October has been a somewhat disappointing month. We see the SSE Index slipped below 3000 and China PMI fell back to the 50 range, which pointed to weak growth momentum in the near term. Nonetheless, we think market risks released during October and we have seen several improvements in both foreign and domestic markets toward 2024. 

For global market, we have already seen the ten-year U.S. Treasury bond yields peaked at 5%. Most major DM central banks are likely finished hiking, which will ease the pricing pressure on EM market assets. Also, we noticed the Sino-U.S. relation stabilized. Partial cooperation happened in specific areas. We expect both countries will enhance communication in terms of monetary and fiscal policies in the following quarters.

In China, we expect a gradual economic recovery with a series of domestic stimulus policies. The central government issued 1 trillion yuan in bonds in October, and we expect the central government to step up easing materially in coming months.

We think despite the multi-year economic slowdown, China's industrial chain advantages remain. Companies will maintain a mid-teen growth. Also, we expect after a significant fall, the valuation of risk assets will recover at the end of interest rate hike cycle.