A shares performed poorly in the last trading week before the Spring Festival, and all major indexes showed a downward trend. The indexes with the best performance in the week were Chuang growth, gem 50, small and medium-sized 100, Shenzhen Stock Exchange 100 and other indexes. The indexes with large declines during the week were entrepreneurship blue chip, national securities 2000, China Securities 500 and other indexes. The top indexes since the beginning of the year are dividend index, CSI 100, SSE 50 and SSE 180.
Since the beginning of the year, the top performance sectors are banking, real estate, architectural decoration, transportation and coal, and the worst performance sectors are national defense and military industry, medicine and biology, media and beauty care. Affected by the market, all sectors have performed poorly in the past week. Among them, power equipment, agriculture, forestry, animal husbandry and fishery, commerce and retail and other sectors decreased slightly. The computer and media sectors performed poorly.
This week, the northward capital generally showed a net outflow, and the net purchase amount of foreign capital was -26.071 billion yuan. The top five stocks that foreign investors bought in this week were China Merchants Bank Co.Ltd(600036) (1.372 billion yuan), China Railway Group Limited(601390) (514 million yuan), sunshine energy (501 million yuan), Nari Technology Co.Ltd(600406) (490 million yuan) and satellite Chemistry (469 million yuan). The top five stocks of this week's net outflow of foreign capital were Kweichow Moutai Co.Ltd(600519) (- 3.004 billion yuan), Contemporary Amperex Technology Co.Limited(300750) (- 2.245 billion yuan), Ping An Insurance (Group) Company Of China Ltd(601318) (- 1.56 billion yuan), Wuxi Apptec Co.Ltd(603259) (- 1.183 billion yuan) and Jiangsu Hengrui Medicine Co.Ltd(600276) (- 972 million yuan).
In this week's global macroeconomic data, China's Manufacturing Purchasing Manager Index (PMI) was 50.1% in January, down 0.2 percentage points from the previous month, higher than the critical point. The pace of manufacturing expansion slowed down, the economy achieved a stable start, and the production of enterprises remained stable. Internationally, the EU's GDP in the fourth quarter increased by 4.6% year-on-year, slightly lower than the expected 4.7%. The overall GDP of the 27 EU countries increased by 0.4% month on month and 4.8% year-on-year in the fourth quarter of last year. Data show that the growth of the euro zone and the EU in the fourth quarter was significantly slower than that in the previous quarter. The PPI of EU in December increased by 26.2% year-on-year, continuing the rapid growth trend. The manufacturing PMI index of the United States in January was 57.6%, down 2% from the previous period. Affected by the Omicron epidemic, the number of ADP employees in the United States decreased by 300000 in January, a new low since April 2020.
During the Spring Festival, the yield of us 10-year Treasury bonds rose to 1.93%, the highest since February 2020. At present, the yield of us two-year Treasury bonds (currently 1.31%, up 110bp from last year) is still 13bp away and will return to the pre epidemic level, which will be the core sign of the normalization of short-term interest rates. It is believed that the US bond yield soared before this round of interest rate hike and is about to reach its peak. The current deviation between the downward trend of China's risk-free return and the upward trend of foreign risk-free return is very similar to the two quarters before December 2015 (the first interest rate hike in the United States). Once the pace of interest rate hike similar to 2016 slows down after the first interest rate hike by the Federal Reserve, it is very likely to see the same correction of China US risk-free return similar to q1-q3 in 2016.
Investment strategy: during the Spring Festival, the yield of us 10-year Treasury bonds rose to 1.93%, a new high since February 2020. At present, the yield of us two-year Treasury bonds (currently 1.31%, up 110bp from last year) is still 13bp away and will return to the pre epidemic level, which will be the core sign of the normalization of short-term interest rates. The US bond yield soared before the current round of interest rate hike, and is about to reach its peak. Short term market volatility is expected to come to an end. Once the pace of overseas interest rate hikes slows down, it will bring new opportunities for valuation repair to China's equity market. It is recommended to continue the layout of new energy, consumer electronics, semiconductors, national defense and military industries.
Risk tip: Overseas liquidity risk, China's monetary policy tightening risk
