Global surge!

The global stock market has gone crazy recently, with the South Korean stock market directly rising to a circuit breaker, and even Japan's market surged over 5% in a single day!

A-shares also put up a decent performance yesterday, showing a broad-based rally. The Shanghai Composite Index surged 1.61%, almost touching the 4100-point mark, while the ChiNext board was even more explosive, soaring 5.3%, followed closely by the STAR Market which rose 5.12%.

The market's money-making effect is off the charts! Nearly 4000 stocks closed in the green for the day, with 159 stocks hitting the daily limit-up. The median stock gain was 1.25%, meaning most retail investors made some profits today. However, there's a small detail: market trading volume shrank by about 200 billion yuan, mainly because the early session opened high and exhausted the momentum, leaving subsequent funds hesitant to attack aggressively, leading to an overall wait-and-see attitude.

The core catalyst for this round of global stock market rebound is the memorandum of understanding reached between the US and Iran. Although the ceasefire conditions announced by both sides differ significantly, a phased ceasefire has been achieved, giving global capital markets a shot of confidence and sparking this round of broad rally.

But there's a very clear characteristic of the current market: almost all positive news favors tech stocks, while traditional old sectors have instead become "blood bags" for capital drainage. This is the most realistic market choice at the moment. The tech bull market remains the main theme, and a major style switch is simply impossible in the short term.

The market is highly likely to follow two parallel main lines going forward: tech supply shortage-driven price hikes and resource price hikes. The tech side focuses on AI supply shortage-driven price hikes, with the core being upstream PCB materials, including PPO resin, MLCC, copper foil, electronic cloth, etc., combined with the computing power metal theme, also benefiting from the positive stimulus of the US-Iran ceasefire. The resource side focuses on rare earths, lithium batteries, various minor metals, and the power sector, which is also the most core short-term opportunity at this stage.

Regarding sector themes:

1. Minor Metal Price Hike Direction

The core focus is on the tungsten hexafluoride price hike line. Industrial gases are currently the sentiment barometer for the materials track. The key going forward is to watch for signals of the core targets finishing their adjustments. Once divergence turns to consensus, this track still has good opportunities.

In terms of trading, pay attention to the trend of the main force for tungsten hexafluoride. If the main force cannot stage a strong comeback, the track can easily diverge again. Avoid blindly chasing highs. Also, semiconductor target materials have shown strong momentum recently. Track sentiment can be monitored by watching the leader. If the leader can achieve consecutive limit-ups, the sector rally can continue. If the leader diverges, the entire track will follow suit and weaken.

Besides, MLCC and glass fiber are varieties that show repeated unusual movements and take turns driving momentum, offering opportunities for continuous tracking and buying on dips.

2. Rare Earth, Non-ferrous Metals Sector

The absolute leader in the non-ferrous metals sector recently is industrial copper. As the king of industrial metals, this round of rise is a solid valuation recovery rally. After prolonged low-level consolidation, the recent limit-up of this heavyweight stock and large capital inflows for buying are enough to indicate a significant rally level. Every subsequent adjustment will be an opportunity to buy on dips.

Clear differentiation has emerged within the rare earth sector, with heavy rare earths performing far stronger than light rare earths. The premium space brought by this round of price hikes is considerable. In the long term, the gap between the two is not large, but the short-term focus is on heavy rare earth opportunities. The permanent magnet sector is affected by physical AI volatility and is currently in a consolidation and adjustment phase. Sector sentiment should be closely watched via the core leader. As long as the leader starts moving, the entire permanent magnet track will experience a resonance rebound.

3. PCB Materials Track

Among the tech sub-tracks, PCB has the strongest rally continuation, with core opportunities concentrated in the upstream materials end. This round follows a passive price hike logic.

70% of the world's high-purity electronic-grade PPO resin is supplied by a core factory in Saudi Arabia. At the end of March this year, shipping through the Strait of Hormuz was disrupted. In early April, the factory facilities were attacked, leading directly to a force majeure announcement and a complete production halt. Equipment repairs could take up to 2 years, meaning there is absolutely no new capacity in the short-term market to fill the gap.

Under tight supply-demand imbalance, major CCL manufacturers have implemented four consecutive rounds of price hikes from April to June, with PP prepreg prices rising up to 20%, high-end laminates rising 10%-40%, and downstream PCB manufacturers adjusting prices simultaneously. High-end laminates saw a maximum monthly increase of over 40%. The price hike logic for the entire industry chain is very solid.

4. Hot Money Theme Tracks

1. Commercial Aerospace: Funds have been repeatedly testing and pulling up this sector recently. Many leaders within the sector had previously suffered huge declines, with their stock prices halved. However, the sector as a whole has not yet shown a sustained rally. The core issue is that key industry tests have not yet succeeded, and there is no substantial positive news to support a broader sector rally.

2. Physical AI: The tech tracks heavily held by institutions have been too strong recently, directly siphoning off most of the market's funds, leading to low popularity in the physical AI track dominated by hot money. Later, when the institutional tracks enter a consolidation/adjustment phase and funds are redistributed, this line is highly likely to show repeated unusual movements. Opportunities to buy on dips can be awaited.