Talking about the 26 year market outlook, the core logic of the personal perspective is: Trump's policy support, AI development determines the upper and lower limits of the market, the economic trend is occasionally disturbed, and the changes in mid-term elections have a great impact on expectations. How should we understand it? 1. Trump policy support The most important thing for Trump in 26 years is the mid-term election, which determines the control of the Senate and the House of Representatives and also determines whether Trump will become a lame president two years after his term of office. The Democratic Party's big victory in the elections in New York, New Jersey and Virginia in early November was a wake-up call to Trump. The biggest part of the significant decline in its approval rating is the public's dissatisfaction with inflation and prices. So the slogan of Trump in the past 26 years should be "Make America Available Again" Affordable life, Trump and Besant have said many times before. From this perspective, what Chuanbei Combination is currently doing or about to do is: 1) Exemption of agricultural product tariffs has already been granted, and in the future, tariffs on goods highly related to inflation may be exempted; 2) Propose a tariff dividend check (subject to the Supreme Court's ruling on the highest tariff) and a children's stock account; 3) 26 years of great beauty answers have been implemented, in addition to the tax reduction policy of the 2018 TCJA Act, there has been a significant reduction in tip tax and overtime pay tax, as well as a tax deduction for corporate capital expenditures; 4) Reduce international affairs and shift focus back to domestic and American affairs. Reorganizing the backyard, capturing Maduro last weekend was to gain control of crude oil, increase oil production, and cater to MAGA's basic market with the progress of illegal immigration and drug issues. Trump's policy in 26 years focused on the mid-term elections, with the core goal of stimulating the economy and reducing inflation. Wanting to do is one aspect, achieving it is another aspect. Let's first see what he wants to do. The action is to continue with the big budget 2. The Federal Reserve's 26 year policy should be viewed in the context of fiscal and monetary integration 1) It is highly likely that the new Federal Reserve Chairman will be announced in January 2) It is expected that there will be about three more interest rate cuts overall (probably only one or none in the first quarter), with a possibility of interest rates of 2.75-3%. However, the marginal utility of interest rate cuts actually gradually weakens, as each cut brings us closer to the endpoint of stopping interest rate cuts. Even on Hassett, radicals would not say they are so extreme that they continue to decline. 3) Reserve management purchases of RMP will continue, and bank reserves can be seen to rise to over $3.2 trillion in the first quarter. https://(((((x.com)))))/qinbafrank/status/1996775737500844405? s=46&t=k6rimWsEbo2D2tXolYcM-A 4) The more important focus of the Federal Reserve in the 26th year is the unbinding of the banking industry, releasing capital to encourage banks to lend, and allocating long-term bonds is also a means to lower long-term bond yields. https://((((x.com)))/qinbank/status/2006564661702045802? s=46&t=k6rimWsEbo2D2tXolYcM-A So the Trump policy and the rhythm of the Federal Reserve have provided a foundation for the market in 26 years, but whether it can be effective depends on the development of AI. 3. The development of AI determines the upper and lower limits of the market Previously, there were three major debates on AI: https://(((x.com))/qinbafrank/status/1988826907534860695? S=46&t=k6rimWs Ebo2D2TXolYcM-A As we talk, the deeper the industrial transformation, the more players will fall behind, and the market will also fall behind. The higher the market expectation, the greater the need for stronger performance beyond expectations to support it. The highlights of AI development in the past 26 years lie in: 1) The capital expenditure of big technology will continue, but will some players start to be cautious on capex; 2) Can the performance of AI mainline companies consistently exceed expectations by a large proportion during each financial reporting season; 3）agent、 Is there enough explosive progress in the application of robots and other AI; If there is, it will continue to push up the upper limit of the US stock market, If not, lower the market ceiling and even drive the market into a stage of killing valuation and even performance. 4. Occasional disturbances in economic trends As discussed in the third part, AI capital expenditure will continue in the year 26, with AI investment accounting for 1% of GDP in the year 25 and even higher in the year 26. If the investment in AI infrastructure does not slow down, the GDP growth rate of the United States will not be poor. But the more AI develops, the worse the labor market should be. There is a high probability that the unemployment rate will continue to rise, as Minneapolis Fed President Kashkari recently stated that there is a risk of a surge in the unemployment rate. The higher the surge, the higher the market recession concerns. This is also a cause of disturbance to the economic trend 5. Changes in the mid-term election situation affect expectations As I mentioned earlier, the mid-term election may become the top priority of Trump in 26 years, but whether he can win depends on the effect of the policy. But we have to pay attention to the laws of history, after all, in the midterm elections since the founding of the United States, the probability of the current president's party losing the midterm elections (i.e. losing control of one or both houses of Congress) is very high. There were only a few exceptions, such as George W. Bush in 2002 and Clinton in 1998, but they all had their own peculiarities. 2002 was due to the previous 9/11, and 1998 was a period of economic prosperity during the Clinton era. There is an implicit logic here: centrist voters in the United States often believe that they are the balancing force of American politics. If politics is too left, they will turn right, and if it is too right, they will turn left. Unless it is Trump's policies that have really played a significant role, the economy is booming and inflation is significantly lower. So as the midterm elections approach, market expectations will change quickly. Especially if it is expected that the Republican Party will lose the midterm elections, the market volatility will be significant. Because once Trump loses control of both houses of Congress, it means that many policies of 25 and 26 years will be pushed back again, the effect of policy support will be greatly reduced, the market will have to recalibrate expectations, and recalibration of expectations is likely to bring about a wave of adjustment. 6. 26 years of geopolitics In G2 forming https://(((x.com))/qinbufark/status/1997526071760355673? In the context of s=46&t=k6rimWs Ebo2D2TXolYcM-A, the game between China and the United States is the core geopolitical theme. At present, the Sino US trade war has reached the truce. Trump is also likely to visit China in April this year, which is a honeymoon period of the truce. The ceasefire period will last for one year until November this year, and the closer it is to the end of the ceasefire period, the greater the friction is expected. So overall, the macro level of 26 years is: "Trump's policy support, AI development determines the upper and lower limits of the market, economic trend is occasionally disturbed, and expected changes in mid-term elections affect expectations" The market as a whole should be fine in the third quarter and before, and more cautious in the future, but the volatility will not be less. But be cautious that if AI falls short of expectations and the Republican Party loses in the midterm elections, it will bring at least a mid-level adjustment to the market. The road is taken step by step. As we discussed yesterday, whether the opening year market can evolve into a spring market, we still need to go through the test of mid to late January. https://((((x.com)))/qinbafrank/status/2008176805170335841? s=46&t=k6rimWsEbo2D2tXolYcM-A