Core Viewpoint - There is a significant divergence in expectations regarding the trajectory of the conflict between the US, Israel, and Iran, and its market impact, with three core questions currently unresolvable [1] Group 1: Uncertainties in Conflict and Market - The first question is about the extent to which air traffic can resume after a decrease in conflict intensity [1] - The second question concerns whether the Federal Reserve prioritizes inflation indicators or actual employment conditions [1] - The third question addresses whether the domestic market faces cost shocks or opportunities from supply chain shifts [1] Group 2: Market Reactions and Performance - In light of the considerable uncertainty, there has been some reduction in positions in the market, particularly in previously high-performing sectors [1] - Overall, the performance of most earnings-driven and narrative-driven market trends has reverted to the same starting point since the beginning of the year [1] - The first three months of the year can be viewed as a period of spring volatility and cooling, driven by expectations and narrative competition, rather than a decisive factor for the entire year [1] Group 3: Future Outlook - The broader recovery of the Producer Price Index (PPI) and price transmission, along with the restoration of corporate profitability, are seen as directions with both expected differences and potential [1] - Key decisions regarding these market dynamics are anticipated to become clearer by April [1]

Core Viewpoint - The market is experiencing significant divergence in expectations regarding the impact of the Iran conflict, with three core questions remaining unanswered until April: the extent of resumption of navigation after conflict intensity decreases, whether the Federal Reserve prioritizes inflation indicators or actual employment conditions, and whether China faces cost shocks or opportunities for supply chain shifts [1][14]. Group 1: Iran Conflict and Market Impact - There are two contrasting views on the Iran conflict: one suggests that the conflict's intensity has decreased and that navigation will resume, while the other argues that navigation has not yet recovered and supply chain disruptions are not fully reflected [2][16]. - As of March 19, 2026, only five vessels were passing through the Strait of Hormuz, indicating no signs of large-scale resumption of navigation, with daily passage numbers significantly lower than pre-conflict levels [5][19]. - The current oil tanker rental rates have surged from $10-20 per ton to $60-80 per ton, with some periods exceeding $90 per ton, marking a historical peak [5][19]. Group 2: Federal Reserve's Focus - There are two opposing views regarding the Federal Reserve's focus: one suggests that inflation risks are increasing and liquidity is tightening, while the other argues that employment prospects are more significantly impacted by AI, making tightening unlikely [3][17]. - Following the March 18 Federal Reserve meeting, market data indicated that the implied number of rate cuts for the year remained low, between 0-1 [3][17]. - The employment market is showing signs of weakness, with negative job growth reported in February and downward revisions to previous employment data [6][20]. Group 3: China's Energy Dependency and Supply Chain Resilience - There are two perspectives on China's situation: one indicates that prolonged conflict will significantly impact China due to high oil import dependency, while the other suggests that China's supply chain resilience has improved, with a notable decrease in oil dependency [4][18]. - China's oil import dependency has decreased from 2.2% of GDP fifteen years ago to 1.7% currently, and existing reserves can meet over 90 days of consumption [4][18]. - China's energy diversification strategy has been long-term, with potential additional supply sources capable of covering risks associated with the Strait of Hormuz [4][18]. Group 4: Market Behavior and Future Outlook - The market has seen some short-term reduction in positions, particularly in sectors that had previously seen significant gains, with a notable divergence in performance among different sectors [8][22]. - The market's volatility is attributed more to absolute return funds reducing positions rather than institutional reallocation, with low-valuation stocks performing better than high-valuation stocks [8][22]. - The market is expected to remain in a narrative-driven phase until April, when key questions regarding the Iran conflict and its implications will begin to be answered [9][23].

1. Report Industry Investment Rating - No information provided in the given content. 2. Core Viewpoint of the Report - Geopolitical situation may change, and attention should be paid to the rebound opportunities of stock index. The current geopolitical situation may ease, which may drive the price rebound of other assets, but one should remain vigilant as there are still "aftershock" risks [2][3] 3. Summary According to Relevant Catalogs 3.1 Market Analysis - **Macroeconomic Indicators**: In China, the CPI in February increased by 1.3% year - on - year, the highest in nearly three years, and the core CPI excluding food and energy prices increased by 1.8% year - on - year. The national PPI decreased by 0.9% year - on - year, with the decline narrowing for three consecutive months. Overseas, Trump said the war between the US and Iran might end soon [2] - **Stock Market Performance**: A - share market: The three major A - share indexes opened lower and closed higher. The Shanghai Composite Index fell 0.67% to close at 4096.6 points, and the ChiNext Index fell 0.64%. Most sector indexes declined, with coal, computer, and power equipment industries leading the gains, and communication, transportation, beauty care, and national defense and military industries falling more than 2%. The market turnover on that day was about 2.7 trillion yuan. Overseas: The three major US stock indexes all closed higher, with the Nasdaq rising 1.38% to 22695.95 points [2] - **Futures Market**: In the futures market, the basis of all IC and IM contracts rebounded. The trading volume and open interest of stock index futures increased simultaneously [2] 3.2 Strategy - The seesaw effect between crude oil and other assets is prominent recently. The current geopolitical situation may ease, which may drive the price rebound of other assets, but one should remain vigilant as there are still "aftershock" risks [3] 3.3 Charts and Tables - **Macroeconomic Charts**: Include the relationship between the US dollar index and A - share trends, the US Treasury yield and A - share trends, the RMB exchange rate and A - share trends, and the US Treasury yield and A - share style trends [6][10][8] - **Spot Market Tracking Charts**: The daily performance of major domestic stock indexes on March 9, 2026, shows that all indexes declined to varying degrees. The Shanghai Composite Index fell 0.67%, the Shenzhen Component Index fell 0.74%, the ChiNext Index fell 0.64%, etc. Also include the trading volume of the Shanghai and Shenzhen stock markets and the margin trading balance [13][14] - **Stock Index Futures Tracking Charts**: - **Open Interest and Trading Volume**: The open interest and trading volume of IF, IH, IC, and IM all increased. For example, the open interest of IF was 147,766, an increase of 53,708, and the trading volume was 290,004, an increase of 18,910 [17] - **Basis**: The basis of all contracts of IC and IM rebounded. For example, the basis of the current - month contract of IF was - 16.26, a decrease of 1.82 [34] - **Inter - period Spread**: The inter - period spreads of different contracts of IF, IH, IC, and IM are provided, including the spread between the next - month and current - month contracts, the next - quarter and current - month contracts, etc. [39][41]

Group 1: Price Surge and PPI Impact - The price surge driven by geopolitical events has increased the probability of PPI turning positive by mid-2026, with Brent crude oil prices rising over 30% since December 2025[7] - The South China Comprehensive Index rose by 15.9% from December 2025 to February 2026, with precious metals and energy leading the increase[8] - In January 2026, PPI experienced a month-on-month growth of 0.4%, marking the largest increase in 28 months[8] Group 2: Historical Context and Profit Distribution - Historical data shows that during the 2015-2018 supply-side reform, PPI's positive shift led to a cumulative industrial profit growth of 44.5%, with upstream industries contributing 35.1 percentage points[29] - In contrast, during 2021, a demand rebound allowed downstream manufacturing profits to rise alongside PPI, indicating that demand elasticity is crucial for downstream firms to pass on costs[29] Group 3: Current Challenges in Price Transmission - The industrial sector faces challenges in price transmission due to a long-term structural imbalance and short-term weak demand, with an industrial sales rate of only 96.4% as of the end of 2025, below the historical average of 97.7%[41] - The consumer market remains weak, with retail sales growth dropping to 0.9% in December 2025, and several durable goods categories, including automobiles and home appliances, experiencing negative growth[41] Group 4: Industry-Specific Cost Impact - Industries most affected by cost pressures include automotive manufacturing, general and specialized equipment, and public utilities, which struggle to pass on rising costs due to low cost transmission coefficients[45] - The chemical industry shows a high dependency on oil, with complete consumption coefficients for chemical raw materials reaching 17.63%[47] - The gas supply industry faces extreme cost fluctuations due to a complete consumption coefficient of 60.35% for oil and gas extraction[47]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - After the Spring Festival, the overall sentiment in the A-share market has significantly warmed up, with the CSI 1000 and CSI 500 indexes rising by over 4% within the week. The technology and resource sectors have shown a dual-line market, driven by different logics. The policy tone during the Two Sessions is expected to be "structural optimization" rather than "strong stimulus" [5]. - The technology sector remains prosperous but shows continued differentiation. The computing infrastructure and commercial aerospace sectors have more solid fundamental support, while the AI application and large model concepts face short - term pressure. The allocation logic for resource products and public utilities is expected to strengthen next week [8]. Summary by Directory Market Observation - **Market Performance After the Spring Festival**: The overall sentiment in the A - share market has warmed up after the Spring Festival. The CSI 1000 and CSI 500 indexes have risen by over 4%. The computing power industry chain, power, commercial aerospace, and resource product cyclical sectors have been active, but the "AI swallowing applications" narrative has impacted sectors such as A - share software and Hang Seng Technology. The global HALO trading strategy has become the dominant direction for foreign capital, and the A - share market has resonated [5]. - **Driving Logic of the Dual - line Market of Technology and Resources**: The dual - line market of technology and resources is essentially two sides of the same market logic. The technology sector is driven by the industrial prosperity logic of "AI driving the expansion of computing power and power demand and accelerating domestic substitution", and the resource sector is driven by the cycle repair logic of "PPI recovery, anti - involution policy implementation, and global resource re - pricing" [5]. - **Policy Expectations During the Two Sessions**: The period from the Spring Festival to the Two Sessions is a time window with dense policy expectations and relatively high certainty of market rise. The current policy tone emphasizes "stabilizing expectations, preventing risks, and improving quality", and the policy combination is more inclined to "structural optimization" rather than "strong stimulus" [5]. - **Configuration Outlook**: The technology sector remains prosperous but shows continued differentiation. The computing infrastructure and commercial aerospace sectors have better risk - return ratios. The allocation logic for resource products and public utilities is expected to strengthen next week. The public utility sector has both substantial demand increments from AI computing power expansion and price mechanism reform expectations [8]. Market Review - **Market Performance**: Most major market indexes rose last week, with the CSI 1000 having the largest increase of 4.34%. The material and energy indexes performed relatively well, with weekly increases of 8.03% and 6.31% respectively, while the telecommunications service and financial indexes performed weakly, with decreases of 3.20% and 1.10% respectively. Among the 30 Shenwan primary industries, 24 industries rose, with steel, non - ferrous metals, and basic chemicals having relatively large increases of 12.27%, 9.77%, and 7.15% respectively, and media, commercial retail, and food and beverage having relatively large decreases of 5.10%, 1.64%, and 1.54% respectively [9][15][18]. - **Trading Heat**: The average daily trading volume of the Wind All - A index last week was 24402.93 billion yuan (the previous value was 21111.36 billion yuan), which is at a relatively high historical position (92.80% in the three - year historical quantile) [21]. - **Valuation Tracking**: As of February 27, 2026, the valuation (PE_TTM) of the Wind All - A index was 23.71, an increase of 0.24 from the previous week, and it is at the 99.90% quantile in the past 5 years. Among the 30 Shenwan primary industries, 23 industries' valuations (PE_TTM) have recovered [25]. Economic Calendar - **Domestic Economic Data**: The official manufacturing PMI for February will be released on March 4 [28]. - **Overseas Economic Data**: The US ISM manufacturing PMI for February, the US effective federal funds rate for February, the US ISM services PMI for February, and the initial jobless claims for the week ending February 28 will be released from March 2 to March 5 [28].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - After the January long - short game, the market has seen some new changes. The PPI recovery speed may be faster than the previous neutral expectation, government bond supply is front - loaded with longer terms, and the expectation of broad monetary policy has further weakened. The bond market may face medium - term pressure, but there may be short - term trading opportunities with limited space [7][11][15][25][31] Summary by Related Catalogs Interest Rate and Bond Market in January - Interest rate showed a first - up - then - down trend in January. In the first two weeks, the 10 - year Treasury bond rate rose to around 1.9% due to factors such as supply concerns, dampened interest rate cut expectations, the seesaw effect of rising equities, and inflation concerns from strong commodities. In the middle and late January, with sufficient central bank liquidity injection and other factors, the market had a recovery window [2][7] - The bond market remained relatively resilient in the last week of January. The 7 - day reverse repurchase net investment was 5.805 billion yuan. The 7 - day funding rate rose significantly. The yields of both ends of the curve rose while the middle part declined. The 10 - year Treasury bond yield fell 2bp to 1.81%. The duration of public - offering funds continued to rise [32][33][37] PPI and Inflation - In January, prices accelerated upward with a wider coverage, and the change was transmitted from raw materials to the end - products. The month - on - month increase of PPI in January may be between 0.15% and 0.25%, and the year - on - year may be in the range of - 1.53% to - 1.43%, with the year - on - year decline expected to narrow faster. The PPI may return to zero earlier than the previous neutral prediction [3][11] Government Bond Supply - In January, the overall net financing of government bonds was significantly higher than the seasonal level, showing the characteristic of front - loaded supply. The local bond issuance was skewed towards the medium - and long - term, with the issuance scale of 10 - year and 30 - year bonds increasing. The supply pressure will still be relatively high from February to March [4][15][24] Expectation of Broad Monetary Policy - Since the beginning of the year, the market's expectation of broad monetary policy has gradually cooled, and the overall level has further weakened compared with the end of last year. Although there may be opportunities for short - term game of easing expectations, the overall space for total easing is limited this year [5][25][27] Local Bond Issuance - In the last week of January, local bond issuance increased, and the issuance scale this year has been significantly higher than that of the same period last year. The weighted average issuance term of local bonds has generally increased slightly compared with the same period last year, and the issuance scale of 10 - year and 30 - year local bonds has almost doubled [54][57] - In the week from January 24th to January 30th, the issuance scale of new special bonds and ordinary refinancing bonds increased month - on - month. The weighted average issuance term increased slightly by 1 year to 17 years, and the issuance spread decreased by 1bp month - on - month [43][45][51] - The actual issuance progress of local bonds in January was 103% of the plan. The expected issuance scale of local bonds from February 2nd to 6th is 57.97 billion yuan [59][60]

Group 1 - The report highlights a positive trend in the Producer Price Index (PPI), which narrowed its year-on-year decline to -1.9% in December 2025, with a month-on-month increase of 0.2%, marking three consecutive months of positive growth [8][14]. - The chemical industry is expected to benefit from a favorable cycle, driven by the exit of high-cost petrochemical capacities in Europe and Japan, and a slowdown in new domestic petrochemical capacities, particularly in the chemical fiber and propylene chains [8][20]. - The report recommends focusing on leading companies in the petrochemical and non-ferrous metal industries, as well as sectors like AI applications, computing power, and commercial aerospace for investment opportunities [8][20]. Group 2 - The December 2025 Consumer Price Index (CPI) showed a year-on-year increase of 0.8%, up from 0.7% in November, indicating a positive trend in inflation [11][12]. - The core CPI remained stable at 1.2% year-on-year, with significant contributions from household appliances and communication tools, reflecting a recovery in consumer demand [12][13]. - The report anticipates that both CPI and PPI will continue to rise in 2026, which may drive nominal GDP growth [11][12]. Group 3 - Chery Automobile has undergone significant transformation since its establishment in 1997, focusing on technology development, strategic restructuring, and a comprehensive shift towards new energy and intelligent vehicles [16][20]. - The company achieved a record export volume of 1.145 million vehicles in 2024, surpassing SAIC Motor, with overseas revenue accounting for 37.4% of total income [17][20]. - Chery's new energy vehicle segment is expected to grow rapidly, with a dual strategy of hybrid and pure electric vehicles, positioning the company for significant market expansion [18][20]. Group 4 - Juxing Technology (002444) is projected to achieve a net profit of between 2.419 billion and 2.764 billion yuan in 2025, reflecting a year-on-year growth of 5% to 20% [21][24]. - The company has successfully navigated external challenges, such as changes in U.S. tariff policies, by implementing a flexible "nomadic factory plan" and enhancing product innovation [22][24]. - The electric tool business has seen a remarkable growth of 56.03% year-on-year in the first half of 2025, indicating strong potential for future growth [23][24].

Group 1 - The report highlights a recovery in PPI and a positive outlook for the chemical cycle, with December 2025 PPI showing a year-on-year decline narrowing to -1.9% and a month-on-month increase of 0.2%, marking three consecutive months of positive growth [8][9][10] - The report emphasizes the correlation between chemical profitability and factors such as crude oil prices and PPI, noting that historical chemical market trends benefited from demand-driven oil price increases [8][9] - The report expresses optimism for leading chemical companies due to the exit of high-cost petrochemical capacities in Europe and Japan, a slowdown in new domestic petrochemical capacities, and the cost reductions from scale effects and internal synergies [8][9] Group 2 - The domestic equity market showed a preference for growth sectors over cyclical, financial, and consumer sectors, with an average daily trading volume of 28,287 billion yuan, up from 21,111 billion yuan [11][17] - Among the 30 industries tracked, the comprehensive sector (+14.55%), defense industry (+13.63%), and media (+13.10%) saw significant gains, while only the banking sector experienced a decline of -1.90% [11][17] - The report recommends focusing on the petrochemical and non-ferrous metal industry chains, as well as technology sectors such as AI applications, computing power, and commercial aerospace for asset allocation [8][9]

Core Viewpoint - The article discusses the recovery trend of China's Producer Price Index (PPI) since July 2025, predicting a narrowing year-on-year decline in PPI for 2026, with the next six months likely being the fastest recovery period. Historical analysis of past PPI recovery phases is used to identify potential investment opportunities in the stock and bond markets for 2026 [2][3]. Group 1: Historical PPI Recovery Phases - Since 2000, there have been five rounds of PPI recovery in China, with the current phase being the fifth. The PPI has transitioned from negative to positive during these periods, with significant economic events influencing these changes [15][22]. - The first round (2002-2004) saw PPI rise from -4.2% to 8.4%, driven by global economic recovery and domestic urbanization [4][16]. - The second round (2009-2010) experienced a rise from -8.2% to 7.1%, supported by the global financial crisis response and domestic stimulus measures [5][17]. - The third round (2015-2017) saw PPI increase from -5.9% to 7.8%, influenced by supply-side reforms and monetary policies [6][19]. - The fourth round (2020-2021) had PPI rise from -3.7% to 13.5%, primarily due to supply-side factors and global commodity price increases [7][20]. - The current phase (2025-present) has seen PPI recover from -3.6% to -2.2%, with expectations for further recovery in 2026 [8][21]. Group 2: Stock Market Performance During PPI Recovery - Historical analysis indicates that during the first phase of PPI recovery, A-shares typically show an upward trend, with small-cap growth stocks outperforming [3][6]. - In the second phase, as PPI rises from its bottom to positive territory, the stock market experiences a more balanced performance across growth, consumption, and cyclical sectors, with notable performances in electronics, communication, and consumer goods [3][8]. - The third phase, when PPI turns positive, often leads to high-level market fluctuations, with value stocks gaining an advantage over growth stocks [3][7]. Group 3: Bond Market Dynamics - The bond market's response to PPI recovery is influenced by various factors, including growth expectations and liquidity conditions, rather than solely by inflation [10][11]. - Historical data shows that during PPI recovery phases, the 10-year government bond yield may face upward pressure, but this is not always synchronized with PPI movements [10][11]. - A stable liquidity environment and lack of sustained demand improvement can prevent significant upward trends in bond yields, even during periods of PPI recovery [11][12]. Group 4: Outlook for 2026 - The PPI is expected to narrow its year-on-year decline in 2026, with the next six months likely being the fastest recovery period, driven by policies aimed at stabilizing coal and steel prices, as well as rising demand for lithium and copper [12][13]. - The stock market is anticipated to have upward potential, with growth, consumption, and cyclical sectors all presenting investment opportunities, particularly in undervalued sectors such as food and beverage, home appliances, and non-ferrous metals [12][13]. - The bond market is expected to remain in a state of fluctuation, with a continued focus on monetary easing, although significant adjustments in bond yields are not anticipated [13].

Core Viewpoint - The article discusses the outlook for RMB appreciation, PPI recovery, and foreign capital inflow, highlighting the potential positive impacts on the economy and investment landscape [2] Group 1: RMB Appreciation - The article indicates that the RMB is expected to appreciate due to various economic factors, which could enhance the purchasing power of consumers and businesses [2] - It notes that a stronger RMB may lead to increased imports and reduced export competitiveness, impacting trade balances [2] Group 2: PPI Recovery - The Producer Price Index (PPI) is projected to recover, suggesting a potential increase in manufacturing profitability and overall economic growth [2] - The recovery in PPI is seen as a positive signal for industrial sectors, indicating improved demand and pricing power [2] Group 3: Foreign Capital Inflow - The article highlights an anticipated increase in foreign capital inflow, driven by favorable economic conditions and investment opportunities in China [2] - It suggests that this inflow could support domestic markets and enhance liquidity, benefiting various sectors [2]