Guotai Junan Securities: The end of tariff policies marks the conclusion of the U.S. bull market lasting over two years; optimistic about Hong Kong stocks in cloud computing, new consumption, and dividend directions

According to the Zhitong Finance APP, Guosen Securities released a research report stating that concerns over tariffs have changed the long-term expectations for the U.S. stock market. The firm believes that the bull market that began in October 2022 has ended. Looking ahead, if oil prices accelerate upward in the second quarter, the risk of stagflation will increase. In terms of investment direction, in the Hong Kong stock market, areas worth paying attention to include cloud computing, new energy vehicles and components, new consumption and pharmaceuticals, dividend directions, and performance-upgraded target pools; in the A-share market, it is expected that the second quarter will shift from sentiment-driven to performance-driven, with low-level rebounds and sectors with relatively good performance gradually gaining an advantage. Guosen Securities' main viewpoints are as follows: Tariff policies end the U.S. bull market lasting over two years With the implementation of Trump's tariff policies, the market gradually realized that the implementation of these policies is not based on the U.S. economy, inflation, and the stock market, but rather that reducing the fiscal deficit is the primary consideration of the current Trump administration. This situation has had a greater impact on the stock market than previously expected. Although U.S. corporate profits and hourly wages indicate a rebound ahead, concerns over tariffs have changed the long-term expectations for the U.S. stock market, and the firm believes that the bull market that began in October 2022 has ended. Although the market is currently trading on recession, the trend of oil prices still needs to be observed in the second quarter. If oil prices accelerate upward in the second quarter, the risk of stagflation will increase. The difference between stagflation and recession is that the former will see inflation rise to an uncontrollable state after reaching 3.0, while the latter will gradually decline alongside recession after breaking through 3.0. Domestic economic indicators gradually improve Domestic social financing data continues to improve year-on-year, and PPI has also shown significant improvement month-on-month, with first-tier real estate prices continuously recovering. Reviewing the A-share spring market, the index's rise has shown a negative correlation with corporate profits. The firm believes that A-shares will shift from sentiment-driven to performance-driven in the second quarter, meaning low-level rebounds and sectors with relatively good performance will gradually gain an advantage. Hong Kong stocks are limited in impact, optimistic about cloud computing, new consumption, and dividend directions The U.S. tariff policy brings significant uncertainty to the global economy and stock market, which may lead to a shift in Hong Kong stocks from the rise in the first quarter to fluctuations in the second quarter. The firm expects that domestic monetary and fiscal policies will continue to exert force, using AI and large consumption to hedge against external shocks. In terms of sectors, the firm tends to shift from a general rise to differentiation: 1. Cloud computing direction: With DeepSeek's deployment in many enterprises, cloud computing will be the most directly benefited direction, expecting bright performances in the first quarter financial reports; 2. New energy vehicles and components: China's new energy vehicle rapid growth has entered its 10th year, forming a group of globally competitive quality enterprises, with significant advantages in product strength and cost performance, and the growth rate remains the fastest in the primary industry; 3. New consumption and pharmaceuticals: Unlike liquor, the characteristics of new consumption include a large young fan base, good global expansion potential through online dissemination; the pharmaceutical sector, after a three-year decline, has seen the bad news fully priced in and is currently on the path of valuation recovery; 4. Dividend Direction: The performance of the insurance industry has been clearly revised upwards, with stable performance from operators, banks, and public utilities. After a two-month adjustment, government bonds are expected to rebound alongside expectations of reserve requirement ratio cuts and interest rate reductions, thus bond-like assets will also benefit accordingly; 5. Performance Revision Target Pool: Recently, the proportion of performance revisions in Hong Kong stocks is about 51%, with internal differentiation occurring within multiple industries rather than an overall revision; as the rise of Hong Kong stocks has always been strongly correlated with performance, attention should be paid to the performance revision target pool. Risk Warning: Uncertainties in geopolitical situations, uncertainties in U.S. tariff policies, uncertainties in the extent of overseas interest rate cuts, and uncertainties in the competitive landscape of certain industries