Key investment points:
Market review: the index fluctuated and adjusted, and the market sentiment cooled down
In the market, the Wande all a index continued to callback in the past five trading days, with a cumulative decline of 1.03%. The turnover decreased significantly compared with that in the middle of the month, returning to around 1.0 trillion yuan. The total net outflow of northward funds this week was - 1.221 billion yuan. In the past five trading days, agriculture, forestry, animal husbandry and fishery, food and beverage, building materials, commercial trade, real estate and other sectors led the increase; Electrical equipment, non-ferrous metals, iron and steel, chemical industry, communication and other sectors led the decline.
The "asymmetric interest rate cut" lowered LPR, and the "steady growth" tool was gradually implemented
On December 20, the people's Bank of China announced the quoted interest rate (LPR) of the loan market in December: the one-year LPR fell again after 20 months. In December, the one-year LPR was reported at 3.80%, the last time was 3.85%; the varieties over 5 years were reported at 4.65%, the last time was 4.65%.
We believe that the one-year LPR reduction is basically in line with the consensus expectations of the market. Therefore, the A-share market has not been significantly boosted after the news, and the correction trend of last Friday continues. During the year, there were two comprehensive RRR cuts and phased targeted interest rate cuts, which effectively alleviated the pressure on bank capital cost and gradually built a downward space for LPR with market-oriented quotation. The reduction of LPR focuses on two key signals: first, the policy tools to benefit the real economy are accelerating the landing. Based on the current fundamental situation, we predict that the downward pressure on China's economy will be released intensively in the first half of next year. Specifically, the downward trend of exports is difficult to change. Whether it is the continuous "Eagle" voice of the Federal Reserve or the rapid spread of Omicron mutant, the external demand may gradually decline, and the support rate for the high export boom is likely to be difficult to continue. As a result, the manufacturing investment in some industries previously driven by exports may be subject to downward pressure, superimposed with the impact of a high base, and the "stagnation" of China's economy may be further exacerbated. However, the policy side has continuously released the loose signal of "cross cycle adjustment" and lowered LPR to confirm the expectation of easing again, focusing on reducing the financing cost of the real economy and hedging the downward pressure of the economy, Against the background of fundamental differences at home and abroad, it is possible to witness another RRR reduction in the first quarter of next year. Second, the real estate market has a strong determination to regulate and control, and the core idea of "housing without speculation" remains unchanged. While reducing the one-year LPR, the five-year LPR remains unchanged, mainly because the regulation policy of "housing, housing and non speculation" is not relaxed, the recent real estate is expected to be slightly repaired, and the credit environment of real estate enterprises is slightly improved. However, the repair of the trading market takes time, the land acquisition willingness of enterprises is still not high, and the recent information is empty, and the valuation of some real estate enterprises has been repaired, However, in 2022, the overall capital side of enterprises will still be tight, the pressure on small and medium-sized real estate enterprises will intensify, the industry may accelerate the "reshuffle", and the market share will concentrate on the head again.
The price data of Europe and the United States burst again in November, and the Fed's expectation of raising interest rates rose again
On December 23 local time, according to the report of the U.S. Bureau of economic analysis, a subsidiary of the U.S. Department of Commerce, Us personal consumption expenditure The (PCE) price index increased by 5.7% year-on-year in November. Excluding energy and food prices, the core PCE price index increased by 0.5% month on month (MOM) and 4.7% year-on-year (YoY), a new high in nearly 40 years. Meanwhile, consumer spending in the United States increased by only 0.6% month on month (MOM) in November, down sharply from 1.4% last month. Germany's import price index in November increased by 24.7% year-on-year (YoY), the fastest growth since 1974, and is expected to be 22.5% 3%, the former value was 21.7%.
The inflation pressure in Europe and the United States remains high and difficult to reduce. The upward pressure on inflation in European countries still mainly comes from supply constraints, including the upward pressure on prices caused by the energy shortage under the setback of the supply chain. Inflation in the United States is different. From the data, the CPI and PCE indexes of the United States increased sharply in November. Although the sharp rise in energy prices is also an important driving factor, this factor is more affected by the supply-demand gap caused by strong demand. The core problem comes from the extremely loose policy implemented by the United States after the outbreak of the epidemic, which quickly bottomed out and rebounded China's economy, However, it also makes the overall economic structure unbalanced, which is finally reflected in the upward pressure of inflation that is difficult to contain. At the same time, the labor shortage in the United States continues, and the rise of house prices, rents and hourly wages makes it more "urgent" to deal with inflation. We believe that the Federal Reserve may temporarily focus on the latter in the face of economic growth and inflation in 2022, After all, excessive liquidity entering the financial system and continuous fermentation will bring great risks to the economy, but the attitude of Wall Street may also play a subtle role in this process. In conclusion, we believe that the Fed may choose to start raising interest rates in the first half of next year, when China's economy is "sluggish", but the probability of raising interest rates three times in the whole year may not be large, and Europe and Japan are expected to maintain easing.
The epidemic situation at home and abroad has an obvious trend of counterattack, which may once again impact the operation of the global economy
This week, the epidemic situation at home and abroad showed a deteriorating trend. The global average daily newly diagnosed cases exceeded 650000, which has exceeded the level in mid August. The number of newly diagnosed cases in a single day in the United States once exceeded 250000, the number of newly diagnosed cases in the United Kingdom exceeded 90000, and the number of newly diagnosed cases in South Korea was about 6000. The situation is not optimistic. At present, 89 countries and regions around the world have reported Omicron mutants, and the pressure of "external defense input" in China continues to increase, the National Health Commission said on the 20th. We believe that the resurgence of overseas epidemic may impact the pace of economic recovery in Europe and the United States, focusing on frustrating the demand side. At present, the epidemic in Southeast Asian countries is basically controllable, and the global supply problem has not shown any signs of aggravation. It is recommended to follow up, focus on the characteristics, diffusion degree and impact on prices of Omicron mutant, and then evaluate the expected changes in policies of overseas central banks. At the same time, the epidemic situation in some parts of China is still severe. The newly diagnosed cases in Shaanxi are maintained at about 50 in a single day, and there is no obvious inflection point. Superimposed near the peak of population flow during the Spring Festival, local and even national epidemic prevention and traffic restriction measures will be further tightened, which will once again have an impact on catering services, leisure and entertainment, passenger transport and other industries.
Weekly view: focus on the opportunities of the required consumption sector
At the macro-economic level, the recent policy has released a clear signal to promote fiscal advance. Infrastructure, as an important counter cyclical adjustment means supporting the underlying economy, is expected to accelerate its implementation in the first half of next year. At the same time, the prevention and control of local financial risks will not be relaxed. During the economic downturn, tax cuts and fees to help enterprises tighten local tax revenue, and it is difficult to relax the control of non-standard funds. We predict that the recent direction of infrastructure investment may obviously focus on "new infrastructure" rather than traditional infrastructure. 5g base stations, digital economy infrastructure, urban and rural public infrastructure and other industries are expected to expand. At the same time, with the great downward pressure on the economy, the profit expectation is lower or the willingness of enterprises to invest is suppressed to some extent. However, at present, the overall capacity utilization rate of the manufacturing industry is at a high level. The narrowing of the scissors gap between superimposed CPI and PPI drives the downward tilt of the industrial profit pattern, and the support of investment in the middle and lower reaches of the manufacturing industry is relatively strong, In particular, the medium and high-end manufacturing industry is expected to continue its high boom under the policy boost.
In the market, the index remained low this week, the market sentiment was significantly colder, the fermentation of policy easing expectations came to an end temporarily, and concerns about the risk of outbreaks outside China and changes in overseas liquidity increased. In terms of the industry, the concept sectors such as pneumonia detection, masks, vaccines, food processing and dairy products led the increase. The previous hot sectors such as lithium and photovoltaic experienced a significant correction, and the performance of the industry was basically in line with our previous configuration suggestions.
At present, the trading activity of the A-share market has cooled significantly. Under the influence of limiting "fake foreign capital" and overseas frequent interest rate increase signals, northward funds flowed out sharply this week. We believe that under the background of relatively stable fundamentals, the attractiveness of China's capital market continues to strengthen after the epidemic, the volatility caused by short-term emotional changes is difficult to change the long-term capital market trend, and the volume of A-share market is expected to continue to expand. Meanwhile, under the downward expectation of earnings, the overall trend upward momentum of A-Shares is insufficient, but structural opportunities still exist. The investment logic adheres to the high boom track supported by policy and industrial logic and the low reversal direction with strong risk aversion attribute.
In terms of industry, (1) Pay attention to the opportunities of the mandatory consumption sector and durable goods consumption sector with strong risk aversion attribute. In the face of the repeated epidemic, China's mandatory consumption continues to show resilience. Under the background of continuous improvement of residents' employment and income, the overall profitability of the industry is highly uncertain, and the valuation of the mass sector is currently in a reasonable range, superimposing the profit space expansion brought by the moderate upward CPI , the configuration is required, and the consumption segment has better cost performance. At the same time, China's consumption is expected to be further boosted by the policy. Household appliances and automobiles may be the core driving point of "expanding domestic demand". It is suggested to pay attention to the automobile sector benefiting from the low interest rate and the household appliance sector expected to usher in the low reversal. (2) The wind power sector boosted by the "energy transformation" policy is expected to maintain a high boom. Technological innovation has driven the cost of wind turbines down significantly. The implementation of the "large wind power base" project is expected to further expand the installed capacity. Under the current fundamentals, the wind power industry may usher in a high boom cycle. It is suggested to pay attention to the leading targets with obvious technological advantages. (3) This week, photovoltaic, lithium ore and other sectors experienced a significant correction. On Friday, driven by negative factors such as the reduction of the scarcity of lithium ore, the acceleration of the industrialization of alternative sodium ion batteries and the lower than expected terminal demand, the concept of lithium battery fell sharply again. We believe that the long-term good trend of new energy panels has not changed, but against the background of long-term rise and accelerated industrial development However, the negative information brought by technological innovation may cause large selling pressure on the subject with high valuation in the short term. It is suggested to reasonably control the position.
Medium and long term strategy
In the medium and long term, we suggest investors continue to focus on three directions. Consumption sector: medicine and consumption upgrading. Long term high-quality track: carbon neutralization, scientific and technological innovation and new infrastructure. Stable bottom position variety: big finance.
Risk statement
Global liquidity tightened more than expected; The global epidemic situation has exceeded expectations; Macroeconomic growth fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
