Guojin Securities: Meningkatnya Konflik AS-Iran Membalik Narasi "Dolar Lemah" Aset Kuat yang mengalami koreksi mungkin menjadi tanda pasar telah mencapai dasar

智通财经APP获悉，国金证券发布研报称，
recent global asset classes are under pressure,
surface looks like concerns over weak demand,
but the core contradiction lies in the escalation of the US-Iran conflict
which has reversed the previous narrative of “weak dollar.”
The strong assets (US technology) during the past decline
may be a sign that the market is bottoming out.
The firm believes that the reasons for the decline in non-ferrous metals
may not be due to “recession,”
but rather an expectation of contraction in dollar liquidity
combined with structural redistribution,
a reversal may be imminent.
Additionally, against the backdrop of increasing global energy security anxiety,
the unique advantages of Chinese assets are gradually emerging.

国金证券主要观点如下：
Recent global asset classes are generally under pressure,
surface looks like concerns over weak demand,
but the core contradiction lies in the escalation of the US-Iran conflict
which has reversed the previous narrative of “weak dollar.”
Certainly, concerns about stagflation and recession in the global economy
are the surface reasons,
but the underlying reason for the redistribution pattern of dollar liquidity
in financial assets may be a more impactful driver of market performance.

After the outbreak of the US-Iran conflict,
the United States has relative advantages among global economies:
With a service-oriented economic structure,
the US’s GDP consumption of traditional energy is significantly lower than other countries,
and coupled with its own oil and gas resource advantages,
it has therefore been less impacted;
while the manufacturing sector,
which consumes higher traditional energy,
especially in metals, chemicals, etc.,
faces greater pressure.
The underperformance of global risk assets compared to US assets
reflects the US’s control over the world order;
currently, the conflict is still more damaging to other economies,
and the market believes that the US can still maneuver freely,
which reverses the trend of dollar liquidity outflow.
Looking ahead, several variables need attention:
Whether the US will lose control of the situation
due to being trapped in a long-term war of attrition over the Iran issue;
whether the prolonged conflict will shake the physical foundation of US technology (e.g., supply chains in Japan and South Korea),
ultimately leading to a new direction in the situation;
or whether new forces will achieve a breakthrough
through industrial advantages.
Regardless, the strong assets (US technology) during the past decline
may be a sign that the market is bottoming out.

The non-ferrous metal sector has faced multiple headwinds in the past,
in addition to the aforementioned factors of dollar liquidity redistribution,
changes in overall monetary policy expectations are also significant:
Currently, the market’s pricing for the Fed’s tightening monetary policy
is already quite extreme,
clearly more pessimistic than the Fed’s own stance,
and this expectation gap itself is a potential space for repair.
At the same time, it is also difficult for US inflation to rise significantly:
The US AI has suppressed the salaries of related workers,
thereby restraining service inflation,
making it difficult for the US to form a wage inflation spiral;
the weight of energy in personal consumption and CPI has significantly declined;
and the long-term inflation expectations in the US are currently stable.
The reasons for the decline in non-ferrous metals
may not be due to “recession,”
but rather an expectation of contraction in dollar liquidity
combined with structural redistribution,
a reversal may be imminent.

Against the backdrop of increasing global energy security anxiety,
the unique advantages of Chinese assets are gradually emerging.
On one hand, China has a globally leading coal chemical
and power equipment industry chain,
the completeness of the energy system not only reduces vulnerability
to external shocks,
but also can effectively provide energy alternatives globally.
On the other hand, the leading Chinese manufacturing companies
are historically undervalued compared to overseas giants
in terms of PE valuation and capacity value,
and the continuous growth of exports itself proves the basis for its revaluation.
At the same time, China’s domestic demand shows signs of endogenous recovery,
and the export settlement we mentioned may be transmitting to domestic demand.

The narrative of the rise of global physical assets has not ended;
only by clearing the fog of the dollar can we see the truth of the world.
We recommend the following:
First, in the context of global turmoil, energy security becomes particularly important,
but this year, primary energy is stronger than secondary energy construction;
we prioritize crude oil, oil transportation, coal, copper, aluminum, gold, and rubber;
Second, Chinese manufacturing is the ballast of the global economy,
only that the flow of physical goods is slower than that of financial assets,
waiting for revaluation to arrive—
electric power equipment for new energy, machinery equipment, chemicals;
Third, under the reversal of suppressive factors, look for structural opportunities in consumption—
tourism and scenic spots,
seasoning and fermented products,
beer and other alcoholic beverages,
pharmaceutical commerce, medical beauty, etc.

Risk warning: Domestic economic recovery may be worse than expected,
and overseas monetary policy expectations may tighten significantly.