East Money: Tariff turmoil resurfaces, risk appetite declines in the short term

According to the Zhitong Finance APP, the strategy team led by Chen Guo at Eastmoney released a research report stating that there are certain signs behind Trump's threat to impose tariffs, but overall it still exceeds market expectations, impacting short-term market preferences. Meanwhile, there is still potential for further evolution and changes in subsequent China-U.S. negotiations. The market may quickly price in the impact of tariffs on risk preferences and gradually stabilize, entering a phase of oscillation and accumulation. Structurally, sectors that are relatively stable in the short term and those benefiting from policy expectations are favored, while technology growth remains the main line in the medium term. Key industries to focus on include: banking, utilities, military industry, semiconductors, new consumption, non-ferrous metals, and agriculture, forestry, animal husbandry, and fishery. Themes to pay attention to include: self-controllable, controllable nuclear fusion, and commercial aerospace.

Tariff Storm Resurfaces, Short-term Risk Preference Declines

On the evening of October 10, Trump threatened to impose a 100% tariff on all products from China starting November 1, and to implement export controls on key software. There are certain signs behind Trump's threat to impose tariffs, but overall it still exceeds market expectations, impacting short-term market preferences. Meanwhile, there is still potential for further evolution and changes in subsequent China-U.S. negotiations. The market vividly remembers the V-shaped recovery after the tariff shock in April 2025. Unlike then, the current market has accumulated six months of gains, with profit-taking, including margin trading or leverage levels, having increased.

The Chen Guo strategy team believes that May 2019 also has certain reference significance. At that time, the market quickly adjusted and then oscillated and gradually rose. Comparable reasons include: 1) Market positioning is similar, having experienced significant gains before the tariff increase; 2) The reality of the fundamentals is similar to expectations, with exports to the U.S. having clearly declined, and the marginal impact of tariffs weakened; 3) The preparedness for trade friction is similar, having experienced repeated tariffs in 2018 and 2025; 4) The policy environment is similar, with the intensity of policies marginally weakening; 5) The industrial cycle position is similar, both at the starting point of a new round of technological innovation and industrial upgrading.

Calendar Effect Combined with Tariff Shock, Q4 Style Rebalancing

In Q4, there is a tendency for a switch in dominant industries and styles. Since 2009, sectors that have risen in the first three quarters typically struggle to maintain excellent performance in the fourth quarter, which may be related to the preference for profit-taking at year-end.

At the same time, Q4 also has two typical allocation rules: focusing on "stability" and laying out the main line of prosperity for the next year. Referring to Q4 2021, the "dual carbon" policy correction, frequent catalysts for new themes such as the metaverse, and the rising prosperity of the military industry, the growth sectors shifted from new energy to media, communications, and military industry. The Chen Guo strategy team believes that the current policy support for artificial intelligence+ has not changed, with more themes such as controllable nuclear fusion, low-altitude economy, commercial aerospace, and quantum communication frequently catalyzing. In the absence of further clarification on stable growth policy signals, Q4 2025 is more likely to see short-term stability sectors and those benefiting from policy expectations relatively favored under tariff shocks, while the subsequent rebalancing will still be within growth sectors (such as semiconductors, military industry, AI applications, etc.) and moderately spill over to sectors with independent prosperity support (such as new consumption, non-ferrous metals, etc.)