According to a research report from Guotai Haitong Securities Co., Ltd. (ASX: 601211), energy prices and AI industry trends remain the primary variables influencing global market risk appetite and asset performance. Given the significant uncertainty surrounding the Middle East situation, it is essential to continuously monitor its impact on energy prices and global liquidity.
The report recommends overweighting A-shares, US stocks, Japanese stocks, and government bonds. From a macroeconomic perspective, stabilizing market policies provide support, limiting the systematic downside risk for A-shares. From a trading perspective, previous adjustments have already released some pessimistic sentiment, and the cost-effectiveness of further pessimism has declined. Recently, the synchronized decline in stock index returns and stock trading volume changes has brought the trading activity indicator close to the two-standard-deviation-below-historical-mean zone, near the level seen during the "924" period in 2024. Current allocation should focus on capturing the rebound window, while subsequent observation is needed to confirm whether trading volume can continue to recover and whether the index can stabilize, in order to verify the strength and sustainability of the rebound.
Guotai Haitong's main views are as follows:
In terms of equities: (1) Key support levels may provide tactical allocation windows, and overweighting A-shares is recommended. From a macroeconomic perspective, stabilizing market policies provide support, limiting the systematic downside risk for A-shares. From a trading perspective, previous adjustments have already released some pessimistic sentiment, and the cost-effectiveness of further pessimism has declined. Recently, the synchronized decline in stock index returns and stock trading volume changes has brought the trading activity indicator close to the two-standard-deviation-below-historical-mean zone, near the level seen during the "924" period in 2024. Current allocation should focus on capturing the rebound window, while subsequent observation is needed to confirm whether trading volume can continue to recover and whether the index can stabilize, in order to verify the strength and sustainability of the rebound.
(2) The US economy shows strong resilience and is relatively less affected by geopolitical shocks. Corporate earnings expectations may continue to support the US stock market's upward trajectory, and overweighting US stocks is recommended. Although recent Middle East geopolitical uncertainty and concerns about Federal Reserve independence have marginally tightened investors' global macro liquidity expectations, strong corporate earnings and AI industry trends have made US stocks relatively insensitive to fluctuations in macro liquidity expectations. The micro trading structure of US stocks has stabilized after adjustments, valuations are relatively reasonable, and further downside potential may be limited. Volatility will provide "buy the dip" allocation opportunities.
(3) The expansion of global AI demand is expected to translate into incremental profits through supply chains such as semiconductor equipment, electronic materials, and precision manufacturing. Overweighting Japanese stocks is recommended. Although macro liquidity and inflation expectations disrupt equity valuations, the AI industry trend continues to develop strongly, and objective demand for related equipment is conducive to enhancing the incremental profits of Japanese stocks.
In terms of bonds: (1) Financing demand and credit supply remain imbalanced, and high volatility in capital markets enhances the cost-effectiveness of bond allocation. Overweighting government bonds is recommended. Against the backdrop of economic and risk appetite recovery, although financing demand and credit supply remain imbalanced, the supply-demand relationship is marginally improving. Recent significant volatility in global capital markets has relatively improved the cost-effectiveness of government bond allocation.
(2) The US economy still shows resilience, and investors may repeatedly revise macro liquidity expectations. Underweighting US bonds is recommended. The US economy retains resilience, inflation stickiness remains 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 hikes in line with expectations demonstrate its independence and determination to control inflation. However, against the backdrop of ongoing uncertainty in Middle East geopolitics, the downside space for US bond yields is limited, and high-level fluctuations are likely. The allocation cost-effectiveness is lower than that of risk assets.
In terms of commodities: (1) The trend of improving micro trading structure is weakening, and neutral allocation to gold is recommended. The market's repeated revisions of global macro liquidity expectations may periodically impact gold prices. The trend of improving micro trading structure is weakening, and the tactical allocation value of gold may be at a neutral level among major asset classes.
(2) Geopolitical disruptions may boost the global oil price center, and neutral allocation to crude oil is recommended.
(3) High interest rates and inflation expectations may periodically suppress the price center of industrial metals, and neutral allocation to industrial metals is recommended. The expansion of AI computing power brings new demand for industrial metals. However, elevated US bond yields with upward trends, along with inflation expectations, will periodically suppress the price center of industrial metals and exacerbate their volatility.
Risk warnings: Limitations in analytical dimensions, subjectivity in model design, deviations between historical and expected data, limitations of quantitative models, and geopolitical uncertainty.
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