Guotai Haitong: Focus on energy and industry trends; recommends overweight on A-shares, US stocks, Japanese stocks, and government bonds.

Guotai Haitong released a research report stating that energy prices and AI industry trends remain the main variables affecting global market risk appetite and asset performance. Given the significant uncertainty surrounding the Middle East situation, continuous attention should be paid to its impact on energy prices and global liquidity. It recommends overweighting A-shares, US stocks, Japanese stocks, and government bonds. From a macro perspective, policies to stabilize the market provide support, and the systemic downside risk for A-shares is limited. From a trading perspective, the earlier correction has released some pessimistic sentiment, and the cost-effectiveness of further pessimism has declined. Recently, the percentage change in stock index prices and the percentage change in stock trading value have declined in tandem, with the trading change indicator approaching the two-standard-deviation-below-historical-mean region (close to the 2024 "924" level). Current allocation should focus on capturing the rebound window, while subsequent observation is still needed on whether trading volume can continue to recover and whether the index can stabilize, in order to confirm the strength and sustainability of the rebound. Guotai Haitong's main views are as follows: Equities: (1) Key levels may provide a tactical allocation window; recommend overweighting A-shares. From a macro perspective, policies to stabilize the market provide support, and the systemic downside risk for A-shares is limited. From a trading perspective, the earlier correction has released some pessimistic sentiment, and the cost-effectiveness of further pessimism has declined. Recently, the percentage change in stock index prices and the percentage change in stock trading value have declined in tandem, with the trading change indicator approaching the two-standard-deviation-below-historical-mean region (close to the 2024 "924" level). Current allocation should focus on capturing the rebound window, while subsequent observation is still needed on whether trading volume can continue to recover and whether the index can stabilize, in order to confirm the strength and sustainability of the rebound. (2) The US economy is relatively resilient and relatively lightly affected by geopolitical shocks. Corporate earnings expectations may still support the US stock market's central tendency to move upward in a range; recommend overweighting US stocks. Although recent Middle East geopolitical uncertainty and concerns about Federal Reserve independence have marginally tightened investors' global macro liquidity expectations, benefiting from strong corporate earnings and AI industry trends, US stocks have been relatively insensitive to fluctuations in macro liquidity expectations. The micro trading structure of US stocks has been solidified after the correction, valuations are relatively reasonable, and further downside space may be limited; volatility will provide "buy the dip" allocation opportunities. (3) Global AI demand expansion is expected to incremental earnings through industrial chains such as semiconductor equipment, electronic materials, and precision manufacturing; recommend overweighting Japanese stocks. Although macro liquidity and inflation expectations disturb equity valuations, the AI industry trend is still developing strongly, and objective demand for related equipment is conducive to enhancing the incremental earnings of Japanese stocks. Bonds: (1) Financing demand and credit supply remain unbalanced, and high volatility in capital markets enhances the cost-effectiveness of bond allocation; recommend overweighting government bonds. Against the backdrop of economic and risk appetite recovery, although financing demand and credit supply remain unbalanced, the supply-demand relationship is improving marginally; recent high volatility in global capital markets has relatively improved the cost-effectiveness of government bond allocation. (2) US economic resilience remains, and investors may repeatedly revise macro liquidity expectations; recommend underweighting US Treasuries. US economic resilience remains, inflation stickiness is strong, and geopolitical uncertainty shocks may cause investors to repeatedly revise expectations for Federal Reserve monetary policy and global macro liquidity; the Federal Reserve's rate hike as scheduled demonstrates its independence and determination to control inflation, but against the backdrop of uncertainty in Middle East geopolitics, the downside space for US Treasury yields is limited, with high-level range-bound trading highly likely, and allocation cost-effectiveness lower than that of risk assets. Commodities: (1) The trend of improvement in the micro trading structure is weakening; recommend neutral weighting on gold. Repeated revisions of global macro liquidity expectations may periodically shock gold prices, the trend of improvement in the micro trading structure is weakening, and the tactical allocation value of gold may be at a neutral level among major asset classes. (2) Geopolitical disturbances may boost the central level of global oil prices; recommend neutral weighting on crude oil. (3) High interest rates and inflation expectations may periodically suppress the central level of industrial metal prices; recommend neutral weighting on industrial metals. The expansion of AI computing power has brought new demand for industrial metals, but US Treasury yields are elevated and still trending upward, and inflation expectations will also periodically suppress the central level of industrial metal prices and exacerbate their volatility. Risk warnings: Analytical dimensions have limitations, model design is subjective, historical and expected data have deviations, quantitative models have limitations, and geopolitical uncertainty exists.