it will also have obvious positive significance if the resolution is accelerated.

Highlight 5: What is the impact on A-shares?

The impact of previous meetings of the Political Bureau of the Central Committee on the capital market has always attracted much attention, and this time is no exception.

Looking ahead to the future market, Invesco Great Wall Fund Investment Research Team believes that the Politburo meeting continues to send positive signals, and A-shares are not pessimistic in the medium term. "The overall content of this meeting is in line with market expectations. Although there is no mention of the introduction of incremental stimulus policies in the short term, the overall idea is to accelerate the use of existing policies and decisively introduce incremental countercyclical policies in the future in light of changes in the situation. We believe that it will also have good results for stabilizing growth and expectations."

Looking forward, the market has rebounded recently as government funds are actively inflowing into the market and tariff policies have shown a positive turnaround. Some indexes have gradually recovered the sharp drop caused by "reciprocal tariffs", and overall risk appetite has improved.

Looking back, after the market fills the gap in the previous decline, it may face pressure from some bottom-line funds to take profits, and the impact of tariffs on economic data may gradually be reflected in May. "But considering the strong attractiveness of the overall market valuation, the equity risk premium of the Shanghai and Shenzhen 300 is still at a high level, and the dividend yield level is still 160bp higher than the 10-year treasury yield. The market still has room for improvement in valuation. The overall performance of A-shares in the medium term is not pessimistic, and valuation will still be the main driving force for the market's upward trend." Invesco Great Wall said.

"The tone of the meeting is generally in line with the mainstream market expectations and is expected to have limited impact on the market." Yongying Fund believes that in the medium-term dimension, due to the restrictions of stable market expectations and policy reserves, the market downward space may be relatively limited, and structural opportunities may be more prominent. The technology growth sector is expected to usher in investment opportunities after adjustment, and defensive assets can hedge against fluctuations, and the overall market may enter a stage of volatile differentiation.

In terms of capital markets, this meeting proposed "continuously stable and active capital markets." Regarding this. Chen Xianshun believes that the subsequent market stability maintenance forces are expected to continue to maintain market stability when external shocks increase.

"For the market, under the current global economic and trade struggle, market fluctuations in the second quarter are still expected to be relatively large." Cathay Fund pointed out, but at the same time, the clear statement of policies to stabilize employment, enterprises, market and expectations can help the market risk preference stabilize.

"It is precisely when the market valuation is low that policy increase may be a catalyst for market reversal. Under a package of 'stabilizing confidence' policies, the market is expected to regain the upward trend and firmly optimistic about the long-term investment opportunities of China's assets." Caitong Fund pointed out.

Highlight 6: Focus on technology and consumer investment opportunities

Talking about specific asset allocation opportunities, Yongying Fund, from the conference's analysis of technology and consumption, believes that it can focus on the main line of technological growth (AI, semiconductors, robots, etc.), consumer structural opportunities (service consumption, automobile loosening), and high-defense dividend assets. It can use market volatility to pay attention to areas with strong policy certainty when it is low, and at the same time consider retaining the bottom position to deal with potential risks.

"As for consumption, this conference focused on 'vigorous development of service consumption', and subsequent investment areas related to service consumption are worth paying attention to," said Chen Xianshun.

In addition, the meeting pointed out that "cultivate and strengthen new quality productivity and create a number of emerging pillar industries" and "accelerate the implementation of 'Artificial Intelligence +' actions". He believes that it is necessary to continue to track emerging industries such as artificial intelligence in the future.

The investment research team of Invesco Great Wall Fund pointed out that if the tariff negotiation process is relatively long, corporate profits are generally affected, and high-prosperity industries are relatively scarce, the dividend style will still have relative returns in the medium term, especially stocks that benefit or are stable on the molecular side.

"On the other hand, DeepSeek's breakthrough provides conditions for the development of AI application scenarios. The current high prosperity of the AI ​​industry may still be in the early stages. In the future, from computing power, cloud computing and other infrastructure to application links, it is expected to gradually realize profitability, which is still an important main line in the medium term." In terms of domestic demand sector, the above-mentioned companies analyzed that with the further increase in the stable growth policy and the rebound in effective demand, there are still good investment opportunities in service and emerging consumption fields.

Structurally, Cathay Fund focuses on three aspects: First, absolute dividend hedging, including banks, utilities, and precious metals, there is still a certain need for bottom-up allocation; second, related industries with the possibility of import substitution are the main line of rebound, including national defense and military industry, agriculture, forestry, animal husbandry, fishery, medicine and biology; third, the direction of the policy of stabilizing domestic demand growth, including new consumption such as real estate, trade and retail.

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[Editor in charge: Xie Wei PF123]