China’s financial and credit data in January exceeded expectations and recorded a “good start”
The CPI data of the United States in January was higher than the market expectation, and the tightening expectation of the Federal Reserve policy was further heated up
The geopolitical situation in Russia and Ukraine once again triggered market fluctuations
New highlights: 1) geopolitical situation in Russia and Ukraine: on February 11, Sullivan, national security adviser to the White House, said that the risk of Russia’s invasion of Ukraine was “high enough” and the threat was “urgent enough”, urging all American citizens to leave Ukraine immediately. He said there was a high possibility that “Russia would even take military action before the end of the Winter Olympics”. On the same day, the United States ordered an additional 3000 soldiers to Poland. In addition, Russia began large-scale military exercises in Belarus from February 10 until February 20. On February 12, US President Biden talked with Russian President Vladimir Putin for about one hour, but failed to make a breakthrough. Biden warned that western countries would respond to any invasion with “severe” economic sanctions. However, the White House said Biden’s efforts had not changed the position of the Russian government, and there was still a “clear possibility” of an imminent attack. 2) China US Relations: on February 7, the US Department of Commerce announced that 33 Chinese entities would be included in the new “unverified list”, requiring US companies exporting to the entities on the list to obtain licenses. On February 9, U.S. Secretary of Commerce Raymond said that the United States would ask China to take responsibility for failing to fulfill the procurement objectives promised in the first phase trade agreement.
Macroeconomic data: China: the increment of social financing scale in January was 6.17 trillion yuan, higher than expected (December: 2.37 trillion yuan; January last year: 5.19 trillion yuan); The year-on-year increase was mainly from RMB loans, government bonds and corporate bonds; Among them, 484.4 billion yuan (zero in the same period last year) of special bonds issued by local governments were newly added, accounting for one third of the limit (1.46 trillion yuan) issued by the Ministry of Finance in advance. New RMB loans reached 3.98 trillion yuan, higher than expected (December: 1.13 trillion yuan; January last year: 3.58 trillion yuan). M2 money supply increased by 9.8% year-on-year, higher than expected (December: 9%). Us: 1) CPI rose 0.6% month on month (MOM) / 7.5% year on year (YoY) in January, higher than the market expectation of 0.4% mom / 7.2% YoY (December: 0.6% mom / 7.0% YoY); Core CPI (excluding food and energy) increased by 0.6% month on month / 6.0% year on year, which was also higher than the market expectation of 0.5% month on month / 5.9% year on year (December: 0.6% month on month / 5.5% year on year). 2) The trade deficit in goods and services recorded $80.7 billion in December, larger than expected (November deficit: $79.3 billion). 3) In February, the initial value of the University of Michigan consumer confidence index recorded 61.7, significantly lower than expected, and the lowest level since December 2011 (January: 67.2).
Stock Market Overview: the Hang Seng, MSCI China and CSI 300 index rose 1.4%, 1.5% and 0.8% respectively in the past week. MSCI China Index: the energy (+ 7.6%) and raw materials (+ 7.2%) sectors outperformed the market, while the healthcare (- 9.1%) and information technology (- 1.5%) sectors performed poorly. The valuation of Hang Seng / MSCI China / CSI 300 index is 11.5x / 12.7x / 14.0x forward-looking P / E ratio respectively (the median level in the past three years is 11.2x / 13.2x / 13.9x). The geopolitical situation in Russia and Ukraine will continue to put pressure on the market and become the leading factor in the volatility and correction of US stocks and other major markets. We maintain our view of the Hang Seng Index. The higher than expected growth of social finance will contribute to the inflow of funds to the south. main
Risks: 1) the economic recovery is weak and the policy strength is less than expected; 2) Sino US relations; 3) US stocks callback.
