Markets have recovered from a period of high-level consolidation and sector rotation, closing last week with a renewed stylistic shift. The Shanghai Composite Index gained 1.20%, with previously weakening large-cap blue chips regaining strength and low-position small caps staging a catch-up rally. The ChiNext Index fell 3.42% to lead declines, while the STAR 50 edged up just 0.52%. The telecommunications sector, which had previously led gains independently, saw the steepest pullback, while agriculture, coal, and non-bank financials led the advance.
Average daily turnover continued to contract to 1.99 trillion yuan, with ETF funds first buying on dips and then taking profits, while margin financing shifted to net purchases of around 10 billion yuan. The initial phase of low-position counterattacks has landed. Looking at catalysts and timing, enthusiasm for themes such as AI liquid cooling, testing equipment, new computing power technologies, and consumer electronics new product launches is expected to heat up.
Based on market conditions, catalytic factors, and comprehensive quantitative indicators, we recommend focusing on the four major themes mentioned above. According to simulations from our previous recommendations, since the launch of the Bi-Weekly Theme Portfolio on January 13, 2025, and as of August 28, 2026, the composite return of the portfolio index within the backtesting period has reached 200%.
Market Overview: Liquidity continued to retreat, with average daily turnover last week falling to approximately 1.99 trillion yuan, a decrease of about 278.4 billion yuan from the previous week, further underscoring the characteristics of shrinking volume and consolidation. On the external front, the U.S. core PCE rose 0.25% month-over-month in July and 3.34% year-over-year, slightly above expectations, though headline PCE declined to 3.7% year-over-year, with most inflation indicators still pointing to a moderate cooling trend.
On the domestic front, implementation of existing policies has accelerated notably following the July Politburo meeting. Last week, the National Development and Reform Commission convened coordination meetings for the "six-network collaboration" and a national investment work advancement meeting, demanding faster issuance and use of local special bonds and prompt deployment of the 800 billion yuan in new policy-oriented financial instruments to quickly generate tangible work output. The Ministry of Finance has clarified that over 2 trillion yuan in special bonds and ultra-long-term special treasury bonds remain to be issued in the second half of the year.
Key Event: The Ministry of Industry and Information Technology has outlined a roadmap for new industrialization during the "15th Five-Year Plan" period. On August 26, 2026, the State Council Information Office held a press conference where the ministry detailed plans for advancing new industrialization. The ministry stated that over the next five years, it will accelerate the development of emerging pillar industries, including integrated circuits, aerospace, biomedicine, the low-altitude economy, new energy storage, and intelligent robotics. It also aims to promote future industries such as quantum technology, bio-manufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications (6G) as new economic growth drivers.
Catalyst: Apple's 2026 autumn product launch is scheduled for 1 a.m. Beijing time on September 10 at the Steve Jobs Theater in Apple Park. This marks the first major product event under new CEO John Ternus, signaling the official start of a brand-new product iteration cycle. Departing from previous years' full-lineup releases, this event adopts a strategy prioritizing high-end flagship devices. The focus will be on Apple's first foldable phone, the iPhone Ultra, alongside the iPhone 18 Pro and iPhone 18 Pro Max. Entry-level models like the standard iPhone 18 have been postponed to a spring 2027 release, aligning with the initial production ramp-up of 2nm chips to ensure supply for premium flagship products.
Focus Areas: Market conditions indicate a phase of capital rotation among active themes, and we are focusing on themes with high certainty driven by narratives, events, and earnings. This cycle, we recommend themes including AI liquid cooling, testing equipment, new computing power technologies, and consumer electronics product launches.
Risk Factors: Intensification of Sino-U.S. frictions, unexpected shifts in geopolitical conflicts, expanded net capital outflows, policy implementation falling short of expectations, and slower-than-expected progress in AI technology iteration all remain key risks.