Yang Delong: In-Depth Analysis of March Market Conditions - Opportunities and Risks Coexist

In March, the market experienced significant fluctuations due to many major events, with rapid sector rotations. The first major event was the joint attack by the US and Israel on Iran, which Iran responded to strongly. Iran launched missile attacks on Israel and US military bases in the Middle East, while also blocking the Strait of Hormuz, causing a huge impact on global oil transportation.

The Strait of Hormuz is a vital passage for global oil shipping, controlling about 20% of the world’s oil trade. News of the blockade caused international oil prices to surge, rising from pre-war levels of $73 per barrel to $118 per barrel at one point. Later, signals of easing tensions in the Middle East emerged, with parties showing signs of ending the conflict, especially the US, the instigator. President Trump announced that he would end the war as soon as possible but also claimed he had already won, a typical Trump move known as the “TACO deal.” Trump initially released some major negative news, causing a significant shock to capital markets, with US stocks plunging. When panic was at its peak, he suddenly shifted tone, signaling easing measures, and the market responded with a sharp rally. Some jokingly say, “All actions are as fierce as a tiger; market moves depend entirely on Trump.” Trump’s stance often changes abruptly, and some say only the next day’s Trump can defeat the current Trump.

This unpredictable fluctuation in Middle East tensions caused major swings in international oil, gold, commodities, stock, and bond markets in March, catching many investors off guard. Some capitalized on the volatility for substantial gains, while others failed to keep pace and suffered losses. Therefore, tracking, analyzing, and predicting these developments is crucial.

From the outset of the conflict, I provided a detailed analysis of the root causes of this war and the US’s strategic goals. I predicted that while the US appeared to dominate on the surface, Iran had enough strength and advantages to force the US to end the war, potentially even losing its absolute control over the Middle East. Although Trump declared victory, the US paid a significant price, including lives, hundreds of billions in military expenses, and international credibility. During US-Iran negotiations, Trump suddenly launched a drone strike, bombing Iran’s top leader Khamenei and 41 military generals alongside Israel. This united Iran’s factions like never before, with Khamenei’s son announced as the new Supreme Leader. This meant Trump’s plan to overthrow Iran’s regime through targeted killings had failed. Fearing prolonged conflict and further costs, and considering the negative impact on midterm elections, Trump chose to step back. Optimistically, most conflicts between the US and Iran could end by March, entering negotiations.

Domestically, China successfully convened the Two Sessions in March, which sent signals guiding investment directions for the year. For example, the government’s work report set this year’s GDP growth target at 4.5% to 5%, with CPI at 2%. Fiscal policy will be more proactive, including issuing ultra-long special government bonds to boost investment and consumption, stabilizing the economy. The central bank governor, Pan Gongsheng, also stated that monetary policy would remain moderately loose, maintaining low interest rates and ample liquidity, which benefits the capital markets’ slow bull run.

Securities regulator Wu Qing also said they would deepen reforms, increase tolerance for IPOs on the ChiNext board, and support more tech innovation companies to list, promoting new productivity development. For promising tech startups, a green channel will be available. These measures further boost investor confidence in the current tech bull market and provide clear guidance.

The Two Sessions officially approved the 14th Five-Year Plan, emphasizing key areas like technological innovation—such as humanoid robots, chips, semiconductors, computing algorithms, quantum technology, controlled nuclear fusion, and biomedicine—these are the main policy supports for the next five years and the driving forces behind this tech rally.

The conclusion of the Two Sessions signals the start of a new market cycle. Especially with easing Middle East tensions, the capital market is expected to recover from recent adjustments and begin a new upward trend. Everyone is watching closely. The A-share market traditionally has a spring offensive seasonality. Since the Chinese New Year was late this year, ending only at the end of February, the market’s main rally started in March. The spring rally was paused due to US-Iran conflict, but if the conflict concludes or at least provides clear expectations by the end of the month, the spring rally could resume. Investors should monitor international developments and sector rotations within the A-share market.

Recently, due to the war, international oil prices surged, leading the energy sector to outperform, also lifting coal and chemical sectors. As tensions eased, these strong sectors retreated significantly, while previously beaten-down tech sectors like chips, semiconductors, AI applications, and humanoid robots regained momentum.

A hot new AI agent called “Lobster” has gained attention. Named because its icon is a lobster, installing and using OpenClaw is called “raising a lobster.” It requires spending money on installation, operation, and purchasing tokens, so many have tried it. However, there are risks: if you give control of your computer to an AI agent, could it tamper with files or delete data? It might be accidental, but handing control to an unknown AI could resemble hacking, leading to unexpected losses. Therefore, when “raising a lobster,” users must be knowledgeable and prepared for risks, avoiding unforeseen issues. New technology always warrants attention but should not be blindly followed. After ChatGPT’s emergence last year, which drew investor focus on AI large models, OpenClaw’s appearance signals the start of AI application deployment. Last year, the market mainly focused on AI infrastructure like computing power; this year, attention is shifting to AI applications.

This spring festival, four robotics companies showcased their robots on the CCTV New Year’s Gala, including products from Yushu, Magic Atom, Songyan Power, and Galaxy General, covering skits, singing, dancing, actions, and micro-videos. Some netizens joked, “It looks like the director of the Spring Festival Gala is fully stocked with robots.”

However, after high expectations, the robot sector experienced a correction post-holiday. I recall a famous Wall Street saying: “When everyone is in agreement, that’s the most dangerous time.” Overly high expectations often lead to profit-taking and market adjustments. But this doesn’t mean humanoid robots aren’t a key investment theme this year. Since early last year, I’ve been optimistic about humanoid robots, believing they are China’s fourth major industry after home appliances, smartphones, and new energy vehicles. It’s only a matter of time before humanoid robots become part of everyday life. Bill Gates once said, “When a new technology appears, people tend to overestimate its short-term impact but underestimate its long-term potential.” Currently, expecting robots to perform tasks smoothly and follow commands is still challenging because their “brains” are not yet sufficiently intelligent—some even call them “artificial idiots.” But technological progress is unstoppable, and with substantial capital investment, these issues are part of growth.

People tend to underestimate the long-term potential of humanoid robots. In the long run, they could become China’s next automotive industry, especially since China has a complete supply chain and low manufacturing costs. I believe China will remain a major robot manufacturing hub, with over 50% of robots produced domestically. An important upcoming milestone is Tesla’s release of the Optimus Gen3 robot, which will significantly improve over Gen1 and Gen2. Tesla has shut down the Model S and Model X production lines in California, despite their strong sales, to convert them into robot production lines. By 2030, Tesla plans to build a factory producing 1 million robots annually. This indicates that mass production of humanoid robots is very close. As the best application scenario for “AI + consumer,” this year’s focus remains on AI applications, humanoid robots, chips, and semiconductors. (Note: viewpoints for reference; investment involves risks. Image source: internet.)