Core view:
In the fourth quarter, it is expected that the year-on-year apparent growth rate of fixed investment, consumption and export will continue to decline due to the increase of the base. However, under the background of continued efforts of macro-control policies and strong resilience of foreign demand, it is expected that the two-year compound economic growth rate will pick up in the fourth quarter, and the recovery of new kinetic energy may be better than market expectations. On November 24, the national Standing Committee put forward new downward pressure on the economy. On November 18, the entrepreneur Symposium re mentioned “six stabilities and six guarantees”, which means that the weight of stable growth in macro-control will be increased again, and the policy will take care of the economy. On the one hand, the fiscal policy will continue to exert force, and on the other hand, the policies of real estate financing, production and power restriction have also been moderately corrected.
In November, the role of ensuring supply and stabilizing prices appeared, the impact of dual control of energy consumption weakened, the proportion of upstream profits fell, enterprise profit growth entered the downward range, manufacturing expansion improved significantly, the decline rate of real estate investment will slow down, the momentum of infrastructure investment is expected to rebound, and the export toughness is full. In terms of inflation, PMI raw materials and ex factory price index fell rapidly, PPI is expected to peak and fall, and CPI will accelerate upward. In terms of liquidity, under the guidance of policy correction and expectation, the margin of credit supply is improved, and the direct financing such as special bonds is accelerated. It is expected that the growth rate of social finance will rebound slightly.
Core data forecast in November:
Entity: in terms of social zero, the travel of residents has improved slightly, the price of pigs and vegetables has rebounded, but the PMI in the service industry has fallen slightly and the car sales are depressed. It is expected that the growth rate of social zero in November is 3.2% year-on-year. In terms of fixed investment, manufacturing and infrastructure investment are expected to maintain a recovery trend, and the decline rate of real estate investment is expected to slow down. It is expected that the cumulative year-on-year growth rate of fixed assets in November will be 5.4%. In terms of export, although the freight rate has dropped, the port feedback is that the export of Christmas goods in November is strong, and the export growth rate is expected to be 22% in a single month in November.
Production: supply constraints are eased, but the sustainability may not be strong. Since September, under the dual control constraints of energy consumption, power and production restrictions have been continuously implemented in various places, and supply constraints have become the main constraints on industrial production. In November, with a series of measures to stabilize prices and ensure supply, the supply constraints were significantly alleviated and the release of enterprise capacity was accelerated. However, we believe that the rebound in future industrial production may be less sustainable than market expectations, and the current employment activity and demand are still weak. To sum up, we expect the added value of industries above Designated Size to grow by 3.6% year-on-year in November.
Profit: the proportion of upstream profits fell, and the profit growth entered the downward range. In terms of price, PPI is expected to peak and fall in November, but it will remain relatively high in the short term; In terms of volume, it is expected that short-term industrial production will rebound, but the sustainability may not be strong. Overall, we expect that the profit growth will enter the downward range, but the structure will tend to be balanced. It is expected that the profit of industrial enterprises will increase by 16.5% year-on-year in November.
Inflation: PPI peaked and fell, and CPI accelerated upward. In terms of CPI, it is expected to converge slightly month on month in November, and the low base pushed up CPI to 2.4% year-on-year. In terms of food, pork prices continued to rise due to the seasonal recovery of demand and farmers’ reluctance to sell; The vegetable supply situation has improved, and the price increase has converged significantly. In the non food sector, the recovery of the service industry slowed down due to the multi-point distribution of the epidemic in China; At the same time, the epidemic situation in Europe worsened, the United States released crude oil reserves in conjunction with Japan and South Korea, the high level of international oil prices fell, and the transmission effect on CPI weakened. In terms of PPI, it is expected to turn negative month on month, down to 12.7% year-on-year, opening the downward channel. Driven by the policy of ensuring supply and stabilizing price, the coal price remained stable after falling from a high level. Meanwhile, affected by the continued weakening of downstream demand such as real estate, the prices of high energy consuming industries such as cement, chemical industry, nonferrous metals and black generally fell in November.
Liquidity: it is estimated that the new social financing scale in November is about 2.78 trillion yuan, and the corresponding stock of social financing scale has a year-on-year growth rate of about 10.2%, of which the new RMB loans based on social financing caliber are about 1.4 trillion yuan. It is generally expected that the growth rate of social finance from September to October has proved the bottom area of this tight credit cycle, and the growth rate of social finance from November to December will rebound slightly. In addition, it should be noted that the obvious loosening of financing regulatory policies may promote the growth rate of social finance and credit to exceed expectations, and the continuous downturn of physical demand may also promote the growth rate of social finance and credit to be lower than expectations.
