Positive news emerged frequently during the visit to China. How to seize the rotation rhythm?

🔍Brief comments on Trump and the business delegation's visit to China:

1. What changes have been brought by Trump’s visit to China with his delegation?

The first thing Trump’s visit to China changes for the market is not fundamentals, butthe pricing of tail risks and the slope of policy expectations.。

The impact of such high-level diplomatic events on the US stock market is fundamentally determined by three main threads:

① The degree to which the event eases the tail risks of Sino-US frictions.

② The industry distribution indicated by the accompanying companies and potential agreements.

③ The intensity of the original main market themes and the strength of catalysts.

This round of delegation has an extremely high weight in technology, covering $Apple (AAPL.US)$ 、 $NVIDIA (NVDA.US)$ 、 $Qualcomm (QCOM.US)$ 、 $Micron Technology (MU.US)$$Meta Platforms (META.US)$ etc., the signals for the technology sector's leadership have become very clear.

II. Three phases of rotation: rhythm and logic

📱 Phase One | Technology: valuation recovery takes the lead

Tech stocks are the most sensitive to the 'slope of policy expectations'—as long as expectations shift fromtightening to marginally stable,they can benefit from discount recovery.

$NVIDIA (NVDA.US)$ 、 $Qualcomm (QCOM.US)$ 、 $Apple (AAPL.US)$ 、 $Tesla (TSLA.US)$ Chinese-exposed assets that were previously suppressed due to policy uncertainty, such as those in sectors like tech, will exhibit the greatest elasticity during the phase of declining risk premiums.

🏭 Stage Two | Finance and Industry: Order realization-driven

This usually occurs after the market confirms that talks are not just a one-time showcase.

More specific topics—trade negotiations, cross-border M&A, aviation mega-deals, payment clearing—will push finance and industryfrom being sentiment beneficiaries towards a logic of improving order visibility.。

$Boeing (BA.US)$ The opportunity logic here is closer to "upward revision of earnings expectations + increased order visibility," which differs from the valuation recovery path of tech. This represents a truly meaningfulearnings-based alpha.。

🌾 Phase Three | Agriculture and Energy: A Political Showcase with Limited Alpha

Agriculture and energy are the fields where both sides can most easily showcase political achievements, but they are constrained by oil prices and global demand,and typically are not the preferred source for medium-term excess returns. They are suitable as a portfolio hedge allocation rather than an active overweight direction.

III. The Nature of Excess Returns: Emotional Gains vs Earnings Gains

In the short term, excess returns are more likely to come from 'emotional gains,' meaningvaluation expansion and risk premium compression。

After entering the 1-3 month period, only sectors validated by the following factors can convert thematic rallies into sustained excess returns:

📦 Order fulfillment, agreements turning into visible procurement/contracts.

💰 Capital expenditure increases, upward revisions in corporate production expansion/R&D guidance.

🔓 Policy restrictions loosened, with export control exemptions and a temporary hold on the entity list.

📈 Upward revision of earnings expectations, with analysts following up by raising EPS forecasts.

From both a historical perspective and this round of intersections,Technology exhibits the strongest sustainability; the elasticity of industrials/aviation depends on the speed of large order fulfillment; finance benefits from improved risk appetite but is constrained by interest rate paths in terms of sustainability.

The technology sector holds the greatest policy-driven upside potential, where there may be a relaxation of selective export controls. Should the US selectively exempt certain wafer fabrication equipment (WFE) or specific H-series chips from export controls in exchange for eased rare earth export restrictions from China Rareearth,An upward revision in earnings expectations will become the most solid support for excess returns in the technology sector.。

Fourth, two key verification variables

① Whether there will be any material marginal changes to technology export controls

If any one of the following signs appears, the technology sector still has room to outperform:

✅ WFE equipment exemption

✅ H200 specific chip exemption

✅ Entity list additions deferred

Otherwise, it reverts to pure sentiment-driven trading with limited sustainability.

② Whether oil prices and long-term interest rates align

🟢 Positive: Visit to China eases Hormuz tensions → Oil prices retreat, long-term interest rates stabilize → Growth stocks gain stronger valuation support

🔴 Negative: Oil prices surge again, 10Y US Treasury > 4.5% → Sustainability of "technology first" significantly weakened

Conclusion

The core logic of this round of China visit trades is:First, price in the elimination of tail risks, then wait for substantive policy implementation, and finally use earnings verification to determine who can retain excess returns.

Timing is more important than position, and verification is more critical than expectations.

Amid a series of positive developments during the visit to China, how can one seize the rotation rhythm?

Replay

⏰ Next Monday at 16:30, a senior investment research expert from Futu Private Wealth will review the week's market highlights and provide an in-depth analysis: Trump's visit to China, how will US stocks rotate? Breaking down the sources of excess returns!

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