CITIC Securities: Market Liquidity will reach an inflection point, policy signals still need to be awaited

Jinshi data news on July 7th, CITIC Securities research report stated that the withdrawal of active funds is waiting for the landing of the Third Plenary Session, and the market Liquidity continues to be low. In this environment, A shares are more easily affected by emotional factors. It is expected that the Liquidity of the market will turn around after the Third Plenary Session, and there is hope that the Political Bureau meeting at the end of the month will clearly signal the policy to stabilize the economy in the second half of the year. In terms of allocation, it is recommended to downplay the short-term impact of Central Bank's control of long-term bond interest rates on low-volatility dividends, continue to hold low-volatility bottom positions, and gradually shift to high-quality growth after the three major turning point signals are clear. Firstly, the withdrawal of active funds, the market may continue to be in a stock or even a reduction state before the Third Plenary Session. Although the trading volume continues to be low, there will be no Liquidity risk similar to the beginning of the year. Secondly, although strengthening tax collection and management is a necessary measure under the background of long-term tax reform, it has strengthened investors' negative expectations for the economy in the short term, and the differentiation between A shares and the global market has also intensified investors' frustration. Finally, after the Third Plenary Session is landed, the market trading behavior is expected to return to normal, and the Political Bureau meeting at the end of the month is expected to clarify the policy measures to stabilize domestic demand and housing prices.