Do nothing – Win

Tian Xuan Zhou (Oliver)
Bachelors Student, New European College – Munich

Asia

Japan

Very stale, now a United States blockade in the Strait of Hormuz? I am sure nobody was prepared for this, no one knows what might come out of President Trump’s mouth next. Japan, has to once again planning another strategic oil reserve release (~20 days supply).

Overall sentiment remains strong, looking past the current geopolitical tensions, with Topix and Nikkei both posting relatively good recovery and support even after the bigger move when the ceasefire was announced. The names covered were underperforming relative to the index, especially in defense although I still think it is a good buy. Other than Fanuc and Daikin, which with the defense names and construction names covered, I think there is a rotation out of defensive stocks (not related to defense as a sector), back into tech names such as Fanuc, which makes sense as investors are taking on more risk again.

HK/CN

Two countries, two out of the fifteen countries on the UN Security Council that voted regarding a resolution to reopen the Strait of Hormuz on April 7, 2026, vetoed the vote. China and Russia, finally showing their hand, and the resolution ultimately failed to pass.

Middle East Energy Shock Snaps China’s Deflationary Streak – Wall Street Journal headline

Where some even argued for China’s involvement in the Iranian conflict, the obvious thing to do was to do absolutely nothing. All they gave was a press conference urging both sides to find a peaceful solution. Where other countries might now suffer the burden of inflation due to oil and gas prices, China meanwhile, much encourage this inflation, which I am certain, deflation and the economy is most definitely on the top of their agenda.

Electric vehicles. BYD 1211HK, reaching a new YTD high. The sector as a whole has seen good marginal improvement in March. BOCOM International research report has stated a MoM increase of 59.4%, led by the adjustments in subsidies policies. Exports of new EVs in March reached 3.49 million units, a YoY increase of 140%, an increase in recognition in the Chinese EV brands. Going back to BYD themselves, their annual report two weeks ago, margin becomes under pressure again, similar to Xiaomi, competing for mobile phone components due to the direct supply competition nature of the two industries, and an increase in competition to the EV market in general.

As for Xiaomi 1810HK, no progress made at all, once again testing the 30-32 HKD range, although not breaking, the volume was really weak, southbound volume has been weak in the name in the last week or so, which may help explain the weak volume in general, but the company is still very much active in their share buyback program, which has helped support the price in this range. Im very much happy to hold this within this range.

Popmart 9992HK, starting to bounce, as mentioned before in previous article looks way oversold, growth was still strong, furthermore should be supported by short covering.

Tech, TCL Electronics 1070HK, gained even more but finally starting to give back some of the gains, Alibaba 9988HK, relatively flat but still on the watchlist looking to buy.

US

Kicking off earnings this week, financials, Goldman Sachs reporting first, and alone, starting off poorly with a miss. David Soloman on record also blasted the research community and analysts at their FICC department, which reportedly missed estimates by 800 Million, this is a pretty wide margin where instead of posting 4.8 Billion posted 4 Billion, a drop from last year. GS down by almost 2% on Monday. Tuesday is where most of the large cohort will report, JPMorgan beating top line and bottom line estimates, with trading operations surging to an all time high, really good buy last week, so was Jefferies, which I am up at around 17%.

Other banks that reported were Citi which also beat top and bottom line estimates, and Wells Fargo, who beat bottom line estimates but missed top line estimates, currently down at around 5%. Reporting tomorrow is BofA and Morgan Stanley. As for private credit, Black Rock reporting and providing much needed assurance to the sectorbeating top and bottom line.

The volatility will still persist, not because of the fragile truce or progression on peace talks, it will also not be about the US blockade of the Strait of Hormuz, but as mentioned last week, the speculation of rate cuts and the state of the economy. What will be in the crosshairs this week are the March inflation report coming out Friday. From a broader view point, the bull run should more or less resume, names that have lagged behind during this period of uncertainty should be bought back, such as Palantir, Zscaler also, back on my watchlist for this week looking to buy.

Amazon, perfect so far, only seen green so far since the coverage, currently up about 17%. The finalisation of the merge with Globalstar, at $90 per share, furthermore the deal with Apple to use Amazon’s NEO satellite infrastructure service for the Iphone satellite service applicable to iphone 14 and later modules. Expecting another day of outperformance.

Intel, also really good trade last week, perhaps even supported by short covering. The foundry buy back analysis last week has to be correct, now starting to give back a little of the gains. Two important deals, joining Elon Musk’s “Terafab” AI chip initiative and also expanding their partnership with Google to supply Xeon CPUs for AI workloads.

Nike, relatively unchanged, makes sense, not much has happened since the report, the clock is ticking for their plan to turnaround.