China's economy and the more traditional sectors in the equities market may face further pressure before conditions get better, Julius Baer analyst Richard Tang says. Investors appear to have low expectations for any stimulus measures from Beijing aimed at reviving domestic demand, as policymakers are focused on boosting artificial-intelligence development and strengthening economic security instead, he says. Tang expects the divergence between the real economy and the stock market to persist. AI infrastructure trades will maintain their outperformance in 2H while non-AI firms, including legacy internet companies, will likely see continuing weakness. "We believe the earliest timing for old technology [stocks] to catch up in performance will likely be 4Q," he adds. (jason.chau@wsj.com)