Group 1: Domestic Economic Outlook - High oil prices are expected to alter the economic and profit growth patterns in the first half of the year, leading to better-than-expected performance in Q1 but potential downward revisions for Q2[3] - The impact of oil prices on the economy is non-linear; sustained high oil prices will exert more pressure on mid- and downstream profits than the uplift on upstream profits, increasing concerns about "stagflation"[3] - PPI is expected to turn positive year-on-year in March, with May-June potentially marking the peak for the year, enhancing the influence of economic fundamentals on asset prices[3] Group 2: International Economic Factors - The "revival" of the dollar remains a key issue in asset pricing, with the U.S. government aiming to restore dollar credibility through its ties with oil and key minerals[4] - A chaotic geopolitical environment and prolonged high oil price expectations make the dollar index difficult to stabilize; extreme scenarios could lead to a collapse of the dollar system[4] Group 3: Historical Context and Asset Pricing - Historical analysis shows that asset prices often oscillate between "inflation" and "stagnation," making it hard to form a unified trend[4] - For instance, gold performed well during the 1970s oil crises but underperformed during the 2022 Russia-Ukraine conflict due to prior significant price increases[4] - The resilience of the U.S. economy and new trends in the tech sector contributed to stock market gains during the second oil crisis in 1979 and the 2022 conflict[4] Group 4: Weekly High-Frequency Data Overview - The domestic economy shows stability driven by internal demand, with investment outpacing consumption; indicators like high furnace and rebar operating rates remain steady[5] - Trade and freight indicators remain elevated, while second-hand housing transactions show significant divergence across cities[5] - Price trends indicate structural differentiation rather than widespread inflation, with some consumer goods showing weak year-on-year performance[5] Group 5: Upcoming Focus and Risks - Attention will be on the release of the PMI at the end of the month, alongside market expectations for consumption recovery post-Qingming holiday[6] - The trajectory of the U.S.-Iran conflict and its impact on asset prices remains highly uncertain, with potential for increased volatility in asset prices[7]

Market Review - The A-share market showed divergence this week, with the Dividend Index and Shanghai 50 leading in gains, while the North China 50, CSI 2000, and STAR 50 lagged behind. The average daily trading volume remained around 3 trillion yuan, indicating a high risk appetite among investors. The petroleum, telecommunications, and coal sectors led the gains, while defense, power equipment, and automotive sectors lagged. Low-position sectors like real estate and liquor also saw a strong rebound at one point. In the commodity market, precious metals prices plummeted, with silver and gold dropping by 26.42% and 9.25% respectively. The geopolitical tensions between the US and Iran drove international oil prices up, with WTI crude and ICE Brent rising by 7.65% and 7.32% respectively. The US dollar index exhibited a V-shaped trend, with the offshore yuan depreciating slightly against the dollar [1][2]. Market Outlook - The report emphasizes that policy support will continue to drive medium- to long-term capital inflows into the market. Despite signs of a temporary market adjustment amid increasing external disturbances, there remains ample space and opportunities for the current market trend from a mid-term perspective. The net outflow of stock ETFs has adjusted trading rhythms, but overall trading volume remains high, reflecting strong investor interest in high-growth sectors. The regulatory focus is on cultivating "patient capital" and increasing the participation of insurance and pension funds in the market, aiming to solidify the foundation for a slow bull market. The domestic demand showed marginal decline in January, but the recovery in price indices and sustained high growth in high-tech manufacturing create conditions for corporate profit recovery. With the narrowing decline in PPI, corporate profits are expected to enter a mild recovery phase in 2026 [2][4]. Economic Fundamentals - In January, the manufacturing PMI fell to 49.3%, and the non-manufacturing PMI dropped to 49.4%, both below the expansion threshold, indicating a marginal decline in domestic demand. However, improvements in prices and sustained high growth in new economic drivers were noted. The purchasing price index and the factory price index rose to 56.1% and 50.6% respectively, indicating overall price improvement in the manufacturing market, which is expected to narrow the PPI decline further. The high-tech manufacturing PMI remained above 52.0% for two consecutive months, reflecting sustained high growth in new economic drivers, while traditional sectors like consumer goods and high-energy industries showed marginal declines [3][4]. Capital Market Policies - The China Securities Regulatory Commission (CSRC) is committed to consolidating the positive momentum in the capital market and is intensifying efforts to cultivate patient capital and promote medium- to long-term capital inflows. On January 30, CSRC Chairman Wu Qing held a meeting to discuss enhancing the adaptability of regulatory frameworks, improving the quality and investment value of listed companies, and increasing the efficiency of refinancing. As of the end of 2025, various types of medium- to long-term capital held A-share circulating market value reached 23 trillion yuan, a 36% increase from the beginning of the year. Looking ahead to 2026, under the policy framework focused on stability, the regulatory authorities will continue to promote the increase in the scale of medium- to long-term capital entering the market [4][5]. Micro Liquidity - Since the beginning of the year, there has been a large-scale redemption of stock ETFs, with a cumulative net redemption of 792.2 billion yuan, primarily concentrated in broad-based ETFs like CSI 300 and Shanghai 50. Despite this, the A-share market remains active, with trading volumes around 3 trillion yuan. Financing funds saw a net inflow of 16.1 billion yuan this week, indicating strong support for high-growth sectors. Although the A-share market has shown signs of temporary adjustment, there is still ample space and opportunities compared to previous bull markets. The report suggests focusing on high-growth technology sectors such as AI, robotics, and energy storage, as well as cyclical commodities related to price increases [5][4].

Group 1: Legal Context - The U.S. Supreme Court expressed skepticism about the legality of Trump's dismissal of Fed Governor Cook, questioning whether Trump's claim of fraud in a mortgage application constitutes "just cause" under the Federal Reserve Act[1] - The court's oral arguments highlighted three main controversies: the interpretation of legal text, due process rights, and judicial review authority[1] - The majority of justices appeared to oppose Trump's dismissal, with a predicted ruling of 7-2 against him based on the oral arguments[1] Group 2: Market Implications - Trump's repeated failures to interfere with the independence of the Federal Reserve may lead to a short-term improvement in the credibility of the U.S. dollar and an upward trend in interest rates[1] - The market is expected to respond with a strengthening of the U.S. dollar index and short-term U.S. Treasury yields, while gold prices may face downward pressure[1] - Recent political developments suggest a shift in Trump's approach to Fed leadership candidates, potentially favoring a more independent nominee[1] Group 3: Risk Factors - Potential risks include an unexpected Supreme Court ruling and Trump's possible further attempts to influence Fed personnel decisions[1] - Market reactions to Trump's interventions may not align with expectations, leading to volatility[1]