CICC's 2026 outlook: Weak dollar cycles drive global economic resonance repair, combined with long-term domestic and foreign financial support, will boost A/Hong Kong stocks

The Zhitong Finance App learned that CICC released its 2026 outlook, stating that the weak US dollar will drive the restoration of global economic resonance and drive improvements in domestic export growth and profits. Global monetary policies and liquidity tend to be relaxed, boosting the valuation of Hong Kong A shares. At the same time, more global capital flows to emerging markets with higher growth elasticity in order to seek higher returns. Under the influence of a weak dollar and domestic policies, we believe that the entry of more overseas capital and long-term capital into the market is expected to boost A-shares from the capital side. From a structural point of view, the “new economy” represented by technology and going overseas is expected to continue to perform in terms of fundamentals and returns. Furthermore, driven by the expansion of domestic demand, anti-domestic demand, and overseas demand, profits of domestic enterprises may have improved, driving domestic demand sectors such as consumption to make up for growth.

CICC's main views are as follows:

Since 2025, the Trump administration's policies such as DOGE, equal tariffs, and the crackdown on illegal immigration have continued to impact, dragging down the recovery of America's nominal economic cycle. Entering 2026, pressure on the midterm elections may force Trump to soften his foreign policy, shift the focus of administration domestically, and substantially promote fiscal and monetary easing and financial deregulation. CICC expects that a broad fiscal and monetary environment will effectively mitigate the three major sticking points that constrain the US economy in 2025, namely negative shocks hampering confidence, slow expansion of small businesses dragging down terminal demand, and weak demand for home buyers dragging down real estate investment. Meanwhile, the relaxed credit environment will continue to support this year's impressive AI and reindustrialization-related investments.

Therefore, CICC believes that the technology, industry, and resources sectors that performed well in the US stock market in 2025 are expected to continue to lead in 2026, while the consumer and finance sector, which is being dragged down by US domestic demand, may make up for an increase in the nominal cycle. As the Federal Reserve begins normalized expansion after the FOMC in December, the liquidity of the US dollar is likely to gradually loosen next year. Together with fundamentals that are expected to recover, it supports global risk assets, and is particularly beneficial to emerging markets, as well as the gold, silver, and copper that are in line with inflation and the liquidity of the US dollar.

If the US dollar weakens, the RMB may still have room to appreciate. Recently, the appreciation of the RMB against the US dollar has accelerated, driven by rising expectations of interest rate cuts by the Federal Reserve and a peak in domestic settlements at the end of the year. Under Trump's “big reset,” the US currency is in line with finance. CICC believes that the US dollar will trend to have abundant liquidity, and the US dollar is likely to be in a depreciation channel. In this case, the previously accumulated motivation for foreign exchange funds to be settled may support the RMB.