It is expected that the inflation scissors will gradually narrow in the future
In October, the scissors difference between PPI and CPI hit another record high. In October, CPI rebounded to 1.5%, PPI rose sharply to 13.5% year-on-year, and the scissors difference between PPI and CPI reached 12pct, a record high since 2000. It is expected that the inflation scissors will gradually narrow in the future. Historically, since 2010, there have been three periods when the inflation scissors have narrowed significantly, during which the consumer sector has performed well.
How did the consumer sector perform during the narrowing of the inflation scissors?
The overall performance of the consumer sector was excellent during the narrowing of the inflation scissors. From May 2010 to August 2012, the consumer sector rose or fell by - 11.9%, ranking the top in CITIC style index; From July 2014 to August 2015, the consumer sector rose or fell by 60.4%, which was relatively backward in the CITIC style index, but it still achieved an excess return of 4.9% compared with CSI 300; From February 2017 to April 2020, the consumer sector rose or fell by 27.6%, ranking first in the CITIC style index, and achieved an excess return of 12.1% compared with Shanghai and Shenzhen 300.
The industry rotation effect within the consumption sector is obvious. During the narrowing of the three inflation scissors, the rotation effect among consumer industries is very obvious. Except for food and beverage, it is difficult for the stock price performance of other industries to stay ahead for a long time. Behind the industry rotation is essentially the rotation of performance growth. Generally, the stock price performance of industries with high performance growth will be better.
Faucets usually perform better. From the performance of the share price of the leading consumer relative to the whole consumer sector, the performance of the leading consumer was better than that of the whole consumer sector from May 2010 to August 2012 and from February 2017 to April 2020. The leading stock prices in the consumer sector perform better, mainly because the leading companies have many advantages such as brands and channels compared with non leading companies, and these advantages are difficult to be overturned in the short term, so they can stably obtain excess profits in the long term, so they are more sought after by investors.
With the narrowing of the scissors gap and the restlessness in spring, the performance of the consumer sector is worth looking forward to
This year's "spring agitation" may start in advance, and the consumer sector deserves attention. Spring agitation is reflected in most years of a shares, and has a great impact on the income of the whole year. Moreover, in recent years, the "spring agitation" has a tendency to advance to the "cross year agitation". Considering the pressure faced by the current economy and the economic support policies may be launched earlier, the agitation in this spring is also expected to start ahead of schedule. From the industry performance during the spring agitation, the consumer sector is gradually becoming the main force in recent years.
"Narrowing the scissors gap" superimposes "restlessness in spring", focusing on the three main lines and industry leaders. 1) high certainty and relatively good performance in Baijiu and medicine or better performance. 2) Benefiting from the liberalization of epidemic prevention and control measures, aviation, retail, hotel, airport and other industries previously affected by the epidemic may have more room for repair in the future. 3) Household appliances, new energy vehicles and mass consumer goods benefiting from subsidies.
Risk analysis: the epidemic situation worsened beyond expectations, and consumer demand was significantly lower than expected.
