The stock index fell 1.13% this week. How will A-Shares operate next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
CITIC strategy: the peak of geographical impact has passed the “three bottoms” to confirm the balanced allocation
The high point of geo risk impact may have passed, and the risk disturbance is mainly reflected in the emotional level. March will enter the preliminary effect observation period of stable growth policy. It is expected that the follow-up policies will continue to increase and enter the centralized development period. The “three bottoms” of A-Shares have been confirmed in turn. It is suggested to maintain a high position, stick to the main line of stable growth, and adhere to the balanced allocation of industry and style, Layout around “two low positions”. First of all, the peak impact of geopolitical risks on the global market may have passed, the possibility of further proliferation of the conflict between Russia and Ukraine is relatively low, and the disturbance impact is expected to weaken. Secondly, the resumption of six geopolitical conflicts in history shows that the geopolitical conflict does not change the medium-term trend of China US stock market, and the conflict between Russia and Ukraine is not expected to change the medium-term trend of A-share improvement and medium-term adjustment of US stock market. Meanwhile, the Federal Reserve is expected to raise interest rates by 25bps in March, which is lower than the previous expectation. Thirdly, in March, the national “two sessions” are expected to further strengthen the expectation of stable growth policy and clarify the annual GDP growth target of 5.5%. The policy will continue to increase and enter the centralized development period. Finally, the “three bottoms” of A-Shares have been confirmed in turn. The high point of external impact disturbance may have passed, and the internal fundamentals are expected to enter the repair channel with the support of policies.
CICC strategy: the “emotional bottom” of A-Shares gradually confirms that the style is more balanced
Historical Shanghai outlying risks will affect China’s stock market in the short term and remain limited in the medium term. We believe that the impact of this round of medium-term uncertainty is that if the situation continues to escalate, it may exacerbate the premium of resource supply and have an adverse impact on overseas inflation and monetary policy. Looking ahead to the future, we recently stressed that the first half of this year experienced a “policy bottom, sentiment bottom and growth bottom” in turn. At present, the policy bottom has been relatively clear. The higher than expected credit social finance data in January further confirmed the “policy bottom”. If the geography and epidemic situation no longer exceed the expectations, the “sentiment bottom” is expected to be gradually confirmed, and the subsequent steady growth policy will be gradually implemented, The “bottom of growth” may also gradually appear from the first quarter to the second quarter, and there is no need to be overly pessimistic about the big market in the follow-up. From the perspective of structure, we believe that the risks of growth stocks have been released in the early sharp correction, and are gradually entering the stage of “bargain hunting”; The “steady growth” sector fluctuates more, but there may still be room for performance in the future. On the whole, compared with the “stable growth” in the early stage, the market style is likely to gradually transition to a relatively balanced stage.
Guosheng strategy: two scenarios of waiting to determine the medium-term trend in the future
Resume the capital market performance during the four typical geographical conflicts since the 21st century, and the local war is not a variable to determine the market trend. Moreover, in the conflict between Russia and Ukraine, foreign capital only flowed out slightly, and the RMB reached a new high since mid-2018. Therefore, even if the situation between Russia and Ukraine continues to escalate, it will not have a greater negative impact on a shares. From a short-term perspective, between now and the two sessions, it is in a window period with good odds and odds. The market in the lunar year is expected to continue. The trading bottom of the high boom track may have appeared, and the style probability is balanced; However, in the medium-term dimension, the trend of accelerating the entry of incremental funds into the market and the downward trend of global interest rates has shifted, and the simple boom chasing strategy may fail. As far as the current situation is concerned, we are still in the macro combination of weak economy and low credit. The further trend in the future needs to wait for subsequent decisions. However, in any case, it is necessary to increase the allocation of relatively low positions and undervalued sectors.
Xingzheng strategy: how persistent is the rebound? How to deflect the market style?
The probability of “V-shaped” reversal in the short term is small, and March is still an important observation window. 1. The Fed raised interest rates and the trend of US bond interest rates. Since the beginning of the year, the sharp rise of US bond interest rate under the warming expectation of interest rate increase by the Federal Reserve has been an important factor dragging down China’s risk appetite, especially on the “new half army” and other sectors. The Federal Reserve’s interest rate meeting will be held on March 16. Recently, although the market’s expectation of raising interest rates by 50bp in March has dropped significantly, raising interest rates six times during the year is gradually becoming a market consensus. According to the current federal funds rate futures, the market expects the fed to speed up slightly in March, may, June, July, September and November. On the whole, under short-term inflation and geopolitical pressure, the Fed’s interest rate hike in March is a high probability event. More importantly, it is important to observe the Fed’s position on the follow-up economic and policy trends. 2. On the Chinese side, the two sessions will also be held on March 4. Focus on the layout of the decision-making level for short-term “stable growth” and long-term high-quality development, including setting the tone of important indicators such as GDP growth target and fiscal deficit ratio. 3. In the middle and late March, on the one hand, the prosperity indicators of popular tracks, such as the sales volume of new energy vehicles and the prospect of the first quarterly report, will be released one after another. At present, the market has different expectations for the prosperity of the popular track represented by the “new semi army”, and the relevant data will become an important signal for the confirmation of the prosperity. On the other hand, China’s economic and financial data from January to February will also be released, which will become an important basis for the market to judge the effect of “steady growth” in the early stage and predict the rhythm and strength of follow-up policies. 4. The progress of the conflict between Russia and Ukraine and the price trend of bulk commodities such as oil prices. Previously, the outbreak of war between Russia and Ukraine once led to a sharp decline in the global market and the price of crude oil exceeded US $100 / barrel. The follow-up will still be an important variable affecting the market, especially commodity prices and the global supply and demand pattern.
Monarch strategy: profit improvement to resist risk disturbance
General trend research and judgment: periodic disturbance of risk preference. Affected by peripheral events such as the conflict between Russia and Ukraine, the market fluctuated and fell this week, and the Shanghai index closed down 1.13%, showing a structural rebalancing at the style level. In the short term, under the background that the downward pressure on earnings has not been alleviated and the inflection point of global liquidity has arrived, risk appetite has become the main disturbance factor of the market. As for the conflict between Russia and Ukraine, first, it affects the risk appetite, and the current risk aversion is dominant; Second, by affecting the supply of energy and other commodities, it will raise global inflation expectations. From a medium-term perspective, China’s economic recovery is still the core. Considering the marginal relaxation in the real estate sector (the proportion of down payment, the relaxation of purchase and loan restrictions), the expectation of wide credit will rise again, and the driving of credit cycle → profit cycle will boost the steady growth market.
Livelihood Strategy: the real cycle has not yet begun
Investors like to attribute the epidemic and geographical conflict to a one-time supply shock, and always believe that the “most stressful moment” is over. In a short time, this cognition seems to have lasted more than a year. Historically, in the era of “big inflation” in the United States in the 1970s, people also like to attribute the rise in prices to the oil crisis, and believe that the price level will fall sharply after the conflict is over. The fact is that inflation showed signs from 1967 to 1982, during which the impact of energy supply is often alleviated, but inflation is difficult to fall back, Behind it are concerns about the value of credit money. At present, the price of gold measured in multi-national currencies has reached a high since June 2021 when the margin of monetary policy of various countries is not loose, and the price of gold denominated in yen has reached a record high. At the same time, the current real price of mainstream commodities denominated in gold is at a historical low, which implies that although the relationship between supply and demand is important, it is not the core contradiction in the next stage. The credit currency system of major countries in the world is being impacted. As the opposite of credit currency, physical assets are ushering in an important allocation moment.
West China strategy: repeatedly grind the bottom to be more solid, and the layout of three main lines
Affected by geopolitical emergencies, investors’ risk appetite decreased, resulting in increased volatility of global assets.
Given that China has a complete industrial chain and little inflation pressure in China, RMB assets have been given the attribute of risk aversion. It is expected that the disturbance of overseas risk events to the A-share market is relatively short. The following two sessions will be held, and it is expected that the steady growth policy will still be intensively implemented, and A-Shares are still in the policy dividend period; In addition, A-share enterprises have successively entered the disclosure period of the first quarterly report of the annual report, and the sectors with high profit growth and business reversal will become the main line. In terms of allocation, there are three main investment lines: first, the allocation varieties of “stable growth” policy, such as “bank, real estate, building materials and construction”; Second, “food and beverage, breeding, Shenzhen Agricultural Products Group Co.Ltd(000061) “, etc. expected to benefit from price increase (price increase); Third, the theme of benefiting from the promotion of policies (support), “new energy (vehicles), digital economy, East West calculation, agriculture, rural areas and farmers”, etc.
Western strategy: style correction market is starting
For the core driving force of this round of market, we believe that it mainly comes from the window period of the annual report. The market returns to grasp the fundamentals and superimposes the phased repair of macro liquidity expectations and emotions. In such an environment, the boom track leader with large adjustment range in the early stage and high performance fulfillment will usher in a round of restorative market, which we call style correction market. Structurally, we still emphasize that prosperity is the best defense. At present, the prosperity track leaders such as new energy, semiconductor, medicine and military industry that focus on performance and can be determined to be fulfilled are expected to usher in phased repair. On the other hand, actively allocate the necessary consumption sectors highly related to profitability and inflation, including agriculture, textile and clothing, light industry, social services, retail, catering, shipping and other industries that benefit from the liberalization of policies after the epidemic, which will become the main line throughout the year. In addition, in this year’s fast rotating market environment, investors with high risk preference can follow the credit cycle and actively participate in the rotating trading opportunities of industries with high probability of profit inflection points in the upward stage of the credit cycle, such as construction, building materials, auto parts, home appliances and media.
Guohai strategy: the market will rebound in March after the return of growth
In March, the market has structural opportunities, and growth is expected to rebound. The core lies in the further relaxation of China’s monetary policy and the easing of overseas tightening expectations. Under the background of the approaching performance window, the prosperity of the growth sector with sufficient early adjustment is dominant, and the sex price ratio begins to appear. In the short term, China US policy will still be misplaced. In essence, it is a deviation from the economic cycle after the epidemic. The strength of the RMB exchange rate can dispel the doubt that monetary policy is “dominated by me” to a certain extent. The probability of the Federal Reserve raising interest rates by 50bp in March is decreasing. It is a normal policy choice in a round of easing cycle to reduce the reserve requirement first, then reduce the interest rate, and finally end with the reduction of the reserve requirement. In the period of deviation of China US policy, A shares performed fairly well. In January this year, the year-on-year growth rate of stock social finance increased significantly, marking the official opening of the wide credit cycle. In the past 10 years, the amplitude and duration of the four rounds of wide credit cycle are different. The decisive factor lies in the ability of infrastructure, real estate and manufacturing industries to carry credit, especially real estate. It is expected that the current path of wide credit is infrastructure and manufacturing industries first, and real estate will not be absent, but the strength is not as strong as before. Risk appetite is also a pattern in which the inside is better than the outside. In China, the two sessions of the National People’s Congress are about to be held, and the implementation of policies is expected to speed up; Overseas, the escalation of the conflict between Russia and Ukraine suppresses risk appetite in the short term, and the impact on China lies more in the medium and long-term strategic level than the economic level. From the perspective of equity risk premium and valuation quantile, the market gradually shows its cost performance after adjustment, and the valuation repair market will be carried out slowly.
China Securities Co.Ltd(601066) strategy: Russia Ukraine crisis pushes up global inflation China waits for the policies of the two sessions
Generally speaking, there are many variables in the follow-up of the Russia Ukraine conflict and NATO sanctions, but the market is still in a favorable window period. With the approaching of the two sessions, the stable growth of the infrastructure chain has begun to be realized gradually. Subsequently, with the cooling of the expectation of the Federal Reserve’s interest rate hike in March and the return of China’s long-end treasury bond yield, the environment of the growth sector has improved, and we are optimistic about the power semiconductors and photovoltaic with high prosperity, CXO with expected marginal improvement, while paying attention to the aluminum and crude oil chain benefiting from the conflict between Russia and Ukraine, thermal power benefiting from the downward coal price, digital economy supported by policies, etc. In the medium term, A-Shares will still face four major challenges: the downward pressure on performance brought by the economic bottoming period, the rhythm and intensity of policies, the interest rate increase cycle of the Federal Reserve, and the China policy of the US mid-term election year. Take the lead in configuration: grasp the “three low and one change” (low undervalued value and low congestion, with fundamental marginal improvement expectation), make high dividends as the bottom position, counter cyclical upward industry as the main force, and make the theme of marginal improvement of low distribution industry.
