Core view
Review:
On January 3, “it’s the turn of big finance” emphasized the focus on the “big finance” market, which is the winner and loser of 2022 investment. Later on January 9, “big finance is the current market” β》、 Reports such as “retreat or attack, rely on big finance” on January 16, “big finance, continue to cut” on February 6, and “what else can big finance buy” on February 20 continue to emphasize that big finance seems to be defensive, but in fact, the best attack is to cut to big Finance (bank and real estate chain).
Four phases are superimposed, including the verification period of economic data, the policy expectation period of China’s two sessions, the landing period of the Federal Reserve’s interest rate meeting, and the fermentation period of Russia Ukraine conflict. The stock capital is mainly game, and the market is mainly grinding, tolerance, consumption and tossing. The “Russia Ukraine incident” broke out suddenly. The Federal Reserve is facing two-way pressure from inflation and risk aversion. The expectation of short-term liquidity tightening is slowing down, and growth may usher in a breathing opportunity. You can pay attention to the photovoltaic and wind power of the “double carbon” economy, the data center and cloud computing chain of the digital economy. When the external disturbance gradually recedes, return to the focus of steady growth and grasp the good opportunity of adding large finance (real estate chain and bank).
The four phases are superimposed, and the stock capital is mainly based on the game, with the market grinding, tolerance, consumption and tossing. In the past two months, we have continued to recommend investment opportunities in the direction of “big finance” such as banks and real estate chain from “it’s the turn of big finance” on January 3. The whole market has better grasped this round of market at the beginning of the year, and the excess return is also obvious. On February 20, in what else can big finance buy, we stressed that the “big finance” market entered the fourth stage of the verification period of economic data from the verification of financial data. In addition, the policy expectation period of China’s two sessions, the landing period of the Federal Reserve’s interest rate meeting and the fermentation period of Russia Ukraine conflict are superimposed. The capital consumption and tossing back and forth in the stock market are suitable for “ambush war” and “pursuit war” should be cautious. For trading funds, you can focus on short-term hot spots, ambush, toss back and forth, and stay sober. For investors with large funds, the uncertainty superimposed by the four phases should be seen more and moved less. The strength should be preserved first, and then attack after the uncertainty of the “four phases” gradually subsides.
The “Russia Ukraine incident” broke out suddenly. The Fed is facing two-way pressure from inflation and risk aversion, and short-term growth may usher in a breathing opportunity.
1) “Russia Ukraine incident” occurred, the situation exceeded market expectations, and liquidity tightening expectations slowed down. Affected by geopolitical risks, it shows great volatility and risk avoidance characteristics. The Federal Reserve is facing a dilemma. The expected range and frequency of interest rate hikes have been reduced. The market expects that the probability of the Federal Reserve raising interest rates by 50bp in March is less than 20%, and investors believe that only 25bp interest rate hikes. For the European Central Bank, affected by the situation of “Russia and Ukraine”, it may be affected by the economic downturn, energy supply and other factors, and the time and frequency of interest rate hikes are also relatively weakened compared with the previous period. In the early stage, due to the rapid contraction of the Federal Reserve, the suppression factors on the valuation of growth stocks have eased, and growth is expected to usher in a breathing opportunity.
2) in the medium-term dimension, the impact of oil, natural gas and Shenzhen Agricultural Products Group Co.Ltd(000061) prices on global inflation and the constraints of monetary policy need to be vigilant against the risk of “stagflation” during the 1970s two oil crises. Due to the “Russia Ukraine” incident, there may be a supply shortage of global bulk energy and Shenzhen Agricultural Products Group Co.Ltd(000061) prices, driving up bulk prices. Originally, the market expected inflation to decline around March, but because of this incident, inflation may last longer than expected, inflation data may decline slower than expected, and the economy is in a downward channel, Developed economies may have to raise interest rates, and there may be a “stagflation” environment similar to the “1970s” in the world. The current market asset price response to this expectation is insufficient, and it may be necessary to reflect this change at the price level at a certain point in the future.
The main reason for “stagnation” is the lack of new growth points. In the 1970s, the driving force of the third scientific and technological revolution on the economy weakened. The United States faced economic transformation and the slowdown of traditional economic growth. The effectiveness of the expansionary fiscal and monetary policies implemented by the U.S. government in the 1960s and 1970s was also weakened, lacking new growth points.
“Inflation” two oil crises, inflation remains high. The first oil crisis in 19731974, the outbreak of the war in October 1973, OPEC jointly reduced oil exports, and the oil price rose from $3 to $12. From 1979 to 1980, the second oil crisis, the revolution broke out in Iran, Iran and Iraq went to war, the oil supply contracted sharply, the price soared, and the oil price rose from $14 to $40. In these two stages, the inflation rate remained high and reached more than double digits in 1974, 1979 and 1980, so monetary tightening had to be adopted.
After the short-term disturbance of the “Russia Ukraine” conflict, it returns to China’s core contradiction, and steady growth is still the main line. In recent exchanges with investors, the biggest concern about steady growth and big finance lies in the lack of data verification and lack of confidence in the strength and sustainability of “steady growth”. So is the “big finance” market over? What about the follow-up?
Since “it’s the turn of big finance” on January 3, some profits have been accumulated in more than two months, so some investors have cashed in floating profits. The short-term “Russia Ukraine” disturbance gradually subsided, verified by China’s policy and economic data, and the market focus is expected to return to steady growth. In the steady growth of real estate, infrastructure and consumption, the direction of top-down and bottom-up is feasible and effective. Real estate is the natural choice. Recently, we have seen the full flowering of real estate easing. The mortgage interest rates in Guangzhou, Suzhou and Hangzhou have been reduced by 10-20bp, and the down payment ratio in Chongqing has been reduced to 20%. Positive changes are taking place and strengthening on the supply side and demand side of the real estate chain. The pessimistic expectation of real estate should be repaired and changed. Accordingly, the share prices of home appliances, household appliances and consumer building materials in real estate enterprises and real estate chains that benefit from the recovery of real estate should get corresponding performance.
Investment suggestion: the opportunity for short-term growth, focusing on the opportunities of photovoltaic and wind power in the “double carbon” economy, data center and cloud computing chain in the digital economy. The real estate chain and banks with the main line of “big finance” grasp the opportunity of additional allocation.
First, the direction of growth and breathing is centered on two chains. First, focusing on the “double carbon” economy, combined with the current direction of reasonable chip structure, upward prosperity and guaranteed performance, photovoltaic and wind power. Second, under the background of “counting from the east to the west”, build national data center clusters in Beijing Tianjin Hebei, Dawan District, Yangtze River Delta, Chengdu Chongqing, Guizhou, Gansu, Inner Mongolia and Ningxia. The digital economy will rise as a national strategy in the 14th five year plan, and we can pay attention to the infrastructure direction represented by cloud computing and data center.
Second, the economic downward pressure and steady growth policy hedge, coupled with the marginal improvement of relevant policies for real estate enterprises. 1) The State Council encourages qualified areas to carry out the renewal of rural household appliances and implement subsidies for furniture and home decoration to the countryside. 2) national measures for the supervision of real estate pre-sale funds have been issued, and the flexibility of fund use has been improved. These steady growth policies are improving, as the city’s policy implementation is being strengthened and the demand side relaxation is being implemented. We can pay attention to state-owned and private enterprises of high-quality real estate. Those with strong alpha attribute in the real estate chain and C-end consumption attribute, such as home appliances, household appliances and consumer building materials, are expected to usher in the dual catalysis of valuation repair and performance growth.
Third, the credit data of January has been verified. The macro economy is picking up from the bottom, and the whole is still in the window period of monetary easing and credit easing. The recent risk appetite of the market is low, and the banking sector with low valuation, high dividend attribute and pro cyclical attribute is expected to be favored. At the same time, since 2016, the bank has continuously cleared the asset quality + made a large number of full provisions, with less bad book. In the future, the bank may have an upward roe, and the improvement of asset quality will contribute to the recovery of the valuation of the banking sector. We can focus on large banks that underestimate the value of “stagflation” and urban commercial banks and rural commercial banks in Chengdu Chongqing economic circle and Yangtze River Delta economic circle.
Risk tip: the spread of the epidemic exceeded expectations and the tightening of the Federal Reserve exceeded expectations.
