On October 28, CITIC Securities issued a research report offering insights into the market outlook following the U.S. midterm elections. The report highlighted that while the rapid advancement of AI has fueled notable growth in the U.S. economy, there exists a disparity in performance across various economic sectors. Specifically, production and financing sectors are experiencing overheating, whereas the employment and household sectors remain comparatively subdued. Consequently, the Fed’s monetary policy decisions may lean more towards political considerations rather than purely economic ones, with Warsh possibly collaborating with the Treasury to curb long-term interest rates. Following the midterm elections, a decrease in market uncertainty is expected to offer short-term advantages for risky assets; however, political polarization could introduce fresh disruptions. The report outlines three potential allocation scenarios: In the baseline “hot continuation” scenario, U.S. stocks, gold, and A-shares are projected to perform well, while government bonds are expected to underperform. In the “cold spread” scenario, U.S. bonds, gold, and A-shares are anticipated to lead. Notably, gold emerges as a consistently bullish asset across multiple scenarios.