Core view: the market responded positively to the two sessions, with obvious style switching before and after the meeting. The two sessions will be held soon in 2022. At that time, many important policies will be clearly implemented, including economic growth targets, fiscal and monetary policies and industrial development plans, which will have a significant impact on the capital market. We make statistics on the trend of A-Shares during the two sessions in the past 20 years for investors' reference.
According to historical statistics, A-Shares have a relatively positive market response before and after the national two sessions over the years, and are often accompanied by obvious style switching: from the improvement of risk appetite before the two sessions, growth stocks and small and medium-sized stocks have an advantage; During the two sessions, there was a narrow range of shocks, and the consumption style performed well; Then to the style switching after the two sessions, the consumption style is stable and the rise of large cap stocks is among the top.
From the trend of A-Shares in the two sessions cycles over the years, the most recent years of high growth are 2015 and 2019, which are also the year of the last two rounds of steady growth policies. According to the local government work report, steady growth is the top priority of economic work this year. With the gradual implementation of follow-up relevant measures, A-Shares are expected to strengthen again under the promotion of favorable policies.
Back to the present, A shares split before the NPC and CPPCC this year. The Shanghai stock index and Shenzhen stock index are all up in the wake of the Spring Festival. The gem refers to a rally that has been in the middle of February after a continuation of the adjustment trend before the holiday. But it has not yet returned to the pre holiday index position. The main reason for the index differentiation is that under the recent geopolitical tension and the gradual increase of interest rates in the United States, there is a certain suppression of risk appetite in the short term, and the gem dominated by growth style is relatively more affected. Judging from the rise and fall of various style indexes in the recent month, the cyclical and stable style performed better.
Overall, the external disturbance faced by the A-share market during the two sessions in 2022 mainly lies in the geographical situation and the US interest rate hike, which has a relatively limited impact on China's economy and duration. Investors are advised to avoid some overvalued sectors in the short term, lay out from the perspective of fundamentals in the medium and long term, pay attention to high-quality tracks with high growth rate and reasonable valuation, and actively grasp the market of the two sessions. Specifically focus on two main lines: one is the relevant sectors of steady growth with both attack and defense, and the other is the advantageous industries such as new energy with long-term investment value.
Statistics on the trend of A-Shares during the two sessions in the past 20 years
1. Before the two sessions: risk appetite is improved, and small and medium-sized growth is dominant. The two sessions are generally held in early March every year. The month before the two sessions is basically in the empty window period of performance disclosure. At this time, liquidity is generally in a relatively loose stage. Superimposed on the market's policy expectations for the two sessions, short-term risk appetite is improved. According to statistics, in the past 20 years, the Shanghai Composite Index rose or fell in the month before the two sessions of the National People's Congress, with a rise probability of 85% and an average increase of 2.22%. From the rise and fall of various style indexes before the two sessions, the growth style is dominant.
2. During the two sessions: it fluctuated in a narrow range, and the consumption style performed well
Compared with the month before the two sessions, the market trend during the two sessions is dominated by narrow shocks, mainly for the following three reasons: changes in policy expectations, asymptotic disclosure of annual reports, and short time cycle. According to statistics, the Shanghai stock index rose or fell during the national two sessions in the past 20 years, with a rise probability of 55% and an average increase of 0.46%. Judging from the rise and fall of various style indexes during the two sessions, the consumption style performed well. In the past 17 years, the median increase of CITIC consumption style index during the two sessions was 0.83%, leading other style indexes.
3. After the two sessions: style switching, and the performance of large cap stocks is better
According to statistics, in the past 20 years, the Shanghai Composite Index rose or fell in the month after the two sessions. Although the rising probability was less than that in the month before the two sessions, it rose by a large margin. Specifically, the rising probability of the Shanghai Composite Index in the month after the two sessions reached 75%, with an average increase of 4.26%. From the rise and fall of various style indexes after the two sessions, consumption and stable styles dominate, and growth styles rank the bottom. Compared with those before the two sessions, there is an obvious style switching. We believe that this is mainly due to the formal entry into the large-scale annual report performance disclosure period of A-Shares after the two sessions. At this time, the market generally pays more attention to the sectors with high performance certainty; At the same time, with the gradual implementation of relevant policies of the two sessions, the policy benefiting sectors are often more favored by funds in the short term.
Risk tip: geographical conflicts exceed expectations, economic downturn exceeds expectations, and historical backtesting does not represent the future trend
