CSC Financial: Increased interest rate disturbances, value dividend strategy takes precedence

CSC Financial released a research report noting that this week's A-share market is a typical case of valuation compression driven by the discount-rate side rather than deteriorating earnings. US September CPI came in at 3.7% year-on-year and 2.6% core, both exceeding expectations; the 10-year US Treasury yield broke through 5.3% and the 30-year touched 5.73%; the Philadelphia Semiconductor Index fell for six consecutive sessions and the effect transmitted to Japan and South Korea, with high-duration growth stocks undergoing systematic repricing. Among Shenwan Level-1 industries, 2 rose and 29 fell: food and beverage gained 1.89% and banks 1.52% to close positive, while communications led declines at 10.87%, with electronics and computers among the biggest laggards. The allocation recommendation is a barbell strategy that avoids the middle layer: on one end, the high-dividend defensive chain; on the other, domestic-demand consumption and third-quarter earnings certainty; temporarily avoid high-valuation growth.