Guotai Junan Securities: Uncertainty settles before the Dragon Boat Festival, a new round of stock market upswing window opens in China.

Guotai Junan Securities believes that in the past one or two weeks, some investors have doubts about the situation between the US and Iran, the inflation situation, and whether the Fed will raise interest rates. Guotai Junan is a strong supporter of the Chinese market, and uncertainties will gradually be resolved before the Chinese Dragon Boat Festival, opening a new window for the Chinese stock market to rise: 1) Decrease in uncertainty: In June, international oil prices fell to the range of 80-90 US dollars per barrel, and the US inflation and tightening expectations may reach a peak. With the cooling of the war and improved aviation, inflation expectations are expected to decrease in the future. In addition, the Fed's interest rate decisions will also be made before the Chinese Dragon Boat Festival. 2) Upgrade in growth expectations: Strong Chinese export data in May not only respond to market doubts, but also indicate an improvement in A-share interim reports. It reflects the huge demand for global AI capital spending and energy transformation, as well as shortages in the industrial chain. The latest progress of Anthropic's AGI is expected to boost expectations for the boundary and application demand of AI capabilities. This also brings historical opportunities for Chinese industrial innovation, catch-up, and global competition. 3) Incremental market resonance: Risk-free returns are falling, creating continuous wealth management needs and stronger support for the Chinese market. A new round of enhanced capital market inclusiveness reforms is imminent. In addition, announcements of reduced holdings, private equity filing and public offering approval acceleration since June are expected to form substantial incremental market capacity after the Dragon Boat Festival. Absolute return equity allocations before and after the mid-year assessment in June may also return, helping with structural diffusion and market balance. Following a brief "rainstorm", the Chinese market is expected to perform well in the third quarter and may reach new highs.