CICC: The prevailing narrative of global stagflation may be overstated

```htmlGolden Ten Data reported on April 10 that CICC's research note stated that since March, concerns over the US-Israel-Iran conflict and subsequent worries about the blockage of the Strait of Hormuz have triggered risk-aversion sentiment across the market. Most asset classes, except for oil and agricultural products, have declined, and concerns about the possibility of stagflation are emerging. We believe that the impact of supply shocks is undeniable and may drag down overall economic growth. However, if the Strait of Hormuz gradually resumes navigation, rising geopolitical risks are more likely to intensify the differentiation of the K-shaped economy, causing investment to become hotter while consumption and employment cool; against the backdrop of accelerated AI substitution and endogenous cooling in the labor market, it is difficult for inflation in resources and capital goods to form a “wage-inflation” spiral. In this sense, we believe the mainstream narrative of global stagflation may be exaggerated. We reiterate our view since the beginning of the year: amid intensifying K-shaped economic trends, liquidity recovery from a trough, and continued large fiscal stimulus, a global nominal economic cycle driven by investment is likely to restart its upward trend. The rebalancing of global capital flows across sectors, asset classes, and regions will persist, and the expanding trend of the global capital expenditure cycle will benefit a basket of physical assets and EM markets.```