European and American stock markets closed lower on Friday, with the Nasdaq index falling more than 2%. Large technology stocks generally fell, with Meta and Amazon falling nearly 4%, and Tesla, Google, and Microsoft falling more than 2%. Oil and gas and gold stocks generally rose, with Halliburton rising more than 4% and U.S. Energy rising nearly 2%. Occidental Petroleum rose by more than 1%; Harmony Gold rose by nearly 3%; banking, shipping, quantum computing, and drone concept stocks fell across the board. Citibank fell by more than 4%, JPMorgan Chase fell by more than 3%, Morgan Stanley fell by nearly 3%, and Bank of America, Goldman Sachs, and Wells Fargo fell by more than 2%. International crude oil futures prices rose sharply, New York crude oil rose 7%, reaching $100, and the U.S. dollar index rose above 100. This is an obvious trading pattern of escalating geopolitical war. As long as the international crude oil price remains at around US$100, global inflation seems to be difficult to avoid and the US dollar will not cut interest rates. Against the background of global financial market turmoil, A-shares will still be under pressure next Monday.
So we have given out two investment strategies since last week. One is to turn to value investment, focusing on low-position and undervalued sectors, such as consumption and medicine, such as non-ferrous coal resource stocks. Another strategy is to shift the AI narrative to electric power and other infrastructure construction, and control positions in technology stocks.
Generally speaking, PB valuation can best reflect the position of sector valuation. Judging from the Wande statistics in the figure below, the current PB positions at the bottom are banks, building and decoration materials, coal, food and beverages, and biomedicine.
If international crude oil prices remain high for a long time and the CPI inflection point is expected to arrive in the second half of the year, then the above sectors deserve attention. It cannot be ruled out that some undervalued sectors will go out of independent market during the adjustment of the market shock. Perhaps the food, beverage and biopharmaceutical sectors, which have always been at low valuations, are the main investment lines in 2026.
Lu Changshun (Cairns) Certificate No.: A0150619070003. [The above content only represents personal opinions and does not constitute a basis for buying and selling. The stock market is risky, so investment needs to be cautious]
