This was a week that saw shifts in capital flows triggered by the simultaneous impact of rising oil prices and changes in inflation indicators.

Financial Markets in the 4th Week of March (March 16-20)

The global financial markets in the fourth week of March 2026 were not simply about rising or falling. The core question was, “Where did the money leave from, and where did it move to?”

The apparent variables were war, rising oil prices, and inflation. However, what truly moved the markets were the changes in interest rate expectations created by these variables, and the subsequent reallocation of capital.

In this regard, it is more accurate to interpret this week's market as a phase of structural adjustment rather than a trend-following market.

To summarize this week's flow in one sentence: War → Rising Oil Prices → Inflationary Pressure → Retreating Interest Rate Cut Expectations → Capital Reallocation. This structure is not just a theory; it is confirmed by actual data.

Following the rise in international oil prices, the US Producer Price Index (PPI) rose by 0.7% month-on-month, exceeding market expectations. This has significance beyond mere numbers.

The PPI is a leading indicator that moves ahead of the Consumer Price Index (CPI). This means that price increases at the production stage will eventually be passed on to consumer prices with a time lag. The moment the market recognizes this, expectations of interest rate cuts are bound to retreat.

Ultimately, it was not a single data point, but the "sustainability of inflation" that triggered the capital movement.

Capital Flows — Where it Left and Where it Went

The key theme of capital flow this week was "outflow + limited movement."

① Capital Outflow from Technology Stocks

Large technology stocks, which had been leading the market, had risen based on expectations of interest rate cuts. However, the moment the interest rate path becomes shaky, this structure weakens immediately. Interest rates are not just a cost; they are a key variable determining the present value (DCF) of future earnings.

Weakening expectations of interest rate cuts imply a reduction in the valuation premium for growth stocks. Therefore, the outflow of capital from technology stocks can be interpreted not as simple profit-taking, but as a preemptive response to changes in the interest rate structure.

② Three Pillars Where Capital Moved

The outflowing capital moved in the following three directions:

The rise in oil prices is directly linked to the revenue structure of energy companies. Especially since crude oil prices are directly connected to sales and profits rather than costs, the market reacts most quickly to this sector.

This week's capital inflow into energy was not an act of "risk aversion," but an investment in a structure that could convert price increases into profits.

Areas like power grids, transmission and distribution lines, and energy transfer networks maintain a certain level of demand regardless of economic fluctuations. Especially in the context of structurally increasing power demand in the AI era, this sector is being revalued not just as defensive stocks, but as "assets with a structural demand base."

In other words, capital did not just move to safe havens; it moved to assets with confirmed demand.

War increases uncertainty but also increases government spending. Defense industries, in particular, have demand at the national level, making it likely that sales will be maintained regardless of the economy.

However, here too, capital flowed in a limited manner, not for "indiscriminate gains," but only to companies that translated into actual orders and contracts.

The HALO Frenzy — But Capital is 'Selective'

One of the most frequently mentioned concepts in the market this week was HALO. HALO means "physical assets that are difficult to replace with AI." This category includes infrastructure, energy, and heavy industries.

On the surface, this week's capital movement appears to support the HALO concept. However, the actual data tells a different story.

Capital did not flow into HALO as a whole. Instead, it concentrated only on certain assets that met the following conditions:

Is cash flow stable? Does it have pricing power? Is demand structurally guaranteed? In essence, HALO is not an investment target but is acting as a "filter."

Key Variable: China's Supply Capacity

The most important variable in interpreting this week's market was not war, but China.

The market mentioned the possibility of a rise in cyclical industries such as steel, chemicals, and batteries, citing war and supply chain restructuring as reasons. However, actual capital flows did not support this expectation. The reason is clear.

China's supply capacity still controls global prices. Industrial prices are often determined by supply rather than demand. Especially when a country with such massive production capacity as China exists, price increases are limited unless supply is reduced.

A similar phenomenon occurred during the European energy crisis. The reason why the industrial structure did not change drastically despite the crisis was that the supply-side structure remained intact.

Ultimately, the same structure is repeating this time. While there is a "security premium," it does not translate into an "earnings premium."

This is Rotation, Not a Cycle

In this respect, interpreting the current market as the beginning of a cyclical upturn is an overstatement.

A more accurate diagnosis is as follows:

This is a factor rotation phase, not a cycle transition. This means that capital is moving within the existing upward structure, rather than the entire market entering a new upward phase.

This distinction is very important.

Cycle: Entire industry rises

Rotation: Only selected assets rise

The current market clearly leans towards the latter.

Investment Frame — What Did Money Look At to Move?

To summarize this week's capital flows, it is as follows:

Money did not move according to "narratives."

Various narratives emerged, such as HALO, supply chain restructuring, and security premiums, but actual capital followed only the following two criteria:

Does it have cash flow? And does it have pricing power? Even with expectations, capital did not enter industries that did not meet these criteria.

5th Week Checkpoint — Conditions for Maintaining the Trend

Whether the current trend continues depends on three variables.

• Will oil prices remain at their peak?

• Will interest rate cut expectations retreat further?

• Will there be a change in China's supply structure?

If even one of these changes occurs, the current capital movement could be rapidly reversed.

Conclusion

The essence of this week's market is simple.

Money moved. However, the movement was not broad. And the criteria were clear.

Money does not move based on stories. Money only moves to where its structure is confirmed.