Negotiations concluded over the weekend, with the US, Iran, and Israel reaching a consensus to blockade the Strait of Hormuz. This is an unprecedented move: you block the strait to collect tolls, and I'm concerned you might not do it effectively, so I'll add another layer of blockade. Even more ironically, on April 11th, Donald Trump addressed American farmers, pledging to reopen the Strait of Hormuz to ensure free navigation, thereby reducing nitrogen fertilizer prices and lowering costs for farmers. Yet, in a turn of events, he joins in blockading the strait. I truly don't understand this move by Trump; it seems he's enraged by Iran's强硬 stance. If it's an open strategy, it's about breaking the enemy's blockade by blockading their blockade. If it's a conspiracy theory, then the US might be trying to accustom capital markets to such actions before suddenly creating a major event. I believe the latter is more likely. US warships cannot enter the strait to land on Halul Island, nor can they bomb and escalate the situation. Blockading the sea route now aims to prevent Iranian crude oil from being exported and earning foreign exchange. However, several issues are hard to explain. First, the proposed toll location is in waters near Iran. Are US warships sure they won't be targeted by Iranian missiles when approaching this area? Second, the relevant waters are already open international seas. Will directly intercepting merchant ships by warships not provoke international disputes? Most importantly, with high oil prices, the latest US CPI has reached 3.3%. Can the US really withstand continuing high oil prices? Many might argue that the US is an oil-producing country, so why fear high oil prices? Can't it stabilize prices itself? This is a practical issue. Although the US has abundant oil, its extraction costs are high, and the oil quality is difficult to refine. After the shale revolution, the US primarily produces light shale oil, but most domestic refineries are designed for heavy crude oil, leading to a capacity mismatch. New investments would require significant capital. In contrast, importing heavy oil from neighboring Canada or the Middle East is not only cheaper but also more suitable for refineries, which is how the US has operated for years. Beyond cost considerations, the US also uses oil as a bargaining chip for national security. For decades, the US has maintained the world's largest strategic petroleum reserve, storing hundreds of millions of barrels of crude oil. It has built a vast energy trade network across the Middle East, Latin America, and North America. For instance, imports from Canada and Mexico aim to solidify North American economic integration, while buying oil from Saudi Arabia and Iraq helps maintain alliance relationships. Even if the US doesn't lack oil, it won't easily cut these imports, as doing so would weaken its influence in these regions. Moreover, the oil the US sells to allies isn't arbitrary; it's not just to manage energy surplus but, more importantly, to make allies dependent on US energy, thereby making it harder for them to deviate from the US orbit. The only risk in the US's crude oil strategy is Iran. However, Iran is a tough nut to crack. The US has considered action before, and Israel has mobilized multiple times, but no US president has directly intervened—until Trump's current involvement, leading to the present situation. Historically, when US military engagements became difficult to conclude, negotiations occurred alongside fighting, lasting at least two to five years. It's uncertain how long this will last. Turning to capital markets, jokes circulated yesterday about whether the A-share market would also set up a "4,000-point toll booth" today. Many likely anticipated this over the weekend, but today's market performance exceeded most expectations, with major A-share indices closing in positive territory. Is this surprising? This aligns with our assessment that "the worst time has passed." The market is gradually becoming desensitized to external news and returning to its fundamentals. The core pricing logic now revolves around the US and Iran negotiating while fighting, with relatively high oil prices persisting, leading to a reassessment of sector logic. Sector-wise, today's gains in energy metals were mainly in lithium, driven by dual demand from energy storage and new energy vehicles. CATL's market cap is approaching 2 trillion yuan. Oil and gas extraction benefited from high oil prices. Components and CPO rose due to AI hardware demand and anticipation of Q1 earnings. The market will likely continue to focus on three themes: technology, oil prices, and Q1 earnings. Some may not understand the rise in aquaculture stocks, given the sector's losses. This implies a cyclical reversal logic. Intensified losses mean increased short-term slaughter volumes, accelerating the exit of small and micro capacities, while larger firms with stronger risk resilience can benefit from the cyclical upturn. High oil prices will eventually transmit to agricultural products, raising breeding costs and accelerating capacity reduction, creating new expectations from high oil prices. Additionally, photovoltaic stocks saw intraday movements, not due to surging demand but rumors about polysilicon capacity controls. Data shows polysilicon prices have returned to historic lows after a rebound on reserve-buying rumors last year. Post-market, the rumors were debunked. Chasing such news might lead to losses from quantitative trading. This analysis isn't overly optimistic about future market developments but indicates that the market will likely continue its institutional-driven trend for now. Lastly, with the launch of the ChiNext's fourth listing standard, many companies are preparing IPOs. If the number of listings increases significantly, liquidity conditions will need monitoring. The A-share market may increasingly trend towards structural行情.
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