Industrial: Currently, the market is experiencing ups and downs, focusing on internal certainty and defending against potential threats on three major fronts.

Industrial released a research report stating that since April, it has been emphasizing the current market being in a "stable east and fluctuating west" global macro environment, emphasizing the need to remain confident, "putting oneself first", and focusing on internal certainty. This week, amidst continued chaos and turmoil overseas, disturbances from external uncertainties continue. On one hand, domestic demand consumption and self-controllability are seen as the convergence points for medium to long-term economic momentum transition and short-term stability policies, likely becoming the focus of the market. On the other hand, in the face of potential continuous and repetitive global trade negotiations, short-term preparations need to be made to deal with uncertainty, with positions possibly tilting towards low volatility dividends and low stock high performance sectors. Industrial's main points are as follows: Stable east and fluctuating west, "putting oneself first" Since April, Industrial has been emphasizing the current market being in a "stable east and fluctuating west" global macro environment, emphasizing the need to remain confident, "putting oneself first", and focusing on internal certainty. This week, amidst continued chaos and turmoil overseas, disturbances from external uncertainties continue. On April 15, the U.S. raised tariffs on China to 245%. At the same time, news of a deadlock in EU-US trade negotiations emerged, with the EU expecting most of the tariffs imposed by the U.S. on the EU to remain unchanged, and the two sides currently making little progress in their talks. On April 16, Federal Reserve Chairman Powell issued a warning on the inflationary effects of Trump's trade policy and, when asked if the Fed would intervene to address the steep stock market declines, he denied the possibility. On the other hand, as U.S. stocks gradually enter the earnings season, the drag on performance from factors such as tariffs is beginning to show. But more importantly, the domestic situation remains stable. The continuing repair of the economic fundamentals and prompt responses to recent uncertainties, including the development of a dual-cycle development pattern and strategic strength in the medium and long term, constitute a stable anchor for the market. Firstly, in the first quarter, GDP grew by 5.4% year-on-year, and the recovery momentum in March showed an increasing trend, which is expected to further stabilize market confidence. At the same time, in the face of external uncertainties, the decision-makers have taken proactive measures and responses, and looking ahead, there are still ample policy reserves and mitigating measures domestically. On one hand, domestic demand is being expanded. On the other hand, external opening is being actively pursued. In particular, regarding the capital market, various domestic stakeholders have actively and promptly responded during the recent market turmoil, providing a clearer bottom line for the market. At the State Council meeting on April 18, it was explicitly stated that "stability in the stock market will be maintained and the stable and healthy development of the real estate market will be promoted continuously". Amidst the turbulence caused by Trump's tariff implementation, Central Huijin, the sovereign wealth fund, reaffirmed its positioning, and regulatory authorities and official media have also made concerted efforts to protect the market. Meanwhile, several central SOEs and listed companies have announced and implemented increases and buybacks. In the medium to long term, regardless of the internal and external environment, potential policy reserves, adaptation to the optimization of export structure after the previous round of trade conflicts, and the psychological readiness of the market, especially the strengthening of confidence due to technological breakthroughs represented by DeepSeek, compared to the sudden trade war faced in 2018, this round of dealing with external uncertainties will be more confident and more self-assured, and the market will be more "self-centric": On one hand, domestic factors remain the core contradiction determining the trend of A-shares. Different from the macro environment of "internal and external predicaments" in 2018, the current domestic situation is in a stage of transitioning to domestic demand and technological breakthroughs, which will be the source of our confidence in dealing with external pressure. On the other hand, from the perspective of the external environment, after the previous round of tariff conflicts, Chinese enterprises actively sought to diversify their export destinations, combined with the enhanced bargaining power in global export markets of certain products, the export environment currently faced by our country has already changed. Focusing on internal certainty, three main themes for defense and counterattack On one hand, domestic demand consumption and self-controllability are seen as the convergence points for medium to long-term economic momentum transition and short-term stability policies, likely becoming the focus of the market. On the other hand, in the face of potential continuous and repetitive global trade negotiations, short-term preparations need to be made to deal with uncertainty, with positions possibly tilting towards low volatility dividends and low stock high performance sectors. (I) Domestic demand consumption and self-controllability will be the convergence points for long-term economic momentum transition and short-term stability policies Against the background of further policy buffering or escalation, and the increasing necessity of self-controllability, domestic demand consumption and self-controllability, as the representatives of directions, will be the convergence points for long-term economic momentum transition and short-term stability policies, gradually attracting attention in the medium to long term. (II) In the April earnings season, low position high performance directions still have strong certainty As the domestic market enters the April earnings season, low position high performance directions with previous underperformance but strong expectations for improvement in performance remain the areas with strong certainty. Selecting low position high performance directions based on the match of stock price to performance, mainly include sectors such as consumption (seasonings, specialty retail), finance (securities, state-owned banks, insurance), infrastructure and real estate chain (cement, real estate services), TMT (digital media, advertising and marketing), etc. (III) Bond-like dividends as core holdings, to deal with short-term uncertainties Dividing dividend assets into bond-like dividends (electricity, transport, operators, banks, etc.), cyclical dividends (coal, steel, etc.), and consumption dividends (textile and apparel, automotive, household appliances, etc.), bond-like dividends have stronger fundamental stability, lower volatility, and a stronger correlation with the yield trends of safe-haven assets such as long-term bonds. Considering the many uncertainties ahead, bond-like dividends are more suitable for asset allocation as core holdings. Risk warning Economic data fluctuation, policy easing lower than expected, global trade negotiations falling short of expectations, etc.