The “policy bottom” has been clarified, the “emotional bottom” is coming, and the “market bottom” is gradually approaching.First of all, the data shows that the maximum point of economic downward pressure has passed, but the dependence on policy is still strong.currencyAfter the first efforts exceeded expectations, the policies of other ministries and local governments are forming a joint force, and the “policy bottom” has been clarified. Secondly, the emotional catharsis induced by the disintegration of the high-level group is coming to an end. The short-term adjustment of the market is not only deviating from the trend of monetary easing, but also deviating from the fundamental trend of policy support. The differentiation of domestic and foreign capital behavior is also evidence that the “emotional bottom” is coming. Finally, with the continuous improvement of the consensus on the main line of stable growth, the venting of emotions is coming to an end. It is expected that the market capital will resume inflow, and the “market bottom” is gradually approaching. Deploy high-quality blue chips to meet the starting point of the market in the first half of the year.
The “policy bottom” has been clarified, and the currency’s advance force exceeds
It is expected that other relay policies are forming a synergy
1) Year-end data in line with expectations showed that the point of greatest downward pressure on the economy has passed.First of all, the overall economic data at the end of 2021 is in line with expectations, and the whole yearGDPIt was 8.1% year-on-year, and the two-year compound growth rate was 5.1%. At the same time, in the medium term, it still faced the triple pressure of demand contraction, supply shock, and weakening expectations. Secondly, the point of greatest economic pressure has passed. The average growth rate of infrastructure investment in a single month and two years has rebounded by nearly 5.0pcs, and manufacturing investment and exports have also remained in a relatively high boom range. Once again, this round of imported epidemics has tended to improve. The peak of confirmed cases in major epidemic areas has passed, and the daily increase in confirmed cases in the country has dropped significantly. In the future, the management and control experience of new virus strains will be more experienced, and the epidemic and epidemic prevention will negatively affect consumption. It is also expected to ease rapidly after April. At the same time, the market’s anxiety about fundamentals is mainly reflected in the downturn in real estate investment and the lower-than-expected consumption. The repair and rebalancing of economic expectations is still strongly dependent on policies.
2) After the monetary policy is stronger than expected, other relay policies are forming a synergy.On January 17 and 20, the central bank lowered the MLF, SLF, and 7-day reverse respectively.repoand LPRinterest rate, the comprehensive rate cut further released the signal of “wide currency”, and the time and magnitude exceeded market expectations, reflecting the determination to stabilize growth. It is expected that the RMB exchange rate will remain stable, and external changes such as the Fed’s easing and exit will not restrict the domestic policy style of “maintaining me”.according toCITIC SecuritiesThe fixed income group of the Research Department predicts that there is still room for one or two interest rate cuts this year, and March to April is the next observation window. At the same time, various ministries and commissions have issued policies in a centralized manner to “stabilize growth” from multiple dimensions, including supporting small and micro enterprises, investing in infrastructure, promoting consumption, developing the digital economy, and stabilizing foreign trade. After the force of monetary policy, the market’s focus shifted to credit that supports demand.according toCITIC SecuritiesThe Macro Group of the Research Department predicts that the stock of social financing is expected to increase by 10.3% year-on-year in January this year, and the growth rate will be flat month-on-month; structurally, it is estimated that new RMB loans will be about 4 trillion yuan, slightly higher than the same period last year, and the scale of government bond issuance is 800 billion yuan , an increase of about 560 billion yuan compared with the same period last year.
3) The local “two sessions” show that the trend of stabilizing the economy through investment is obvious and the intensity is strong.according toCITIC SecuritiesAccording to the analysis of the “two sessions” reports of 26 provinces and cities currently announced by the Macro Group of the Research Department, “steady growth” has become one of the clear priorities. First of all, the 2022 GDP growth targets proposed by various regions are basically higher than their average growth rates in the past two years. The total GDP of regions that have published government work reports accounts for 87% of the country (refer to 2020 data), and the national GDP is calculated based on this. The growth rate can be completed by more than 5.5%. Second, all regions regard investment as an important starting point for achieving growth goals. 16 provinces have set investment growth targets, ranging from 6.5% to 10%, showing a trend of “infrastructure-driven, manufacturing upgrades, and real estate support”. Finally, under the background that the central government requires investment to be moderately advanced, it is expected that governments at all levels will also act more actively this year to ensure a good start for investment in the first quarter.
The “emotional bottom” is coming, and the high position will collapse
Induced emotional catharsis draws to a close
1) The catharsis of market sentiment is the main reason for the amplification of short-term market volatility.Since the beginning of this year, the rapid adjustment of high-level holding group stocks has successively induced investors to speed up and lighten their positions in “high cut low” transactions. New energy vehicle/photovoltaic/semiconductor/Thematic sectors such as the military index have generally declined by more than 10% since 2022. The emotional catharsis induced by trading factors has increased market volatility, leading to confusion in the main line since January.currentperformanceDuring the notice window period, under the low market sentiment, the average performance increase of “pre-happy” companies in the two trading days after disclosing the notice was only 0.4%/-0.3%, while the average increase of “early warning” companies was -1.7%/- 1.1%. At the same time, the recent anxiety about the negative resonance of overseas stock markets and the unsatisfactory performance has further accelerated the venting of market sentiment.
2) The impact of overseas market risks on the domestic market is limited to sentiment, and the trend of global capital allocation to A shares is still clear.Under the Fed’s hawkish statement and high inflation, overseas liquidity expectations continued to be suppressed. Recently, the yield of U.S. bonds has risen sharply. The 10-year yield once exceeded 1.88%, which continued to suppress the high valuation of U.S. stocks in the previous period, bringing negative resonance in the global equity market. This year, the S&P 500 and NASDAQ have fallen by 7.7% and 12%. .according toCITIC SecuritiesThe macro team of the Research Department judges that under the benchmark scenario, the Fed may raise interest rates three times a year and start to shrink its balance sheet in June. In this round of tightening cycle, Taper’s operations of completing, raising interest rates and shrinking the balance sheet may be more compact.However, the recent continuous and rapid inflow of northbound funds shows that this round of overseas stock market adjustment has a negative impact on A shares.Cash flowThere is no real impact, the main impact is limited to the emotional side. The increase in foreign investment’s preference for RMB assets stems from the fact that in 2022, China’s market environment of “low inflation + loose policies + reasonable equity valuation” will still be better than developed markets in Europe and the United States“QualcommThe combination of “inflation + tight policy + high equity valuation” is better than most emerging economies with high inflation and weak growth.
3) The “sentiment bottom” is coming, and the consensus on stable growth will be the key to boosting market sentiment.First, after the “policy bottom” is clarified, the growth stabilization policy will form a synergy, and the financing bottom will be confirmed to raise fundamental expectations, which will become the basis of the “emotional bottom”. Secondly, the expectation of tightening overseas liquidity has no actual impact on the allocation of northbound funds to A shares, and market-related anxiety is expected to be gradually repaired. Finally, the A-share market has passed the most emotional panic point, and the short-term adjustment deviates from the trend of monetary easing and the fundamental trend supported by policy. The emotional catharsis induced by the disintegration of the high-level group is coming to an end, and the “emotional bottom” is coming.
The “market bottom” is gradually approaching, closely following the “two lows”
The main line welcomes the starting point of the market in the first half of the year
1) The catharsis of investor sentiment is coming to an end, and the market capital will resume inflow.First of all, the bond market has taken the lead in forming a consensus of “wide money + wide credit”. After the central bank cut interest rates unexpectedly, the yield on 10-year government bonds further fell by 9bps to 2.75% last week. In terms of credit bonds, urban investment and real estate bonds have also seen significant repairs in the short term.In terms of capital flow, foreign capital is actively deploying on the left side, and northbound capital has accumulated since 2022net inflow42.8 billion yuan, a large net inflow of 29.2 billion yuan in the past week, mainly increased allocation to low-valued sectors dominated by large finance; the application and redemption of public offering products in the past two weeks has been relatively stable,CITIC SecuritieschannelresearchThe data show that the weekly net redemption rate basically remained at a low level of 4~5‰, and there was no significant net redemption in the process of market decline. The inflow of long-term funds has resumed, the behavior of investors will become more rational, and the market capital will improve.
2) The “emotional bottom” is coming, and the “market bottom” is gradually approaching.On the one hand, the “policy bottom” has been clarified, and other relay policies are forming a synergy; on the other hand, the “emotional bottom” is coming, and the emotional release brought about by the collapse of high-level holding groups is coming to an end. We expect that as investors’ confidence in stabilizing growth policies and economic stabilization continues to strengthen, the consensus on the main line of stabilizing growth will continue to improve, and confidence and sentiment in the market will also be boosted; as funds resume steady net inflows, the “market bottom” Gradually approaching, and the catharsis of short-term market sentiment brings better buying points, it is recommended to meet the starting point of the market in the first half of the year.
3) Follow the main line of “steady growth” and continue to deploy high-quality blue chips around the “two lows”.Specifically: varieties whose fundamentals are expected to remain at a low level, focusing on midstream manufacturing that was suppressed by cost issues in the early stage, such asvehicle、Lithium battery、Photovoltaic equipmentetc., the fundamentals are expected to remain lowduty freeandentertainmentContent consumption; the valuation is still relatively low, it is recommended to pay attention to the real estate credit risk after the expected mitigationquality developer、building materialsandhomeEnterprises, after experiencing the impact of Chinese concept stocksHong Kong Stock ConnectNetDragonhead, as well as those with the ability to develop new businesses such as new materialsFine Chemicalsenterprise.
(Article Source:brokerageChina)