Key investment points:
Market review: in terms of the deep correction of the two cities and the substantial outflow of funds from the north, the Wande all a index fell sharply in the past five trading days, with a cumulative decline of 5.01%. The turnover decreased significantly, or mainly due to the impact of panic and pre holiday effect, the total net outflow of northbound funds this week was 26.071 billion yuan. In the past five trading days, the industry sector (shenwanyi level) showed a general decline, among which computers, media, medicine and biology, food and beverage and automobiles led the decline.
The IMF lowered its global economic growth forecast for 2022, and inflation may continue until 2023
Recently, the IMF released the latest global economic outlook report, which believes that the global economic growth will slow down and inflation will last longer. Specifically, the report lowered the forecast value of global economic growth in 2022 by 0.5 percentage points to 4.4%. Among them, the U.S. economic growth expectation was reduced by 1.2 percentage points to 4%, mainly due to the earlier than previously expected start of the Fed's monetary normalization process and the continuation of supply chain disturbance. The expected growth rate of the euro area economy will be lowered by 0.4 percentage points to 3.9%. On the one hand, because it faces long-term supply constraints, on the other hand, under the counterattack of the severe epidemic, the personnel mobility restrictions implemented at the end of 2021 are expected to drag down the economic growth in early 2022. In emerging markets, the expected growth rate of China's economy was reduced by 0.8 percentage points to 4.8%, mainly due to the contraction of the real estate sector and the frequent implementation of the "clearing" epidemic prevention policy, which dragged down economic growth. The reduction of the expected economic growth rate of Brazil and Mexico is mainly due to the fact that the two governments have begun to implement strong monetary policies in response to inflation, which will curb China's demand. In terms of inflation, the IMF believes that global inflation may remain high in the near future. The average inflation rate in developed economies is expected to be 3.9% in 2022 and 5.9% in emerging markets and developing economies. With the easing of supply chain problems, the tightening of monetary policy and the shift of demand from commodity intensive consumption to service consumption, the level of global inflation may gradually decline.
The risks facing the global economy mainly include the following points. First, the development of the epidemic may exacerbate the labor shortage, bring additional pressure to the medical system and frustrate the driving force of economic growth. Second, the tightening of monetary policy in the United States may affect the global financing environment, especially putting excessive pressure on the currencies, enterprises and finances of emerging markets. Third, there is still uncertainty about whether the supply chain disturbance can be effectively alleviated. Land side transportation bottlenecks and, epidemic spread and the duration of supply-demand imbalance are the key influencing factors. Fourth, the rise in labor costs caused by labor shortages (especially in the United States) may further push up prices, resulting in a sustained inflation cycle. Fifth, if the growth rate of China's real estate industry slows further, it will have a spillover effect on commodity exporting countries and emerging markets, and then affect the global economic outlook. Sixth, the probability of major natural disasters has increased, or will continue to bring serious risks to the global economy. Seventh, geopolitical risks.
The hawkish degree of the Federal Reserve's FOMC meeting in January exceeded expectations, and the number of new non farm jobs rose again
On January 26 local time, the Federal Open Market Committee (FOMC) decided to end the asset purchase in March and start the table shrinkage in the future. The federal benchmark interest rate remained unchanged at 0% - 0.25%, but it was clear that it was appropriate to raise interest rates soon in the future. Since then, Fed chairman Powell said at the press conference that the possibility of raising interest rates at each FOMC meeting is not ruled out, and the overall range of interest rate increase has not been determined. The current economic situation means that we can act earlier or even faster than last time, and there is a lot of room to raise interest rates. On the whole, the Fed released the voice of "hawks" again overnight, probably starting to raise interest rates in March and then starting to shrink the table, which is basically in line with the recent market expectations. However, Powell's statement that "interest rates will be discussed at every meeting" was slightly more hawkish than expected, which led to the rapid rise of US bond yields and the intraday plunge of the three major US stock indexes, Since then, emerging market countries have also explored comprehensively.
Since then, the data released by the U.S. Department of labor on February 4 showed that after the quarter adjustment in January, the U.S. non-agricultural employment population increased by 467000, far exceeding the expected increase of 150000. We believe that the performance of non farm data is better than expected, which makes the conditions for accelerating tightening more mature. At present, the gap of American labor force is still, which further makes it difficult to keep the inflationary pressure high. Therefore, the Fed has a tough attitude towards raising interest rates this time, and the normalization process of American monetary policy will be accelerated in 2022. However, this kind of toughness may be difficult to run through the whole year. Under the background of the decline of energy price center, the steady growth of crude oil supply and the limited means of fiscal stimulus, the inflationary pressure in the United States is expected to fall in the second half of the year, which will gradually ease the attitude of the Federal Reserve. We predict that the number of interest rate increases by the Federal Reserve will still be about 3-4 in 2022, and the contraction may start in the middle of the year.
China's PMI fell in January, and the performance of supply and demand weakened
China's manufacturing PMI in January decreased by 0.2 percentage points to 50.1% compared with December, and non manufacturing PMI decreased by 1.6 percentage points to 51.1%. Specifically, the production index recorded 50.9%. Although it is still above the dry and prosperous line, it is down 0.5 percentage points from the previous value. Except that the sub items such as food consumption show a high boom driven by the Spring Festival, the overall production expansion speed has slowed down significantly. The new order index recorded 49.3%, down 0.4 percentage points from the previous month, reflecting that the demand side was still weak. In addition, stimulated by the loose policy, the production price picked up, and the purchase price index and ex factory price index of main raw materials rose 8.3 and 5.4 percentage points to 56.4% and 50.9% respectively, returning to the expansion range. Under the background of multi-point fermentation of China's epidemic, the recovery pace of the service industry has also slowed down. We believe that the downward trend of China's overall economy is still continuing, but with the gradual improvement of the epidemic and the gradual implementation of regulatory policies, the confidence of enterprises and consumers is expected to be gradually restored, and the demand side may be marginally improved.
Weekly view: the two cities are expected to fight back after the festival, and the undervalued sector may have more advantages
At the macro-economic level, we believe that the poor policy of internal loosening and external tightening and the uncertainty risk of the global financial environment will be the core issues to be paid attention to in the first half of 2022. After the FOMC meeting in January, the Federal Reserve is about to start the cycle of raising interest rates. It has been basically determined that the Fed will be more active in communicating with the market in order to avoid causing severe market fluctuations and systemic risks. In the first quarter, China's tendency to increase the size of easing is also obvious, but the formulation of "strictly prevent flooding" has appeared frequently recently, and expectations are also being moderately revised. The combination adjustment of a variety of monetary instruments and structural policy adjustment may be the main ways. In addition, geopolitical risks and extreme climate shocks may be staged in 2022. Under the background of the conflict between Russia and Ukraine and the game between major powers in the post epidemic era, local conflicts may occur repeatedly.
In the market, the continuous fermentation of the epidemic outside China this week, the intensification and deterioration of relations between Russia and Ukraine, the release of more than expected hawkish signals from the Federal Reserve and other events have continuously impacted market sentiment, driving the two cities to fall sharply on Tuesday, Thursday and Friday, and the Shanghai index fell below the 3380 support point. Driven by the recovery of overseas liquidity and the strengthening of the US dollar, the northward capital outflow further exacerbated the decline of a shares. In terms of sectors, the wind power concept sector closed up against the market this week and performed significantly better; TMT sector experienced a deep correction, and concept sectors such as games, operating systems and cloud computing led the decline, or it was mainly caused by the "resonance" impact of the outer disk.
At present, there is a strong sense of panic in the A-share market. After a continuous correction in 2022, there has been a sharp decline again this week, and more than 4000 stocks have closed down for many days. However, we are still optimistic about the follow-up performance of the A-share market. On the one hand, because the current negative factors have been largely exhausted, the accelerated tightening of the Federal Reserve has been implemented, The probability of full-scale outbreak of geopolitical risk is also low. Although there is still some uncertainty under the background of continuous epidemic, the space for further deterioration of market sentiment is limited. On the other hand, the main reason for this round of deep correction mainly comes from overseas markets. There is no sign of further deterioration in China's economic fundamentals, and the overall liquidity environment is also better. With the gradual repair of market sentiment, the A-share market is expected to usher in a counterattack. At the same time, as we said earlier, the risk of uncertainty still exists, and the downward pressure on the economy is also large. Under this background, it is suggested to moderately reduce the position of track growth stocks in the short term, and focus on the mandatory consumption sector with defensive attributes and the undervalued sector with high prosperity, waiting for the opportunity to fight back.
In terms of industry, (1) pay attention to the national defense and military industry sector. The continuous sharp correction may have built a certain margin of safety for the national defense and military industry sector. Under the background of good basic orientation and improved macro liquidity, it currently has better configuration value. It is suggested to focus on core components, new information equipment, new materials and other related targets. (2) Focus on social services. At present, the epidemic situation in Europe and the United States is still at its peak, but the epidemic situation in China is being controlled and improved. The social service sector has been continuously impacted by the sporadic and periodic resurgence of the epidemic, and its performance is relatively low. However, with the gradual retreat of the disturbance of the epidemic situation, the fine sectors such as air tickets, hotels and catering are expected to fight back. Especially driven by the Winter Olympic Games, the attention of the ice and snow sports industry has increased significantly, It is expected to enter a period of vigorous development, and it is suggested to focus on it. (3) Focus on the required consumption sub segment of undervalued value. After the Spring Festival, driven by the good policy orientation, the consumption sector is expected to return to high prosperity. Under the background that the economy as a whole still shows great downward pressure, the defensive and counterattack force of the required consumption sub sector that underestimates the value are relatively strong, so it is still recommended to focus on it. (4) Focus on the concept of digital economy. The opening ceremony of the Beijing Winter Olympics fully demonstrates China's current leading digital technology capability. With the boost of industrial strategic development, breakthroughs in hardware facilities and basic software technologies related to the digital economy are expected to accelerate into the industrialization stage, resulting in rapid growth in profitability, It is suggested to focus on high-quality targets with leading technical advantages in the subdivided field, and carefully deal with the hype of some advanced concepts in the short term.
Medium and long term strategy
In the medium and long term, we suggest investors continue to focus on three directions. Consumption sector: medicine and consumption upgrading. Long term high-quality track: carbon neutralization, scientific and technological innovation and new infrastructure. Stable bottom position variety: big finance.
Risk tips
Global liquidity tightened more than expected; The global epidemic has developed beyond expectations; The macroeconomic growth rate fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
