After the Politburo meeting on December 6, 2021, we were exclusively and firmly optimistic about the stock market and judged the stock market take-off (see the comments of the first macro Politburo meeting: stability + no tossing = stock market take-off 20211207). As a result, the stock market rose sharply. The central economic work conference further strengthened our logic of bullish on the stock market.
The current market is very similar to the market at the end of 2018. Combined with historical experience, we continue to be optimistic about the stock market, especially Hong Kong stocks. The Hang Seng index is expected to reach 28000! Due to the limited decline of A-Shares before, the repair range of A-Shares is not as good as that of Hong Kong shares, but there is still hope for the rise of CSI 300 to 5300. In terms of the bond market, although historical experience is biased towards a positive interpretation, we comprehensively judge that the bond market is more likely to be an interval shock.
For the stock market, we continue to be optimistic and the logic remains unchanged. First, the setting of "stability" and real estate has reduced the market's concern about the possible hard landing of the economy, and the enterprise's profit expectation has increased; Secondly, "no tossing" reduces the market's concern about regulatory policies and improves the market's risk appetite; In addition, monetary policy remains neutral and loose. The combination of "stability + no tossing + monetary easing" has formed obvious support for the stock market.
After the policy correction, Hong Kong stocks have more room for repair due to the previous decline; Shanghai and Shenzhen 300 fell less before, and the repair space is small. Similar to 2018, due to correction, it is difficult for the index to exceed the previous bull market high in the short term. By simply comparing the situation in 2018, we speculate that the high point of the current round of repair of CSI 300 may be about 5300, while the Hang Seng index is about 28000.
10-year Treasury bonds are difficult to break the 2.7% point, even if the Central Bank cuts interest rates. Once the Central Bank cuts interest rates, it is a good short opportunity. Since the lowest point before the epidemic is 3.0%, if the epidemic does not change much, it is also quite difficult to break 3.0% of the 10-year national debt, which is expected to fluctuate mainly in the range of 2.8-3.0%.
Risk tip: the economic repair is not as expected
