Sinolink: The new round of HALO transactions or this round of market trends will depend on the situation in the Strait of Hormuz. It is recommended to pay attention to changes in the supply and demand structure of crude oil.

Sinolink released a research report stating that currently, on one side, the continued closure of the Strait of Hormuz has impacted fragile industries globally, and is now influencing the most resilient sectors through monetary policy and political factors; on the other side, the most prosperous industries are spreading their prosperity to traditional industries. If the Strait of Hormuz reopens, the spread of prosperity and economic recovery will create the strongest resonance between global pro-cyclical assets and physical assets, potentially leading to a new round of HALO trading; if the continued closure of the strait eventually leads to a change in monetary policy, it could signal the end of the rebound in global risk assets. Sinolink's main points are as follows: Extreme differentiation brought by fundamentals, looking for the next intersection In the recent market highs and lows, a certain "narrowing" trend has emerged: the proportion of rising stocks and industries is at their lowest since the rebound in April. In extreme differentiation, technology is starting to spread from the mainstream to its upstream and surrounding areas to find directions with less resistance. Behind the market's differentiation is extreme fundamental differentiation: (1) from a market perspective, compared to the CSI Dividend Index, the relative returns of TMT have exceeded levels since the beginning of 2026, and the differences in turnover and turnover ratio between TMT and the CSI Dividend Index have also reached the 99th percentile level since 2011. (2) However, current valuation differentiation is not extreme, not reaching levels seen in Q3 2025, and still has a significant gap compared to historical extremes between 2025 and 2020, indicating that the profitability prosperity of the TMT sector remains an important support for differentiation. The future style interpretation's core lies not in changes in discount rates, but in the trend of fundamental prosperity on the molecular side and whether it spreads. This also means that the diffusion of technology should focus more on the transmission of fundamentals (such as from internal investment chains upstream) rather than logic and thematic rotation (such as shifting to other technology themes). On the other hand, from the perspective of cross-market correlations, the correlation between US stocks, MSCI Global Stock Index, US bond yields, and oil prices has shifted from positive to negative, hinting that considerations of inflation and monetary policy may be coming back into focus. Two gates, to be revealed in June The current market pricing is entering a critical juncture, with two variables worth focusing on: (1) April's FOMC meeting minutes and statements from members, represented by Powell, are leaning hawkish, with markets starting to price in the possibility of the Fed raising rates in 2026, and whether controlling inflation will become a priority after Powell formally assumes the position of Fed Chairman, possibly leading to rate hikes, needs to be monitored continuously. (2) Traffic flow through the Strait of Hormuz is recovering slowly, global supply chain pressures are continuously increasing, and are being transmitted to the manufacturing sector. Delivery times for US and European supply chains in May continue to lengthen, while input costs have also risen significantly, especially with greater pressure on the fundamentals of the European economy. The gates of US Federal Reserve monetary policy and the Strait of Hormuz will intersect in June. If subsequent progress in the strait can lead to openness, it will represent a more positive pricing change for global pro-cyclical assets: US AI investment is spreading to a broader range of manufacturing industries, with signs of bottoming in capital spending by US small and medium-sized enterprises in recent quarters, the opening of the global restocking cycle, together with the upstream demand for technology, could resonate with physical assets, increasing the probability of HALO trading seen in the fourth quarter of last year. It is worth noting that China's relative resilience in exports, benefiting from stable energy supply and supply chain advantages, is worth paying attention to. Structurally, in addition to strong performance in technology products, capital goods exports represented by new energy-related equipment are also eye-catching. On the energy side, China's crude oil import sources are becoming more diversified, and the export share of petroleum products such as fuel oil and kerosene has been increasing since 2010, reflecting the value of China's refining capacity in the global energy supply chain. Of course, another possibility is that the continued closure of the strait may also close the gate of US Federal Reserve monetary policy, potentially causing a potential impact on current pro-cyclical assets. Crude oil: New changes in supply and demand dynamics worth noting amidst US-Iran tensions Unlike the oversupply pattern in the past few years, there are new marginal changes in the supply and demand of crude oil currently, which may push the central price of oil higher. On the supply side: global oil and gas exploration investment has remained low for the past 10 years, at about 42% of the peak in 2013; meanwhile, tensions between the US and Iran have damaged OPEC's production capacity, with little short-term recoverable remaining production capacity close to zero, and the declining number of drilling rigs in the US in recent years meaning that supply restoration may be slow. From the perspective of inventory, global oil stocks are being depleted rapidly, with OECD commercial oil stocks approaching the lowest level since March 2022, and according to EIA forecasts, even if the strait were to reopen, the slow pace of supply restoration could require the depletion of stocks before replenishing them, with OECD commercial oil stocks potentially falling to their lowest levels since 2003. The bank measures oil commercial inventory/oil demand, and even according to EIA's predicted pace of oil replenishment, this value is expected to remain below historical central levels by the end of 2027. At the same time, the fragility of the supply system may lead to a tendency for the global economy to hold more physical assets to enhance its ability to resist risks, with the expected continuation of the replenishment cycle for oil. After June, observe resonance on the physical side In June, the equity market will have answers. The bank recommends the following with an optimistic approach: first, focus on the spread and price transmission of macroeconomic recovery and AI artificial intelligence investments to traditional economic sectors through industrial metals (copper, aluminum, lithium), chemicals (AI upstream materials, refining, etc.), energy replenishment, and other beneficiary categories of the safety inventory construction cycle (oil transportation, dry bulk cargo). Second, the central shift in energy prices (oil, coal, lithium batteries, wind and solar); Third, as the capacity cycle hits bottom, with subsequent global industrial demand recovery expected to see high elasticity in commercial vehicles, power grid equipment, textile manufacturing, and electronic chemicals. Risk Warning: Domestic economic recovery falls short of expectations, overseas economies experience a significant downturn.