To The Moon

I. Performance of Global Equity Indices (in US Dollar)

Source: Bloomberg, Tiger Brokers

Key Highlights

◼ Last week, US equities edged higher amid the US-China ceasefire and strong tech earnings. The two sides reached a one-year trade truce, easing macro uncertainty and providing more stable expectations for corporate profits and investment. In addition, the Fed delivered the widely-expected 25bp rate cut and announced the end of QT. Although Powell's tone was slightly hawkish, the overall stance remained accommodative - he believes inflation is approaching target and the labour market is cooling gradually. Meanwhile, the four major tech giants generally beat expectations, driving upward revisions to S&P 500 earnings forecasts. While elevated Al capex raised concerns about short-term returns, the medium- to long-term secular growth path of the tech revolution remains intact.

◼ In Greater China, China's flexible concessions in areas such as rare earths, agricultural products, and fentanyl pushed the US to roll back part of its export controls and tariffs, effectively solidifying a "G2" global power structure. This progress meaningfully reduced extreme tariff scenarios and set the stage for foreign investors to re-rate Chinese assets. Meanwhile, recent GDP, industrial production, and retail sales data have been relatively resilient. The overall economic structure is characterised by "stable manufacturing, consumption recovery, and technology acceleration." Over the next year, market performance will likely shift from valuation-driven to earnings-driven. Cyclicals and value sectors may gradually take the lead, with sector rotation set to be the main theme.

◼ Key focuses this week include AMD and Qualcomm earnings, as well as when the US government will end its shutdown and release macro data.

II. Key Market Themes

U.S. Equities: Powell's hawkish tone doesn't change the essence of policy easing — Al remains the core driver

Last week, the S&p 500 and Nasdaq traded in a choppy but slightly higher range, driven by macro expectations, policy shifts, and earnings delivery. First, following the meeting between US and Chinese leaders, the two sides agreed on a one-year trade truce and showed goodwill in key areas. China suspended the upgrade of rare-earth export controls, while the US paused the implementation of the semiconductor export "look-through" rule. These reciprocal concessions helped ease uncertainty around tariffs and supply chains, providing a more stable environment for capital investment and corporate profits in the US, while also helping to offset tariff-driven inflationary pressure.

On monetary policy, the October FOMC meeting cut rates by 25bps as expected and announced a halt to quantitative tightening. However, Powell struck a hawkish tone in the press conference - he pushed back on the market view that a December rate cut is a given, and reiterated the "data-dependent" policy framework. As a result, market pricing for a December cut dropped from 95% to 65%. At the same time, Powell argued that although headline inflation still looks elevated, core PCE is only 2.3%-2.4% after excluding one-off tariff effects — trending favourably and nearing the target range. Employment is more critical in his view: labour markets are cooling gradually, but there is no sign of a cliff-type deterioration. We believe a slower pace of rate cuts does not change the direction of policy easing. While missing data due to the government shutdown is an uncertainty, labour cooling plus Al-driven labour substitution still support further easing.

Source: Bloomberg, Tiger Fund Management

Meanwhile, tech continues to dominate the market narrative. The four mega-cap tech giants posted revenue and profit well above expectations in 3Q, prompting Wall Street to revise up full-year S&P 500 earnings growth to 11.2%. Still, rising Al capex has reignited concerns about ROl. We believe Al investment may compress margins in the short term, but structurally, capital deployed into compute, data and models is building competitive moats for the AGI era. Overall, the US equity market is caught in a tug-of-war between "policy easing expectations vs earnings delivery" in the short term - but the medium- to long-term core thesis centred on the Al value chain remains intact.

Greater China: Style Rotation as the Bull Market Enters Its Next Stage

Following last week's meeting between Chinese and U.S. leaders, both sides reached a one-year trade truce agreement. China agreed to temporarily ease rare earth controls, strengthen measures against fentanyl, and make moderate concessions in non-core sectors such as agriculture. In return, the U.S. withdrew the 50% "penetration rule" in its export controls and rolled back part of the previously imposed tariffs. More importantly, this marks a phase of relative stabilization and recognition of the G2 framework. The outcome has significantly reduced the probability of extreme tariff scenarios and laid a stronger foundation for both domestic and international investors to revalue Greater China assets— especially for those viewing the market through a "steady bull" lens.

On the macroeconomic front, the October PM data further supported this constructive outlook. The official NBS Manufacturing PMI came in at 49.0, still slightly below the expansion threshold, reflecting that recovery in some traditional heavy industries is ongoing. However, the RatingDog Manufacturing PMI registered at 50.6-slightly lower than the previous reading and expectations but still in expansionary territory-indicating continued resilience among private and export-oriented manufacturers, with orders and production activity still expanding. Combined with stronger-than-expected Q3 GDP, industrial output, retail sales, and exports, the overall Greater China economy shows a healthy structure characterized by stable manufacturing, recovering consumption, and accelerating technological momentum.

Under this macro and policy backdrop, the current bull market in Greater China is increasingly structural and gradual in nature. On one end are high-growth sectors that have already priced in optimism through valuations and share prices but now face earnings realization pressure; on the other are cyclical industries such as industrial metals and construction machinery, which remain at the bottom of the cycle but exhibit strong earnings elasticity; and finally, domestically driven consumer and service sectors, still at low valuation levels, are expected to recover alongside improving income and demand expectations. We believe that following the phase-one trade truce and the clear reduction in external uncertainties, Greater China corporates still have room for earnings growth next year. However, sector rotation and style shifts will become increasingly pronounced. The sectors that truly benefit from real expansion and improving profitability will be the key focus in the next stage of this market cycle.

Source: Bloomberg

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