GF Securities Strategy maintains the core conclusions from last week's report: First, the market index requires a period of consolidation. Second, during the "April decision-making" period, focus should be placed on high-growth sectors relatively independent from overseas oil price volatility, high inflation, and elevated interest rates, including new energy, domestic AIDC, and overseas computing power.

This weekly report analyzes the impact of five historical wartime oil price surges on major sectors and industries.

**Impact of Hormuz Strait Closure on the Global Economy:** (1) A Dallas Fed model indicates a 58% probability the Strait remains closed through Q2 2026. A Kalshi betting market implies a 63% chance of reopening before July 2026. (2) Closure would directly reduce oil supply by nearly 20%, alongside a 20% drop in LNG, 30% in urea, 20% in ammonia and phosphates, and 50% in sulfur supplies. (3) The model suggests a three-month closure could push Q2 2026 WTI crude average to $98/barrel, reducing global GDP growth by 2.9 percentage points. The likely scenario involves a Q2 shock followed by Q3 recovery, avoiding a substantive recession.

**Comparing the Current Oil Crisis to Historical Episodes:** Post-conflict oil prices typically follow two patterns: a sharp spike followed by a rapid decline, or a spike followed by a sustained high plateau. Comparisons with historical events: (1) Economic Cycle: Pre-conflict, major economies were in a phase of fiscal easing and demand recovery, akin to the post-Asian Financial Crisis period during the Kosovo War. (2) Monetary Cycle: Pre-conflict, major economies were in a rate-cutting cycle, similar to the Gulf War period, though current cuts are part of policy normalization versus recession-driven cuts then. (3) Oil Price Trajectory: The first and second oil crises saw prolonged high prices due to supply constraints; the Kosovo War period saw high prices from OPEC cuts and rising demand. Sharp price reversals occurred after the Gulf War (6 months to normalize) and Russia-Ukraine conflict (3 months to normalize).

**Analysis of Market and Sector Performance Post-Crisis:** (1) Sectors with excess returns during crises include: war-catalyzed sectors (oil, precious metals, defense); safe-haven sectors (telecom, tobacco, dividends), though these can decline late in bear markets (e.g., Aug-Sep 1974); and sectors with strong underlying trends (e.g., consumer staples in the 1980s, tech in the 1990s). (2) Excess returns for oil and gas typically peak with oil prices; tourism and leisure are usually the hardest hit by high oil prices. (3) If high prices persist post-spike, the impact on inflation and demand varies: the first oil crisis was negative (leading to stagflation), the second was positive (shock lasted only one month), and the Kosovo War was also positive (gradual price impact). (4) If prices reverse quickly, markets typically resume their pre-war trajectory after a brief adjustment, with capital concentrating in high-conviction growth sectors (e.g., defense around 1980, consumer in the early 1990s, tech in the late 1990s).

**Key Market Changes This Week:** **Sector Performance:** - Real Estate: Transactions in 30 major cities fell 19.12% YoY cumulatively but rose 92.25% MoM. - Automobiles: Retail sales of passenger vehicles from March 1-22 fell 16% YoY; new energy vehicle retail sales fell 17% YoY. - Manufacturing: Steel rebar spot prices fell 0.43% WoW; methanol prices rose 21.18%. - Resources: WTI crude rose 1.44% WoW to $99.64/barrel; Brent rose 1.80% to $106.29/barrel.

**Stock Market Characteristics:** - The Shanghai Composite fell 1.09% this week. Top gainers were non-ferrous metals (+2.78%), utilities (+2.50%), and basic chemicals (+2.31%). Largest decliners were non-bank financials (-3.98%), computers (-3.44%), and agriculture (-2.94%). - The A-share overall P/E (TTM) decreased to 22.12x.

**Liquidity:** - The PBOC conducted a net injection of 281.9 billion yuan via reverse repos.

**Overseas Markets:** - The S&P 500 fell 2.12% last week.

**Risks:** Geopolitical conflicts exceeding expectations; overseas inflation and US economic resilience leading to tighter-than-expected global liquidity; domestic economic stabilization policies falling short of expectations.