Santa rally is a phenomenon in European and American stock markets. Driven by the festive atmosphere and the rebalancing of the fund's portfolio at the end of the year, the stock market usually continues to rise in the last week of December and the first two trading days of January (usually six days). However, disturbed by the Omicron mutant, the "Christmas rebound" may turn yellow. Superimposed on the "Hawk turn" of the world's major central banks, European and American stock markets have continued to decline recently.
On Monday, US Eastern time, Biden's economic expenditure plan was postponed, and the three major indexes of US stocks fell collectively. As of the close, the S & P 500 index fell 52.62 points, or 1.14%, to 4568.02; The main indexes of European stocks fell across the board. On Sunday, the Netherlands became the first EU country to re-enter the national blockade. As of the close, the German DAX30 index closed at 15239.67, down 292.02 points or 1.88% from the previous trading day.
The "structural bull market" atmosphere of A-Shares was also disturbed by overseas sentiment. Wu Zhaoyin, macro strategy director of AVIC trust, told the first financial reporter that overseas fluctuations may impact the sentiment of a shares. In addition, 3600 points is the "selling range" for the overall operation of A-Shares this year. Although the policy bottom is clear, with the implementation of RRR and interest rate cuts, it is in the empty window period of monetary policy at the end of the year, and risk sentiment is restrained. However, the consensus from all walks of life is that the central economic work conference has set the tone for steady growth. Previously, the pessimistic expectations of the market for the economy are expected to be repaired. After the first quarter of next year, the economic probability will hit the bottom and rise.
the "Christmas rebound" in overseas markets is blocked
Originally, the overseas market was ready to ignore the virus mutation and welcome the "Christmas rebound". However, the surge of cases and blockade measures led to a sharp decline in market sentiment.
For example, Britain is facing an Omicron "tsunami". Over the past week, the number of confirmed cases in Britain has soared. On December 17 local time, the number of newly confirmed cases in Britain exceeded 90000 in a single day, reaching 93045, once again setting a new record since the outbreak of the epidemic. 80.8% of the new cases in London were infected with Omicron strain. London mayor Sadik Khan announced that London had entered a "major accident" state.
The situation in the United States is also not optimistic. According to the latest report of the World Health Organization, the average daily number of confirmed cases of covid-19 in the United States has exceeded 100000 in the past seven days, becoming the "epicenter" of the global epidemic. US President Biden warned that Omicron is spreading rapidly and that those who have not been vaccinated will face a "severe and death winter".
The obstruction of the economic restart process is the key factor leading to the deterioration of market sentiment. Last Sunday, the Netherlands became the first EU country to re-enter the national blockade. Bars, restaurants and most non essential stores were closed until at least mid January; The German government tightened travel restrictions over the weekend; The British health secretary did not rule out restrictions in Britain before Christmas. He told the media that it was "a time for more caution"; Ireland has imposed a 8 p.m. curfew on bars and restaurants.
There are many views that although Omicron spreads rapidly, its symptoms may be lighter, but most experts still believe that it should not be underestimated. At present, promoting the third dose of vaccine to strengthen the vaccination plan is becoming an important measure of governments. Vaccine booster needle may become a new catalyst for vaccine stocks. Take Pfizer pharmaceutical, an American vaccine giant, as an example. Since the spread of the Omicron strain, its share price has risen all the way, with a maximum increase of more than 45%, and its total market value has soared to 343.8 billion US dollars (about 2194 billion yuan). In addition, Cansino Biologics Inc(688185) of A-Shares also began to move. Under the background of continuous correction of the market last week, Cansino Biologics Inc(688185) shares rose 16% against the trend.
But on the whole, risk sentiment in overseas stock markets has plummeted. Even the most stable S & P 500 index has recently fallen by about 200 points from a high level.
"Most traders in various countries leave for vacation in the last two weeks of the year, resulting in slow market trading. After last week's overwhelming central bank meeting, many market participants leave ahead of time this year. The S & P 500 index has risen by about 20% this year. Why should they continue trading at the risk of losing profits?" Joe Perry, a senior trader and cityindex analyst, told reporters.
financial stimulus blocked, monetary tightening fell sharply, and growth stocks
The prospect of global monetary tightening has also put pressure on the stock market, especially growth stocks driven by low interest rates.
The inflation, which hit a 40 year high in November, gave US Federal Reserve Chairman Powell a blow. If the interest rate is not raised in advance, the credibility of the central bank to maintain price stability may not be guaranteed. The Federal Reserve announced last week to accelerate the contraction of the table and hinted at raising interest rates from April 2022, three times in 2022 and 2023 respectively, which seems to embolden other central banks. Therefore, on the same day, the Bank of England unexpectedly announced an interest rate increase (the market was originally expected to be until February 2022), and the ECB's ultra dove argument also converged. The sudden "Hawk turn" worried investors is the high valuation of financial assets. In fact, small and medium cap U.S. growth stocks sensitive to interest rates have been hit hard. Arkk, the flagship innovation fund of "wooden sister", which pursues high valuation growth innovation companies, fell more than 20% this year, while the S & P 500 index rose more than 2% in the same period.
Matt weller, global research director of Jiasheng group, told reporters that investors have returned with full load in the past two years. From the United States to Germany to Australia, major stock indexes are looking forward to rising for the third consecutive year. However, in 2022, the market is facing many adverse factors that threaten the rising momentum. The result of the generally high returns in more than 10 years is that the valuation is relatively higher than the historical average, and the index p / E ratio is between 22 (Dow) and 36 (NASDAQ). Generally speaking, the higher the initial valuation, the lower the future return.
Perry mentioned to reporters that what needs to be paid attention to is the "Diamond top" of the NASDAQ index, which represents science and technology growth stocks. This technical form suggests that it may retreat down by 10%. At present, the index still hasn't broken through the "Diamond top", and traders expect the NASDAQ to decline.
In addition to monetary tightening, the obstruction of US fiscal stimulus also impacted market sentiment, namely Biden's flagship bill "build back better act". US Democratic Senator Joe Manchin recently said that he was "unable to vote for the continuation of this legislation" on the grounds of inflation concerns, which means that the bill is unlikely to be passed in its current form, which has hit the prospects of US economic growth. Goldman Sachs then lowered the US GDP forecast for 2022, from 3.5% to 3% in the second quarter and from 3% to 2.75% in the third quarter. As the bill includes a $550 billion tax credit for new energy vehicles, the obstruction of the bill also led to a decline in the global new energy sector.
Nevertheless, the agency did not "sentence the bull market to death". After all, the U.S. economy is still in an expansion cycle. Weller told reporters that even if it has risen for three consecutive years, the main stock indexes (70%) can still reap another year of positive earnings. Although interest rates may rise slightly, the stock market may benefit from "no choice" trading in 2022. Especially in the environment of decades of high inflation, the attraction of safe haven assets such as cash and bonds has bottomed out.
However, choosing more defensive targets has become the current mainstream operation. Wilson, chief U.S. stock strategist at Morgan Stanley, said that in the past four months, the Federal Reserve has prepared investors for a potentially very long process, namely the exit of monetary easing. In this case, the most expensive stocks have been hit very hard. In 2022, we need to be vigilant against overvaluation and pay attention to the stability and realizability of profits, so we prefer more defensive high-quality large cap stocks.
after loose cashing, A-Shares temporarily fell into shock
In December, China's "policy bottom" began to be clear. A-Shares were once excited, and the Shanghai composite index broke through the 3700 mark. After the rapid landing of the standard reduction, the interest rate cut unexpectedly landed this week (the one-year LPR was reduced by 5 basis points) after the central economic work conference released the signal of maintaining stability. However, given that A-Shares seem to be in a policy window before the end of the year, the current market sentiment tends to be cautious again.
The A-share market fell for two consecutive days (last Friday and this Monday) due to the impact of the heavy crackdown on "fake foreign capital" by regulators. As of the closing on December 20, the Shanghai Composite Index fell 1.03% to 3593.6 points, and the gem fell 2.95%.
However, on December 21, A-Shares rebounded. The real estate sector broke out completely, the sector index rose nearly 5% all day, and individual stocks set off a wave of limit trading. Recently, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises, encouraging banks to carry out M & a loan business in a stable and orderly manner, and focusing on supporting high-quality real estate enterprises to merge and acquire high-quality projects of large real estate enterprises in danger and difficulties.
Li He, general manager of Yude investment research department, told reporters recently that in the process of rectifying the real estate industry, the differentiation in the industry will intensify. Perhaps state-owned real estate enterprises with financing advantages will obtain higher market share in the competition. Their leverage ratio is generally low, and the operation ability of some companies is also very strong.
However, the agency is still cautious about the sustainability of the real estate market. Some investment managers also mentioned to reporters that the domestic and foreign bonds of the real estate industry will expire intensively in the first quarter of next year, and those real estate enterprises facing high short-term liquidity risk may face maturity pressure. In addition, in the past, the real estate industry was "big to save small", such as rongchuang and Shimao, but these enterprises also have pressure themselves.
Wu Zhaoyin told reporters that in view of the weakening of overseas risk sentiment, A-Shares have entered the policy window period, and the "cross year market" may be less than expected. "Throughout the year, the Shanghai Composite Index operates around the central axis of 3500 points, and more than 3600 points belong to the selling range. Further market or policies may need to wait until around the Spring Festival."
However, in the medium term, institutions are generally optimistic about the prospect of A-Shares against the background of China US cyclical differentiation. Morgan Stanley Huaxin Fund mentioned to reporters that the CSRC intends to strictly supervise fake foreign capital and reduce market volatility. From the actual situation, the stock market value held by Chinese funded institutions accounted for less than 4% of the funds going north, and the transaction amount accounted for about 1% of the North Trading. 98% of the investors have opened A-share securities accounts, which is expected to have little impact on the actual market, and there is an emotional impact in the short term. In addition, the central economic work conference set the tone for steady growth, after which the pessimistic expectations of the market for the economy are expected to be repaired.
The actual controller of Huanyi investment and CIO takasugi also told reporters that the disappearance of the old industry may indeed bring economic downside risks, but the rise of the new industry will bring more opportunities. Energy storage and third-generation semiconductors will be the hot spots next year. For the consumption, medical treatment and building materials that have fallen seriously this year, it is not ruled out that there will be clearer opportunities next year.
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(First Finance)
