Core view
The intention of policy stability maintenance is explicit. The Politburo meeting and the central economic work conference were held one after another. It was clearly determined to adjust and maintain stability, which was obviously good for the stock market. 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.
Initial results have been achieved in fiscal development. In November, government financing was further accelerated, local government special bonds were issued "as far as possible", and the net financing of urban investment bonds was accelerated. In addition, government deposits decreased seasonally, and the intensity of indicating fiscal expenditure was also increasing; At the same time, the personal mortgage loans of residents on the demand side of real estate have been further released, which will help to alleviate the capital shortage of real estate enterprises. But at the same time, we should also see that the driving force of economic domestic demand growth has not improved significantly, wide credit lacks financing subjects, and depends more on government power and bank scheduling. The cash situation of enterprises has not improved significantly.
Peripheral risk appetite rebounded. The preliminary research conclusion of the laboratory on the Omicron virus strain was positive. The overseas market passed the initial panic period, the risk appetite rebounded, and the peripheral markets represented by US stocks began to repair.
US inflation is running at a high level. In November, the core CPI of the United States was 4.9% year-on-year, the previous value was 4.6%, and the market expectation was 4.9%. Core CPI was 0.5% month on month, the previous value was 0.6%, and the market expected 0.5%. Although the US CPI is in line with market expectations, it is still running at a high level as a whole, or it may have an impact on the pace of the Fed's taper. We need to pay further attention to the policy orientation of the Fed's interest rate meeting on December 14-15.
Outlook. The current market is very similar to the market at the end of 2018, both of which usher in policy correction at a time of great downward pressure on the economy. Combined with the historical trend, we believe that the economy will usher in obvious repair with policy support, which is good for the stock market, while the performance of the bond market will be relatively neutral. A-Shares had little decline and little rebound, while Hong Kong stocks had more room to rebound because of their large decline. Treasury yields may remain low and volatile at the current point.
Risk warning: the epidemic situation exceeded expectations
