At the end of this anniversary, the market trend was further strengthened, the all a index hit a new high in 15 years, and the value stocks showed a comprehensive recovery momentum. This week ushered in the successive landing of two major conferences. How to understand the impact of the central economic work conference on the stock market? After “conference week”, what should we focus on next?
What is the logic behind the rise of stocks and bonds? This week, China’s capital market ushered in the synchronous rise of stocks, bonds and foreign exchange. From the driving factors behind it, on the one hand, the demand for steady growth was strengthened and the expectation of broad credit was raised. At the same time, monetary easing was the first step; On the other hand, the rising uncertainty of the external epidemic, coupled with the slowing down of China US relations, promoted the appreciation of the RMB, and the admission of foreign capital was also significantly accelerated.
Six impacts of the central economic work conference on the stock market:
1. With economic stability at the forefront, the process of “deleveraging” of entities has come to an end. Since the beginning of this year, the macro core lies in: external exceeding expectations and internal deleveraging. With the credit pulse bottoming out in October, the process of deleveraging in the physical sector has basically come to an end, and the probability of starting a moderate “deleveraging” next year.
2. From stable to wide credit, the certainty of wide credit is improving compared with 730 Politburo meetings. After the third quarter, the credit environment gradually changed from tight to stable, which was more affected by special bonds and financial rhythm; Looking back, the certainty of broad credit will be further improved, and the credit conditions are expected to stabilize in a real sense by the end of the year, driven by the financial front, real estate correction and credit direct tools.
3. Whether the growth target reaches 5.5 or not, it needs the power of traditional economies such as infrastructure and real estate. Considering that the two-year compound growth rate in the third quarter of the 21st century was only 4.9%, and there was further downward pressure in the fourth quarter, it was necessary to promote the development of traditional economy such as infrastructure and real estate. And the high-frequency data points to the demand data related to infrastructure and real estate. Recently, there have been stabilizing signals. Looking back, we should not be overly pessimistic about the traditional economy.
4. Carbon neutralization is established first and then broken. Double carbon bid farewell to “one size fits all”, and the tone of ensuring supply and stabilizing price continues. Energy consumption policy is more flexible, and double carbon bid farewell to “one size fits all”. High energy consuming enterprises dominated by green energy will no longer be excessively subject to the “energy consumption” index per unit output, and the green power sector will usher in positive clarity.
5. On the industrial policy side, it pays attention to regional balance, monopoly industry reform and agricultural security. Next year, market competitive businesses in monopoly fields such as power grid, telecommunications, railways, oil and natural gas are expected to be liberalized at an accelerated pace; At the same time, pay attention to the allocation opportunities of seed industry, agricultural machinery and other related industries.
6. The reform of the registration system has been carried out in an all-round way, and the importance of equity market financing has further increased. The logic of A-share long-term funds entering the market has been changed. After the implementation of the real estate tax, residents’ funds entering the market with the help of institutions will still be the main increment of the stock market. Public offering + private placement is expected to contribute more than 1.5 trillion incremental funds next year.
Pay attention to the m1-ppi scissors difference inflection point as a long signal. Since this year, the Shanghai 50 / Shanghai and Shenzhen 300, which are mainly blue chip in value, have made obvious adjustments following the credit contraction. The rise and fall are of the same origin. If the m1-ppi scissors difference continues to repair after confirming the inflection point, the upward space of the weight index is also expected to open. We believe that with the broadening of credit conditions in the medium term and the recent resonance of domestic and foreign funds, value stocks are expected to lead the beta market over the next year. On the whole, the short-term winning rate of big finance is higher and the medium-term sustainability of consumption is stronger.
Core conclusions and strategic suggestions: first stand and then break, internal and external resonance, steady growth, leading beta market over the next year. (i) The steady growth direction has been established and initial results have been achieved. The credit conditions are expected to stabilize in a real sense at the end of the year, and continue to be optimistic about value restoration in the medium term, including food and beverage, consumer services, high-quality banks, state-owned enterprise developers and power; （2） New and old infrastructure development direction, the first push: construction / building materials, scenery storage, UHV; (III) upstream cost reversal auto parts, small household appliances, and independent main line military industry.
Risk tips: 1. The epidemic situation is out of control; 2. A sharp recession; 3. The policy has changed more than expected.
