On February 7, the A-share market will usher in the first trading day of the year of the tiger. Before the Spring Festival this year, the traditional red envelope market of A-Shares did not materialize, so is it possible to reissue the “red envelope” after the festival? In the year of the tiger, which sectors will “add wings to the tiger”?
During the Spring Festival this year (from January 31 to February 4), the overall trend of major overseas stock markets was strong, with Asian stock markets leading the rise. On February 4, China’s Hong Kong stocks ushered in the year of the tiger, with eye-catching performance in the sporting goods concept sector with the concept of the Winter Olympic Games.
In addition, according to “daily economic news” reporter’s statistics on the performance of A-share Shanghai stock index after the Spring Festival holiday since 2003, it is found that in history, the probability of A-share rising in the short term after the Spring Festival is high, of which the probability of Shanghai stock index rising in the five days after the Spring Festival is 78.95%.
It is worth noting that since 2003, the Shanghai Composite Index has fallen by more than 5% within 20 days after the Spring Festival holiday for three times, and the Shanghai Composite Index has also fallen in the corresponding lunar year in these three years.
During the Spring Festival, the overseas stock market is strong {123567}
Hang Seng Index rose more than 4%, and A50 futures index rose 1.33%
During the Spring Festival holiday (from January 31 to February 4), major overseas stock markets showed a rebound trend. The three major stock indexes of U.S. stocks rebounded after oversold, among which the NASDAQ performed best.
From the global market, during the Spring Festival holiday, Asian stock markets rose the most, with the Hang Seng Index, South Korea composite index, Nikkei 225 and Mumbai sensex30 index rising by 4.34%, 3.26%, 2.7% and 2.53% respectively.
Recent trend of A50 futures index
(picture source: Wenhua Finance)
Driven by overseas markets, the FTSE China A50 Index also rebounded during the Spring Festival holiday, with a cumulative increase of 1.33% from January 31 to February 4.
the Hong Kong stock market has made a good start in the year of the tiger
the performance of new energy vehicles is eye-catching
Bohai Securities has made statistics on the relationship between the rise and fall of major overseas indexes during the Spring Festival and the rise and fall of the Shanghai Composite Index in the week after the festival over the past 10 years. It is found that the performance of the Hang Seng Index during the Spring Festival holiday has a certain positive correlation with the rise of the Shanghai Composite Index after the festival, with a correlation coefficient of 0.27, while the other overseas indexes have no obvious correlation with the rise of the Shanghai Composite Index.
From January 31 to February 4 this year, the Hong Kong stock market has experienced a total of two trading days. In the five years from 2016 to 2020, the performance of Hang Seng Index during the Spring Festival holiday was positively correlated with that of Shanghai index in the first five trading days after the Spring Festival.
On January 31, the last trading day of the year of the ox, the Hang Seng Index rose 1.07%. When the market opened on February 4, the Hong Kong stock market ushered in the year of the tiger, and the Hang Seng Index rose 3.24% throughout the day. In terms of probability, this also indicates that the A-share market is also expected to have a good start in the early stage after the festival.
Li Ning’s share price trend on February 4
From the day of February 4, sporting goods stocks with the concept of Winter Olympics, such as Li Ning, Anta sports and special step international, rose strongly, of which Li Ning rose 7.63%.
February 4 Haidilao stock price trend
In addition, the concept of industry recovery in the post epidemic era such as catering also performed well on the first trading day of the year of the tiger in Hong Kong stocks, with Haidilao, Xiabu and jiumaojiu rising by 8.22%, 7.11% and 5.88% respectively.
on February 4, the stock price trend of ideal automobile in Hong Kong stock market
On February 4, the outstanding performance of the Hong Kong stock market also included the biomedical sector and the new energy vehicle sector with the characteristics of oversold rebound.
combing the history of four rounds of US dollar interest rate hike cycles
how do commodities perform?
During the Spring Festival this year, the ranking of the performance of major overseas commodities is: Crude Oil > copper > Gold > natural gas.
In this regard, the macro team of Minsheng securities recently commented that affected by the severe cold weather, the crude oil supply of various countries was blocked, and the increase in production was not increased at the latest OPEC meeting, resulting in a sharp rise in oil prices recently. Due to the slowdown of geopolitical factors, natural gas prices fell. In terms of gold, although monetary policies in Europe and the United States are tightening, the price of gold is very resilient, showing a shock upward.
According to the general prediction of institutions, the Federal Reserve is expected to start raising interest rates this year. So from a historical point of view, after the United States enters the interest rate hike cycle, what impact will it have on commodity prices?
According to the statistics of Haitong Securities Company Limited(600837) metals team, since the 1990s, the Federal Reserve has experienced four interest rate hike cycles, namely, 1994-1995, 1999-2000, 2004-2006 and 2015-2018. The corresponding time spans are 12 months, 11 months, 24 months and 37 months respectively; The number of interest rate increases is 7, 6, 17 and 9 respectively.
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interest rate increase cycle from 1994 to 1995: strong copper price
In the interest rate hike cycle from 1994 to 1995, the Federal Reserve raised the benchmark interest rate from 3% to 6%. In order to avoid the resurgence of inflation, the Federal Reserve raised interest rates seven times during this period. It is noteworthy that on November 15, 1994, the Federal Reserve raised interest rates by 75bp at one time, the largest rate increase since the 1980s.
In this round of interest rate increase cycle, the price of gold fell after shock, and the performance of copper was relatively strong. Gold prices fell from $388 / oz to $376 / oz, an increase of – 0.3%. Soybean prices fell from 674 cents / bushel to 546 cents / bushel, an increase of – 19%. Over the same period, copper price rose from US $1907 / ton to US $2885 / ton, an increase of 51.3%. The price of oil distribution rose from US $14.27/barrel to US $16.88/barrel, an increase of 18.3%.
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interest rate increase cycle from 1999 to 2000: general rise of bulk commodities
In the interest rate hike cycle from 1999 to 2000, the Federal Reserve raised the benchmark interest rate from 4.75% to 6.5%. The range and number of interest rate hikes in this interest rate hike cycle is the smallest in the previous interest rate hike cycles since 1983.
Gold rose 5.7% from US $261 / oz to US $276 / oz. Soybean prices rose 18% from 460 cents / bushel to 543 cents / bushel. over the same period, the copper price rose from US $1643 / ton to US $1848 / ton, an increase of 12.5%.
The price of oil distribution rose from US $17.15/barrel to US $28.10/barrel, an increase of 63.8%.
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Interest rate increase cycle from 2004 to 2006: commodities ushered in a bull market
In the interest rate hike cycle from 2004 to 2006, the Federal Reserve raised the benchmark interest rate from 1.00% to 5.25%. In 2004, the Federal Reserve began to tighten policy, raising interest rates 17 times in a row, with a cumulative range of 425bp. This round of interest rate increase cycle is the longest and the largest one since 1983.
in this round of interest rate increase cycle, except for soybeans, the prices of gold, cloth oil and copper rose sharply, while copper and cloth oil walked out of the first wave of bull market since the 1990s. gold rose 48.9% from $396 to $589 an ounce. Soybean prices fell from 669 cents / bushel to 609 cents / bushel, an increase of – 8.9%. Over the same period, the copper price rose from US $2650 / ton to US $7280 / ton, an increase of 174.72%. The price of oil distribution rose from US $34.5/barrel to US $72.88/barrel, an increase of 111.25%.
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interest rate increase cycle from 2015 to 2018: the pace of interest rate increase is slow, and commodity prices are stable and upward
In the interest rate hike cycle from 2015 to 2018, the Federal Reserve raised the benchmark interest rate from 0.25% to 2.50%. After the 2008 financial crisis, the Federal Reserve continued to reduce interest rates and maintained a low interest rate policy for a long time until 2015. Since the end of 2015, the US economy has shown obvious signs of recovery, with the unemployment rate falling below 5% and the CPI rising above 2%.
This interest rate hike is different from the previous interest rate hike cycle. The pace of interest rate hike is slow. In the first half of 2016, the growth of U.S. GDP decreased, and the U.S. economy only recovered moderately. When the economic and inflation levels showed a significant upward trend again at the end of 2016, the Federal Reserve continued to raise interest rates for eight consecutive times.
In this round of interest rate increase cycle, soybean prices fluctuated upward, gold and copper prices rose steadily, oil distribution prices fell slightly after strong growth in the interest rate increase cycle, and the growth of copper and oil distribution was significantly weaker than that in the previous interest rate increase cycle. gold rose 20.0% from $1049 to $1260 an ounce. Soybean prices rose from 877 cents / bushel to 906 cents / bushel, an increase of 3.2%. Over the same period, the copper price rose from US $4550 / ton to US $6017 / ton, an increase of 32.3%. The price of oil distribution rose from US $37.62/barrel to US $54.65/barrel, an increase of 45.3%.
Will A shares enter a bear market?
most institutions are optimistic about the good start of the year of the tiger
In order to look forward to the possible operation trend of the A-share market after the Spring Festival, some brokerage research institutes have worked overtime to release relevant views in recent days.
The reporter of the daily economic news noted that some brokerage research teams who had previously been optimistic about the cross year market at the beginning of this year continue to be optimistic that the year of the tiger will have a good start.
The strategy team recently pointed out that during the Spring Festival holiday, the overall performance of the overseas market is good. The market gradually digested the Fed’s expectation of raising interest rates, the overall risk appetite rebounded, and the NASDAQ led the market rebound. Among them, the China concept Internet sector showed strong performance, with a sharp rise of nearly 10% on February 1. Hong Kong stocks also made a good start in the year of the tiger and strengthened significantly under the leadership of the science and technology sector. for a shares, the pre holiday market has been significantly corrected, and the risk sentiment has been basically fully released. The strong performance of peripheral markets is expected to boost the risk appetite of A-share investors after the holiday, and A-Shares are also expected to have a good start.
The Haitong Securities Company Limited(600837) strategy team released a research report on February 5, “The decline at the beginning of 2022 does not change the law of the spring market. Judging from the amplitude of the index, there is still room for A-Shares to rise compared with the opening price this year. Referring to the market law over the years, we believe that the spring market may be a better window period. Since the beginning of the year, the continuous decline of major indexes has made some investors worry that there may be no spring market this year. However, after reviewing history, we find that in the past 20 years During the year, the restless market of A-Shares at the end of the year and the beginning of the year was never absent. During this period, the average maximum increases of the Shanghai and Shenzhen 300 and the Shanghai composite index were 24% and 22% respectively. “
According to the statistics of Haitong Securities Company Limited(600837) strategy team, in 2002, 2003, 2010, 2011, 2012, 2014, 2016 and 2019, A-Shares experienced a year-on-year decline similar to the current market, but the index will rise in the first quarter after each fall in the first eight years. The Haitong Securities Company Limited(600837) strategy team reviewed six situations after the share reform in 2005:
● ① at the beginning of 2010: the Shanghai Composite Index fell at the beginning of the year, with a maximum decline of 12% by February 3, 2010, and then the index rose all the way to April 15, with a maximum increase of 10% in the range.
● ② at the beginning of 2011: the Shanghai composite index continued its decline at the end of 2010. From the beginning of the year to January 25, the maximum decline of the index range was 7% (if calculated from the index high in November 2010, the maximum decline was 16%), and then the index rose all the way to April 18, with the maximum increase of 15%.
● ③ at the beginning of 2012: although the Shanghai composite index continued its decline in 2011, it only fell for two trading days, and then rose all the way to February 27, with the maximum increase of 16%. The gem index fell all the way from the beginning of the year to January 19. From the high point in November 2011, the maximum decline in the range was 34%. Then the gem index also began to rise all the way, and the maximum increase of the gem index was 30% on March 14.
● ④ early 2014: the Shanghai composite index continued its decline at the end of 2013 at the beginning of the year. From the beginning of the year to January 20, the maximum decline of the index range was 6% (if calculated from the index high in December 2013, the maximum decline was 12%), and then the index rose to February 20, with the maximum increase of 10%.
● ⑤ at the beginning of 2016: the Shanghai Composite Index fell continuously at the beginning of the year. By January 27, 2016, the index fell by 25%, and then the index rose all the way to April 15, with a maximum increase of 17%.
● ⑥ early 2019: similar to 2012, the Shanghai Composite Index rose after falling for two trading days at the beginning of the year, and the maximum increase of the index was 35% on April 8.
Based on the recent market worries about the 2022 market, Haitong Securities Company Limited(600837) strategy team judged that, “2022 should not be a bear market like 2008, 2011 and 2018. The market fell continuously in January, and some investors began to worry about whether this year will be a bear market. We think it is unlikely that this year will be a big bear market. Looking back on the three typical bear markets in history, i.e. 2008, 2011 and 2018, the decline of the market mainly comes from the killing of Valuation: the CSI 300 index fell 66% in 2008, and the CSI 300pe (TTM) fell 70% in the whole year under the overall method; In 2011, CSI 300 index fell by 25% and PE (TTM) fell by 32%; In 2018, the CSI 300 index fell by 25% and PE (TTM) fell by 28%.
There are two reasons for the decline in valuation. One is that the valuation itself was at a high level before the stock market fell, and the other is that the policy has begun to tighten significantly. “
\u3000\u3000 “Back to the present, first of all, the current stock market valuation is not high. From the overall perspective of the stock market, the current CSI 300pe is only 13 times, the risk premium rate of the stock market relative to the ten-year Treasury bond is in the quantile from high to low 35% since 2013, and the ratio of CSI 300 dividend rate to the ten-year Treasury bond is also in the quantile from high to low 31% since 2013. The valuation is not high. From the perspective of the industry, we calculate 125 historical quantiles of PE (TTM, overall method) in Shenwan secondary industry are. At present, the proportion of PE in industries with a quantile of more than 50% from low to high since 2005 is 31%. As a comparison, the proportion data in early 2018, early 2011 and early 2008 are 43%, 60% and 88%. On the whole, the current valuation pressure of A-Shares is actually very small. From a policy perspective, the high-level meeting in December last year released an obvious signal of steady growth. The central bank lowered the deposit reserve ratio in December, lowered the MLF and SLF interest rates in January this year, and lowered the LPR interest rate in December last year and January this year. On the whole, under the combination of low valuation and loose policy, the stock market will probably not be a big bear market this year. “
it is worth noting that some strategic teams that were not optimistic about the cross-year market also began to “flip more”. For example, the latest view released by the Western Securities Co.Ltd(002673) strategy team, which predicted at the end of last year that there would be no “Spring Festival agitation” this year, pointed out that the low point of the A-share market in the first half of the year may have appeared. At the current time point, investors can gradually turn optimistic about the market and actively layout the market in the first half of the year.
In addition, Western Securities Co.Ltd(002673) strategy team suggests to grasp four main lines from the structure: ① with the annual report performance gradually fulfilled, the new energy sector is expected to become the phased main line of the market after the Spring Festival; ② Securities companies benefiting from the transaction recovery and registration system; ③ Offline economy represented by catering tourism and commercial retail; ④ Essential consumer goods benefiting from price transmission from PPI to CPI, especially the agricultural sector.
some market participants remain cautious about the trend of the A-share market after the festival, because with WTI crude oil breaking through $90, the US dollar interest rate increase cycle is coming, and IPO expansion.
the trend of A-Shares after the Spring Festival in recent 20 years
who will “add wings to the tiger” in the year of the tiger?
According to the statistics on the sectional performance of Shanghai stock index after the Spring Festival holiday by the reporter of the daily economic news since 2003, it is found that in the past 20 years, the probability of A-share rising in the short term after the long Spring Festival holiday is high. The specific statistics are as follows:
the probability of Shanghai stock index rising within 5 days after the Spring Festival is 78.95%, 68.42% within 10 days and 68.42% within 20 days.
Although the short-term performance of the market is usually accidental, it is worth noting that from the short-term performance of the Shanghai stock index after the Spring Festival holiday since 2003, the Shanghai stock index fell within 5 days, 10 days and 20 days after the Spring Festival, and the decline continued to expand, respectively in 2013 and 2021. The Shanghai Composite Index also fell in the two corresponding lunar years (the year of the snake and the year of the ox respectively).
In addition, since 2003, the Shanghai Composite Index has fallen by more than 5% within 20 days after the Spring Festival holiday for three times, namely in 2008, 2013 and 2021. The Shanghai Composite Index also fell in the corresponding lunar years (the year of rat, the year of snake and the year of ox).
However, in the year of the rat and the year of the snake, the year of the ox and the year of the horse A-share market both saw a sharp rise in the bull market. Among them, the year of the ox (2009-2010) Shanghai index rose 51.6% and the year of the horse (2014-2015) Shanghai index rose 59.7%.
the reporter repeated the US dollar interest rate hike cycle from 2015 to 2018 and found that the A-share market switched from growth to value style. Banks and insurance stocks with undervalued value performed well in the same period. In addition, some Maos with reasonable valuation and high growth certainty also performed well. From the callback in the second half of 2015, value stocks performed steadily in the early stage of the decline. After the value stocks made up the decline (early 2016), the market saw an operable bottom.
so who will “add wings to the tiger” in the year of the tiger? From the recent news, institutions have strengthened the research on the undervalued sector, such as the banking sector.
Opening guide for the year of the tiger! These factors support the rebound of A-Shares in the Spring Festival and grasp the allocation opportunities of four main lines!
the five “tigers” of the fund have judged the investment: the medium and long-term trend of A-Shares is still good in the period of economic stabilization, and the investment opportunities in the year of the tiger are more balanced
