Market Signals and Strategic Positioning for the Next Phase of A-Share Trading

I. Policy Front: AI and Employment Integration Emerges as a New Long-Term Theme

The most significant development over the weekend came from the State Council’s General Office, which released the “Opinions on Adapting to AI Technology Development and Building an Employment-Friendly Development Model”. The core of this document is not simply about expanding the scale of the AI industry, but rather placing AI development and employment structural transformation within the same framework—an uncommon pairing in previous policy statements.

The document conveys three key signals.

First, regional division of labor is further clarified. Eastern regions are encouraged to focus on core AI industries, while central and western regions are positioned to undertake data labeling, intelligent terminal manufacturing, and other upstream/downstream links. This indicates AI is no longer just a first-tier city narrative, but is being incorporated into a broader plan for regional coordination and employment absorption. For the equity market, we may see a supply chain mapping logic of “core algorithms and computing power in the East, data services and manufacturing support in the Midwest.”

Second, a closed loop between enterprise cultivation and financial support is formed. The document calls for accelerating the cultivation of “AI-native” enterprises and specialized “little giant” companies (SMEs with niche expertise), and for including them in the scope of special financial loan programs for job stabilization and expansion. The key point here is that policy is no longer focused solely on “large models” or “head platforms,” but is redirecting resources toward a broader base of innovative SMEs. For investors, companies in the specialized and innovative (专精特新) segment with substantive AI business operations may receive more sustained policy attention.

Third, professional standards and talent supply are being prioritized. New occupations such as digital management specialists, AI engineers, and AI trainers are explicitly named, with encouragement for local governments to add relevant professional title review categories and carry out vocational skill level certifications. This effectively addresses the “last mile” of talent infrastructure needed for large-scale AI deployment. Whether an industry transitions from thematic speculation to fundamental delivery often depends on whether talent supply can keep up—and this document is precisely addressing that longer-term constraint.

From a strategic perspective, this policy is a typical medium- to long-term industrial guidance signal, not an immediate trading catalyst. However, it’s worth noting that when the market is characterized by rapid sector rotation and a lack of clear leadership, such top-level documents often become the “anchor” for capital to rebuild consensus.

II. Oil Prices: Geopolitical Premium and Low Inventories Combine, Cost Pressures Re-emerge

The movement in the crude oil market warrants attention. Brent crude rose over 6% in a week and more than 10% in a month, reclaiming a near-term high; WTI also settled above $103. This is not driven by a single factor, but rather a resonance between geopolitical risk premium and tight fundamental inventories.

From a fundamental data perspective, OECD commercial inventories have fallen to a five-year low, declining 27 million barrels in a single month. The IEA estimates the global supply-demand deficit at about 1.6 million barrels per day in Q3, potentially widening to 2 million barrels per day in Q4. Meanwhile, VLCC freight rates have risen to 10 times their level from the same period last year, indicating that the transportation segment itself is exacerbating supply-side tension.

A risk scenario outlined by institutions is that if the conflict further escalates and key energy infrastructure is damaged, oil prices could quickly spike to $150. The probability of this scenario is not high, but once priced into expectations, its suppression of global risk assets would be systemic.

For the A-share market, the impact of rising oil prices is mixed. On the one hand, sectors like oil exploration, oilfield services, and oil & gas transportation would receive direct earnings support. On the other hand, cost pressures for midstream and downstream manufacturing industries would rise again. More importantly, if oil prices continue to climb, concerns over imported inflation would intensify, potentially indirectly constraining the space for monetary policy easing. Therefore, oil prices are not just a commodity issue—they are a macro variable.

III. Overseas Monetary Policy: October Likely on Hold, but December Remains an Open Question

The Federal Reserve’s FOMC meeting is imminent. According to CME FedWatch data, the probability of rates staying unchanged in October is 90.6%, while the probability of a cumulative 25 basis point hike by December stands at 67.5%. This indicates the market’s current base case is: a pause in October, with a possibility of resuming hikes in December.

Since the October meeting will not release new economic projections, the information content of the rate decision itself may be limited. What truly warrants attention are three details.

First, how the Fed Chair interprets the current pause. If framed as “waiting for more data,” the tone is neutral; if emphasizing “inflation remains above target,” the tone is hawkish.

Second, whether most FOMC members continue to characterize prior hikes as “risk management adjustments”. If this phrasing is retained, it suggests internal consensus for further hikes is not solid.

Third, how many officials dissent in favor of a hike. The number of dissents serves as a direct indicator of internal divergence. If multiple hawkish dissenters emerge, expectations for a December hike would be strengthened.

The impact on A-shares is mainly transmitted through the US dollar index and US Treasury yields. If overseas rate expectations are revised upward, risk appetite for northbound capital may be suppressed, and volatility in high-valuation growth sectors could increase.

IV. Domestic Macro: Growth at the Lower End of Expectations, Stronger Policy Support Needed

Q3 GDP grew 4.5% year-on-year, landing at the lower end of the market’s expectation range. Cumulative growth for the first three quarters was 4.6%, implying that achieving the full-year target requires a significant push in Q4. Structurally, the divergence between relatively strong tech and exports versus relatively weak domestic demand and infrastructure remains prominent.

September industrial value-added grew 5.5%, and exports remained resilient, but the recovery slope for total retail sales of consumer goods was gentle, while fixed asset investment continued to be dragged down by infrastructure. A more notable signal from the monetary side: the M1 growth rate fell, and fiscal spending remained slow. This suggests insufficient monetary activation, with both corporate and household sectors remaining cautious about activating funds.

The practical implication of this combination is: support from the real economy for equity pricing is limited, and the policy side needs clearer and stronger action. If we subsequently see accelerated fiscal spending and improved monetary transmission efficiency, market expectations for fundamentals could be revised upward in stages. Conversely, if policy remains restrained, the upside space for index levels will be constrained.

V. Strategic Implications: Do Not Bet on a Single Direction—Position Around “Certainty”

Taken together, the current market is in a state where multiple variables are intertwined. Policy offers industrial positives, but the repair of macro fundamentals still requires time to validate; externally, there are dual disturbances from oil prices and the Fed; internally, the market faces a rebalancing between growth and policy.

In an environment lacking a single dominant theme, it is not advisable to over-bet on index direction. Instead, structural allocation should center on certainty.

First, the direction of policy certainty. The industrial chain segments corresponding to the AI-employment integration document—particularly companies with actual business implementation capabilities rather than those staying at the conceptual level—merit medium-to-long-term tracking value.

Second, the direction of earnings certainty. Rising oil prices provide support for upstream resource sectors, but attention should be paid to pace and entry positions to avoid chasing highs.

Third, the direction of manageable risk. For high-valuation sectors that are sensitive to overseas rate expectations, position flexibility should be maintained before the Fed’s stance is clarified, waiting for clearer signals before increasing exposure.

Overall, the market this week is likely to remain in a mode of digestion through range-bound trading. Rather than rushing to make directional judgments driven by news, it is more prudent to first establish a clear observation framework: whether policy documents create a new market theme, whether oil prices continue to rise, whether Fed rate hike expectations for December are revised upward, and whether domestic fiscal reinforcement accelerates. Any clear change in any one of these four variables could become the trigger that determines the market’s next directional move.