After the epic rise in China's stock market, the sustainability of the market's future has become a focal point of market attention. In addition to the much-anticipated National Development and Reform Commission (NDRC) press conference tomorrow, what other policy directions and data should investors pay attention to?

Citi believes that the changes in fiscal deposits, household deposits, and monetary growth should be the focus. Goldman Sachs analysts believe that the premise for the sustained rebound of the stock market is that the growth rate of M1 needs to exceed that of M2.

Minsheng Securities stated that whether policy efforts can stabilize the fundamentals is the key to the continuous improvement of market expectations, and it is highly likely that fiscal follow-up will occur after the holiday. GF Securities emphasized that the key to determining whether this round of market movement is a one-off event or the starting point of a bull market lies in December.

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Citi: Focus on three things; Goldman Sachs: M1 growth rate needs to exceed M2

Citi stated that the data on new loans and new social financing scale in September may remain stable, and there may be no room for upward movement in the monetary base growth. However, credit data may still provide initial clues for stimulus policies through detailed changes. Investors need to closely monitor three things.

1. Fiscal policy: The issuance of government bonds is important, but changes in fiscal deposits are even more important. Exhausting the annual approved quota is a necessary condition for revising the budget, and fiscal deposits help to quantify the deployment of funds.

2. Households: The focus is on deposits. With the strong rebound in the last week of September, it will be interesting to observe how household deposit figures evolve.

3. Monetary growth: It is expected that there will not be much room for upward movement in September, but if an upward trend emerges, the growth of both M1 and M2 may echo the deployment of fiscal policy.Analyst Borislav Vladimirov also emphasized that for the stock market rebound to be sustained, the growth rate of M1 must exceed that of M2. The August social financing data shows that the M1 money supply continues to decline, and the negative spread between M1 and M2 growth rates has further widened.

Minsheng Securities: It is highly likely that fiscal policy will follow up after the holiday

Minsheng Securities' Tao Chuan stated that whether policy efforts can stabilize the fundamentals is the key to the continuous improvement of market expectations. The press conference held by the National Development and Reform Commission after the holiday is just a continuation, and subsequent press conferences by other economic ministries such as the Ministry of Finance are also worth looking forward to.

Furthermore, the certainty of the Federal Reserve's interest rate cut cycle combined with the uncertainty of the U.S. elections implies that the current domestic policy shift will neither come to an abrupt halt nor be achieved in one step. The policy rhythm before the holiday was not pulse-like, and it is highly likely that fiscal policy will follow up after the holiday.

GF Securities: The key to victory lies in December

GF Securities' Liu Chenming stated that in the past five trading days, the main broad-based indices and style indices of A-shares have risen by about 25%, which is an overall valuation lift, and the speed is quite rare. As for whether this wave of the market is a one-time event or the starting point of a bull market, Liu Chenming believes that the key to victory lies in December:If the fiscal tone for the year 2025 is positive and upward, investors can look forward to a bull market in line with the economic cycle. After a recent rapid rebound, the overall A-share market (excluding financial, oil, and petrochemical sectors) has returned to a 2.2X price-to-book (PB) ratio, with a trailing twelve months (TTM) return on equity (ROE) of around 7.4%.

Should the fiscal tone for 2025 be positive (with a significantly increased target deficit rate), it is quite likely that expectations for a rise in ROE will emerge, similar to what has happened in the past four instances. In such a case, A-shares can still be regarded as growth stocks, and the current PB ratio would still be at the bottom, suggesting that December could mark the beginning of a bull market for cyclical assets.

If the fiscal tone for 2025 remains neutral, the market may switch back to dividend-paying assets.

In other words, if the Central Economic Work Conference at the end of the year does not make a clear adjustment to the fiscal tone for the following year, the current valuation level of the overall A-share market (excluding financial, oil, and petrochemical sectors) at a 2.2X PB ratio may not be undervalued. The market could shift back to dividend assets with a ROE in the 10-14% range (the middle circle) and a reasonable PB ratio.