Ping An View:
Review of 2021: from recovery to "stagflation like", three themes run through the main line
With the help of the vaccine, the global economy in 2021 ushered in a short recovery in the first half of the year. However, with the twists and turns of the epidemic and the evolution of the energy crisis, the short recovery of the global economy soon appeared tail characteristics. At the same time, with the high decline of the economic boom and the rapid rise of inflation, the phantom of "quasi stagflation" has been looming, The probability will also continue to evolve in 2022. "From recovery to quasi stagflation" is the main line of the global economy in 2021, and there are three main themes running through this main line - the twists and turns of the epidemic, the energy crisis and the shift of the Federal Reserve.
Outlook for 2022: deepening of "quasi stagflation" -- China, the United States and Japan may have comparative advantages
In the context of the deepening spread of "quasi stagflation" around the world, developed economies will mainly interpret "inflation is stronger than stagnation", in which Japan has the smallest inflation pressure, the inflation pressure in the United States will be smaller than that in Europe, and the "quasi stagflation" in Europe will be the most significant; Emerging markets will show differentiation. Except that the downward pressure on China's economy will be stronger than the upward pressure on inflation, most other emerging economies will face a severe impact of "quasi stagflation". Where the pressure of "quasi stagflation" is not so great, there will be key opportunities for us to allocate major international assets.
The solution of "quasi stagflation" -- active and promising non market operation, and raising interest rates is a helpless move
Although high inflation is more a supply side block, and the root cause lies more in epidemic control, fiscal expenditure and supply chain disorder, if countries cannot take "positive and promising" operations to suppress high inflation within six months, the interest rate increase cycle is still likely to come. It should be noted that the "stagflation" in the 1970s-1980s was also a supply side factor plus, and it was only Volcker's resolute interest rate increase that succeeded in curbing it. Therefore, although raising interest rates is a helpless move, if there is a situation similar to the weak anti epidemic efforts of various countries and the continuous disorder of the supply chain in the past year, the Federal Reserve may have to raise interest rates under the pressure of all parties, even if it is a helpless move. This will have a significant impact on global asset allocation.
Global asset allocation proposal in 2022: looking for local opportunities under "stagflation like"
The deduction of large categories of assets in 2021 is that in the process of economic repair, the recovery of developed markets is faster than that of emerging markets, and the resulting inflation continues to rise. Looking forward to 2022, against the background of the spread and deepening of the global "stagflation like" pattern, we believe that in 2022, large categories of assets worldwide should pay attention to the local opportunities that are expected to survive under the overall situation of global "stagflation like", mainly in the economies with controllable "stagflation like" pressure, mainly Japan in developed markets and China in emerging markets. These opportunities are scattered in the stock market, bond market and commodities. On the whole, stocks are slightly better than bonds, while commodities should focus on non-ferrous metals, precious metals and Shenzhen Agricultural Products Group Co.Ltd(000061) . In terms of segmentation, long-term medium bonds are preferred in the bond market; The stock market focuses on the Japanese stock market in developed markets, as well as A-Shares and Hong Kong stocks in emerging markets; The commodities are mainly colored and Shenzhen Agricultural Products Group Co.Ltd(000061) .
Risk statement
The global economy quickly got rid of the epidemic; The cycle of global economic recovery has been prolonged, and the risk of "stagflation" has been eliminated rapidly; Global inflation dropped significantly, and central banks delayed raising interest rates.
