Sinolink: In June, the market will wait in volatility for the moment of validation.

Sinolink released a research report stating that in the current market driven by AI capital expenditure, the changes at the molecular end are the core factors determining the market transition. The market in June will wait in shock for the moment of inspection: if the Strait of Hormuz reopens, the market is more likely to return to HALO trading; if a tail risk scenario occurs, it may be difficult to stand alone. Sinolink's main points are as follows: 1. During the market shock period, the focus is still on the molecular end. This week, A shares oscillated at high levels, with coal, power, and consumer sectors that had relatively lagging increases showing significant rebounds. In this round of market driven by AI capital expenditure, the changes at the molecular end are the core factors determining the market transition. Taking the electronic sector, which better reflects the current hardware market, as an example: although the concentration of turnover in the electronic industry was at a historically high level in the past quarter, and its profit as a proportion of the entire A-share market has also returned to a historical high level, contributing 15% to the profit growth of the entire A-share market in 2026Q1. The market's past concentration of trading is a concentrated feedback on marginal information, thus it is reasonable. Looking ahead, in the context of a possible shift in global financial asset expansion, the core of market rotation is at the molecular level, not the denominator. This means: first, sectors in the same technology race but lacking support for cyclical profit growth are unlikely to be the direction of the switch; second, for traditional industries, profit improvement expectations are still at a low level. The rebounding industries this week show: in April, the coal industry's profit growth rate and profit margin both increased, and recently domestic key power plants have shown seasonal growth in daily consumption; with regards to the consumer industry, the "Fifteenth Five-Year Plan for Urban Renewal" in the real estate sector has also strengthened the expected leapfrogging of the traditional "consumption-real estate" framework. 2. Insights from the rebound of US consumer stocks The US consumer sector showed a more pronounced rebound this week: even without factors such as AI PC sales, the overall consumer stocks have bottomed out, but the rebound in high-end consumption is significantly sharper. The K-shaped economy brought about by AI is beginning to show certain consumption side effects: on one hand, the development of AI is putting pressure on the US labor market, and on the other hand, AI-driven capital market returns are having a strong wealth effect. With the rapid rise in the Korean stock market this year and the expectation of salary adjustments by key companies, consumption is also beginning to recover, and the impact of AI on the consumption side is more extensive in a relatively smaller Korean economy: overall consumption data is recovering, but high-end specialty store consumption is recovering faster. When AI becomes an important driving factor in the macroeconomic operation process, the diffusion of its prosperity is inevitable. Considering that the development of AI in the United States is relatively early and equity assets account for a higher proportion of US residents' balance sheets, similar transmissions in China may require some time, and in the short term, the diffusion at the molecular end may be more concentrated in traditional manufacturing industries. With the improvement of China's new quality productivity in this round, it is worth paying attention to the possibility of the diffusion of prosperity to certain consumer areas towards the end of the year, which may be an important focus of attention during the switch. 3. If the strait reopens, the faster transmission path may be in traditional sectors In the background of AI technology giants' optimistic capital expenditure growth expectations, if the Strait of Hormuz gradually returns to normal navigation, HALO trading may gradually return, as the demand for AI infrastructure and the recovery of global manufacturing expectations intersect. This is consistent with our previous judgment. At the same time, the constraint of market expectations for Fed rate hikes has eased, with the trimmed PCE year-on-year in April falling further, and market expectations for Fed rate hikes this year falling below 50%. For China, refinery capacity utilization is at its lowest level in the past five years, and downstream chemical product inventories, represented by methanol, are also at historical lows for the same period. The reopening of the strait will bring opportunities for substantial corrections in demand. 4. When tail risks materialize, prosperity may not be able to stand alone In recent weeks, there has been no substantial improvement in the navigation situation in the Strait of Hormuz. Since March, both electricity prices and gasoline retail prices in the US residential sector have risen rapidly. If a tail risk scenario occurs, it will further increase the cost of living for overseas residents. The experience of the Industrial Revolution period shows that during periods of technological progress adjusting production relations, external shocks will amplify the feeling of rising living costs and may even trigger social movements. The invention of the cotton-spinning machine at the end of the 18th century led to the replacement of wool-spinning activities by cotton spinning. In the face of climate droughts and the impact of the Napoleonic Wars, wheat prices in Britain rose 1.5 times higher relative to wages, leading to the "Luddite Movement," where workers destroyed machines on a large scale. When tail risks materialize, the field of prosperity may also find it difficult to stand alone. Currently, compared to the low point at the end of 2025, US gasoline prices have risen by nearly 60%, and concerns about short-term inflationary pressures caused by AI and rising living costs among Fed officials are on the rise. 5. Inspection moment In June, the market will wait in shock for the moment of inspection. If the Strait of Hormuz reopens, the market is more likely to return to HALO trading; if a tail risk scenario occurs, the current field of prosperity may also find it difficult to stand alone. Therefore, we recommend the following: first, focus on the two main lines of macroeconomic recovery and the diffusion of AI artificial intelligence investment to traditional economic sectors and price transmission: industrial metals (copper, aluminum, lithium), chemicals (AI upstream materials, refining, etc.), energy replenishment and other benefiting varieties of the cyclical construction of secure stocks (oil shipping, dry bulk goods); second, focus on the upward movement of energy prices (oil, coal, lithium batteries, wind and solar power); third, production capacity is at a low point, and with the subsequent recovery of global industrial demand, highly elastic commercial vehicles, power grid equipment, textile manufacturing, electronic chemicals, etc., will usher in high elasticity.