Report summary:
This week’s market: dominated by absolute income thinking, gem and new energy led the decline
This week (December 20, 2021-december 24, 2012), there was still no “restless” market in the market, and the main broad-based indexes fell significantly. In terms of style, the value was dominant, while the new energy sector previously considered to be “the most deterministic in the short term and long term” fell significantly (- 6.7%). It should be noted that overseas disturbances are multifaceted, and the financing cost of global transaction funds is linked to the real interest rate of the United States, so no matter “true or false foreign capital” , under the tightening trend of the Federal Reserve, the probability of large fluctuations of the above funds is rising. More importantly, domestic investors are experiencing the logical evolution of some certainty in core asset investment since the beginning of the year: from “fear of missing” to “fear of losing”, absolute returns are dominating, and cracks are emerging in the past “consensus”.
“Steady growth” is the direction. We should not underestimate our determination because of technical uncertainty
At present, promoting infrastructure and stabilizing real estate are the main means of “stable growth”. Since the “730” meeting, the policy level has been conveying the signal of “stable growth” and is gradually landing and producing results: the issuance of government bonds has been accelerated since August; Since October, the medium and long-term loans of residents dominated by mortgage loans have increased from the same ratio; On December 20, the one-year interest rate of LPR was lowered, which helped to stabilize real estate sales, and the financing care measures for developers were gradually introduced; On December 22, the national development and Reform Commission made it clear that it will further simplify the management of investment audit and lay the foundation for financial development. In terms of the source of funds for “steady growth” worried by the market, the constraints of local governments may not be as great as expected, and the central government may become the main driver of “steady growth” due to its low leverage. In fact, the amount of special bonds issued in advance in 2022 is also higher than in previous years. In fact, after experiencing the implementation of “ensuring supply and stabilizing price” of bulk commodities in the third quarter of this year, We should be aware that we should not ignore the implementation of policy determination because we can not expect the final way to achieve the goal (nuclear capacity increase, mining increase and administrative price limit). For investors of cyclical stocks, the demand logic is replacing the supply logic. From “maintaining supply and stable price” to “stable growth”, cyclical investors also begin to stand on the friendly side of the policy, not the opposite side.
If “clockwise”
In the process of three rounds of recovery (2005-2007, 2009-2010 and 2016-2017), finance, coal and nonferrous metals always led the increase, while building materials ran through the whole process, with steel as the end. This round of “steady growth” The logic of is different from the previous one in that there are more positive changes on the supply side, which will lead to coal, nonferrous metals, steel The boom signal (price) of the traditional industry represented by building materials has become more flexible relative to the recovery of demand. In our annual strategy, “victory in the end” It is discussed that its long-term profit center is moving upward. The actual situation is that in the cycle market of 2021, investors are worried about its sustainability and do not give reasonable valuation and pricing. However, the next stage may be that the expected rebound will be ushered in before the profits of the cyclical industry have fully fallen, and the long-term contraction of valuation will be repaired. The market will regain the long forgotten “Pro cyclical” logic in the future, but we should also pay attention to new logical changes.
Light in the crack of consensus: the return of value
The breach of consensus has emerged, the steady-state structure of the market is being broken, and will continue to adjust in the short term, but hope is brewing. Economic fundamentals will be opportunities rather than risks, and the “Pro cyclical” logic left for nearly a year will return again, Investors can start to lay out: (1) financial sector under Credit stabilization: real estate, banking and construction industry driven by infrastructure and real estate orders; (2) profit revaluation in traditional cycle driven by demand recovery: coal, nonferrous metals (copper, aluminum), building materials and steel. Theme recommendation: Rural Revitalization (seed industry, agricultural machinery, cold chain and environmental protection).
Risk tips:
Uncertainty of covid-19 epidemic situation; The implementation of the steady growth policy was less than expected.
