CITIC Securities: Configuration must be gradually narrowed, continue to focus on China's advantageous manufacturing.

Research from Citic Securities believes that the possibility of a TACO (trade and currency war) still exists, but market funds' patience has been exhausted. It is expected that the war will come to a close this month, but the possibility of the "weaponization" of the Hormuz Strait and intermittent disruptions in the supply chain are increasing. Currently, among the five fundamental clues, only PPI, domestic AI, and consumption are not fully priced. After the war is settled, the transmission from oil to PPI to corporate profits is the most important fundamental factor, domestic AI is a relatively independent industry change, and domestic consumption transactions are likely to lag behind PPI transactions. Of course, the trading of "PPI to corporate profits" will only begin after oil prices peak when the war is resolved. In the process of cooling down the market, allocations should gradually narrow down and continue to focus on China's advantageous manufacturing.