Market review: the index continued to rise, and the northward capital accelerated its admission
In the market, the Wande all a index rose again after a short correction in the past five trading days, with a cumulative closing of 1.16%. The turnover was significantly large, the trading activity increased, and the total net inflow of northbound funds this week was 15.117 billion yuan. In the past five trading days, leisure services, food and beverage, household appliances, media, building materials and other sectors led the increase; Defense and military industry, mining, power equipment, automobile, architectural decoration and other sectors led the decline.
The central economic work conference emphasized "stabilizing the macro-economic market", and the policy was loose and the tone was clear
The central economic work conference was held in Beijing from December 8 to 10. The conference once again stressed that next year's economic work should be stable and seek progress while maintaining stability. Therefore, "stable growth" will be the core idea of China's macro-control in 2022, and the policy easing tone is clear. At the same time, in combination with the recent policy trend and the statements made at the Politburo meeting this week, we believe that the following signals have been released:
First, "stabilizing the macro-economic market" emphasizes both growth and risk prevention. At present, a number of forward-looking data in China have reflected great downward pressure on the economy. With the gradual tightening of overseas liquidity and weakening of external demand, the boosting effect of China's exports on the economy will also decline. The "organic combination of cross cyclical and counter cyclical macro-control policies" or the strength of supporting economic growth in terms of macro policies will be strengthened. While stabilizing the growth rate of the total economy, "strict financial discipline" and "setting up a" traffic light "for capital suggest that the supervision and prevention and control of local implicit debt risk and capital financial risk may be further strengthened, and the barbaric growth and disorderly expansion of infrastructure, real estate and capital market may be unsustainable. Second, the easing policy may be gradually implemented. The "combined fist" of more active fiscal policy and structural monetary instruments may be the main means, and the former loose and later stable may be the main rhythm. The idea of promoting effective investment landing and fiscal advance is relatively clear. Fiscal expenditure may accelerate significantly in the first half of next year, so as to stimulate infrastructure investment and boost the economy. At the same time, "relieving small and medium-sized enterprises", "strengthening core technological innovation in manufacturing industry" and "developing green economy" will be important starting points of structural monetary policy, so as to promote the accelerated development of relevant industries. Third, "carbon neutralization" and "correction" of the real estate market. In terms of carbon neutralization, "it is impossible to complete the work in one battle" emphasizes that the "one size fits all" of some local governments in the energy transformation strategy is not desirable. The excessive adjustment in the short term has led to the soaring price of energy and raw materials in China since October, which is obviously contrary to "ensuring people's livelihood" and "ensuring employment". The stability of energy supply and industrial product prices in 2022 will receive key attention, "Ensuring supply and stabilizing price" will continue, and green and low-carbon technology will be the key direction. At the same time, the adjustment of the real estate market will also pay more attention to structure and hedge the previous industry "cold winter" expectations. Fourth, the trend of economic restructuring remains unchanged and will continue to deepen along the previous direction to consolidate the results of this year's economic restructuring. Under the guidance of "common prosperity", the system reform of key industries such as education, medical treatment and housing related to people's livelihood will continue to deepen, the rectification of monopoly phenomena in relevant industries will not be relaxed, and the development pattern of high quality and high efficiency is still the end result. New energy, digital economy and localization of core parts are still key development areas.
The central bank announced the opening of a comprehensive RRR reduction, with stabilizing expectations and helping entities as the main starting point
On December 6, the central bank announced after hours that it would reduce the deposit reserve ratio of financial institutions by 0.5 percentage points on the 15th of this month (excluding financial institutions that have implemented the 5% deposit reserve ratio), releasing a total of about 1.2 trillion yuan of long-term funds. We believe that the overall RRR reduction may be based on two considerations: first, replace some expired mlfs to ensure year-end liquidity. At present, China's policy to ensure the economy and steady growth has a clear tone. This comprehensive RRR reduction can effectively support the year-end liquidity, ensure reasonable abundance, replace the mature MLF of financial institutions, reduce the financing cost of the real economy, promote the landing of effective investment and alleviate the downward pressure on the economy. Second, stabilize the market expectations after the recent risk exposure of some real estate enterprises, protect market sentiment and hedge market risks. Under the guidance of the steady and orderly development of the real estate market, the valuation of leading central enterprises and high-quality private enterprises with healthy balance sheets can be repaired. It is recommended to pay attention.
At the same time, the next day, the central bank announced that it would cut the refinancing interest rate for agriculture and small loans by 0.25 percentage points from December 7. After this reduction, the three-month, six-month and one-year refinancing rates for agriculture and small loans were 1.7%, 1.9% and 2% respectively. After the comprehensive RRR reduction, the targeted interest rate reduction is followed. The loose policy trend has emerged, and small and medium-sized enterprises may be the key support object in stabilizing the economy.
In November, the scissors gap between PPI and CPI narrowed, and the profit repair expectation of the middle and lower reaches may be realized gradually
According to the data released by the National Bureau of statistics on December 9, China's PPI rose 12.9% year-on-year in November, down 0.6 percentage points from the previous value. Among them, the month on month growth rate of means of production turned negative, down 0.1%. In November, CPI rose 2.3% year-on-year, 0.8 percentage points higher than the previous value.
The scissors gap between PPI and CPI narrowed as scheduled, and the effect of "ensuring supply and stabilizing price" was prominent. In terms of PPI, the industrial prices of coal mining, processing and metal industries fell month on month, and the correction of "double carbon" strategic policies has been made. In the economic work conference, it was mentioned that "saving first, two wheel drive" and "promoting the optimal combination of coal and new energy" reflect that although the determination of energy transformation is strong, it can not be ignored to ensure the reasonable energy supply in economic operation. In other words, In 2022, the regulation and control of energy may emphasize one guarantee of supply, two stabilization of prices and three prevention of disorderly expansion. Therefore, the prices of energy and raw materials have reached the top and the bottom will be at the bottom. The profit transfer from the upstream industry to the middle and lower reaches is gradually being realized, and the middle and lower reaches are basically oriented well. In terms of CPI, the sub item of food and energy is the main reason for driving the year-on-year growth of CPI. The fading impact of extreme climate makes the rise of fresh vegetables fall in November, pork prices rise seasonally, and the prices of durable goods and services fall, mainly due to weak demand. Under the guidance of "expanding domestic demand", China's consumption may usher in an inflection point, accelerate the repair, and drive the price of end consumer goods to rise. At the same time, the upstream production capacity in this round of pig cycle has peaked, and it may continue to be de peaked in the first half of 2022. After the seasonal rise of pig prices at the end of the year, it is likely to usher in a second bottom, prompting a moderate rise in CPI. Therefore, the first half of the year will be a better window for policy easing.
Weekly view: focus on the consumer sector and high boom growth track
At the macroeconomic level, this week's policy signals are intensively released, the loose tone is clear, the efforts to ensure stable macroeconomic growth are gradually strengthened, and more active fiscal policy and structural monetary policy may accelerate the implementation. In the first quarter, another RRR reduction is still expected, and the expectation of interest rate reduction is also higher. The fiscal front is clear. The acceleration of fiscal expenditure in the first quarter is expected to drive the rise of infrastructure investment. The monetary policy is "flexible and appropriate" or emphasizes that in the context of the current great downward pressure on the economy and the rising uncertainty of the international environment, it is necessary to carry out counter cyclical adjustment in time according to the changes of economic fundamentals to ensure the smooth transition of cross cyclical economic convergence.
In the market, the index rose in an all-round way this week, and the two cities continued to rise driven by large consumption and large finance. The substantial net inflow of funds from the North has reached a new high since the opening of Shanghai and Shenzhen Stock connect. The market turnover is obviously large, the trading activity is improved, and the low-level blue chip is favored by funds, which are in line with the general trend in last week's weekly report. In terms of industry, the food and beverage, non bank finance, medicine and biology sectors performed strongly this week, and the concepts of white appliances, light industry and securities companies continued to be built. The good and bad performance of the industry was in line with our configuration suggestions in the previous period.
At present, the liquidity of the A-share market is relatively loose. The policies related to the targeted interest rate cut this week also verify what we mentioned in the previous period. After the targeted RRR reduction, there is a high probability that it will connect with the structural monetary policy to ensure the "stable growth" of the economy. This year's central economic work conference was held earlier, and the conference released a clear easing signal. The CPI data structure reflected the suspension of upward pressure on prices, providing space for follow-up policies and cross cycle steady growth adjustment. We believe that a new round of easing cycle is about to start, the cross-year market will be advanced, and the liquidity and market sentiment are good. It is recommended to continue to pay attention to the opportunities of high boom growth track with policy support. At the same time, the market style may gradually switch to the undervalued blue chip target. It is recommended to pay attention to the profit expectation and valuation changes of segment track and actively adjust positions.
In terms of industry, (1) With the gradual realization of loose expectations, there are still better opportunities for food and beverage. The high-level meeting again mentioned "expanding domestic demand" It is expected to accelerate the repair of China's consumption, guide the strength of the demand side, superimpose the peak consumption season at the end of the year, and the profit space of the food and beverage segment with a reasonable valuation range is expected to be repaired. China's China has China Baixing market. In addition, China's economy has shown a better resilience in the face of several rounds of epidemic. The foreign capital's preference for China's market has improved significantly. Baijiu and other sectors are more favored by foreign investors. The main funds are adjusted at the end of the year. The focus of the Baijiu liquor sector is on the consumer's liquor sector and the mass market. (2) The policy thinking of the real estate sector is clear. Under the "common prosperity" strategy, controlling the fluctuation range of house prices in a reasonable range and promoting the construction of affordable housing is an important foothold. On the one hand, avoid "overcorrection" Exacerbate the pessimistic expectations and systemic risks of the real estate market. On the other hand, solve key livelihood problems and stabilize real estate investment by accelerating the construction of affordable housing in key cities. Therefore, the leading central enterprises of real estate under the bad situation are expected to repair the valuation, and the subdivided fields such as house leasing and property services will also enter the stage of standardized development. It is suggested to pay attention to the high-quality targets with better management and strong competitiveness in the relevant subdivided sectors. (3) Under the idea of "stabilizing the macro-economic market", rescue the development of small and medium-sized enterprises " More and more attention has been paid. The follow-up policy of ensuring that funds reach the real economy gradually will drive the capital cost pressure of financial institutions to continue to decline and restore profits. At the same time, the transition period of the new regulations on asset management is coming to an end, and the liquidity of the equity market is expected to be further improved. It is suggested to pay attention to the relevant targets of the financial sector.
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 statement
Global liquidity tightened more than expected; The global epidemic situation has exceeded expectations; Macroeconomic growth fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
