Garrett Jin: AI Weakens Market Sensitivity to Oil Prices Amid Middle East Conflict

Garrett Jin, representative of '1011 Insider Whale,' commented on the market dynamics amid the Middle East conflict, noting that the Strait of Hormuz has been effectively 'blocked' for three months. According to Odaily, Jin stated that the market has become desensitized to this geopolitical risk, with AI narratives altering traditional risk pricing logic. AI is significantly reducing market sensitivity to oil prices and geopolitical shocks. Since ceasefire signals emerged, U.S. stocks and energy impacts have decoupled, with chip and tech stocks rising to offset energy sector effects, leading to a gradual disregard for Hormuz risks. However, Jin cautioned that the AI sector faces short-term valuation and crowded trading risks, which could lead to a correction. In the energy market, Jin's previous assessment that Hormuz risks were not fully priced was validated, as oil prices rose due to supply shock expectations but peaked and retreated following strategic reserve releases and U.S. intervention as the 'last supplier.' He believes the current risk-reward ratio for oil prices is no longer attractive. On the macro and equity market front, U.S. household stock holdings have reached approximately 47% of financial assets, surpassing levels seen during the internet bubble, which could reverse policy constraints during market downturns. The VIX volatility index has triggered different policy shift thresholds near 30 and 50, reflecting 'risk-off driven policy' characteristics. In the gold market, recent gold price corrections are attributed to long-term structural demand changes rather than the fading of war premiums. Since 2022, global central banks have consistently purchased gold at an annual rate of around 1,000 tons, primarily to hedge against de-dollarization and sanction risks. Jin defines gold as the 'ultimate exit tool outside the dollar system,' rather than merely a safe-haven asset. In the crypto market, a liquidity turning point occurred last October, with funds increasingly flowing into AI assets, causing a temporary drain in the crypto market. Jin believes the market remains in a cyclical bear phase, with rebounds not equating to the start of a new bull market. The market awaits the restart of new cycle liquidity. The AI era is becoming a new capital-dominant narrative, offering structural opportunities despite bubbles, which Jin describes as a 'rare window period for ordinary investors,' but emphasizes the importance of adhering to market cycle discipline.