Last week (12.20-12.24), the stock index opened low, the Shanghai index fell 0.39% to close at 3618.0 points, the Shenzhen Component Index fell 1.06% to close at 14710.33 points, the small and medium-sized 100 rose 0.04%, and the gem index fell 4.00%; In terms of industry sectors, agriculture, forestry, animal husbandry and fishery, food and beverage and building materials led the increase; In terms of theme concepts, the exclusive drug index, Lianban index and avian influenza index were among the top gainers; The average daily turnover of Shanghai and Shenzhen stock markets was 1086.042 billion. The turnover of Shanghai and Shenzhen stock markets decreased by 6.71% compared with the previous week, including 8.87% in Shanghai stock market and 5.09% in Shenzhen stock market; In terms of style, large cap stocks have a comparative advantage, of which Shanghai Stock Exchange 50 rose by 0.35% and China Stock Exchange 500 fell by 0.49%; In terms of exchange rate, the closing point of US dollar against RMB (CFETS) was 6.3700, down 0.07%; In terms of commodities, icewti crude oil rose 2.74%, Comex gold rose 0.29%, Nanhua iron ore index rose 5.47% and DCE coking coal rose 7.73%.
Market style may switch, optimistic about the consumer and financial sectors. From the historical law, the market index of A-share market performed better from January to February, and there is usually a cross year market. We expect that the market blue chip market will continue to perform in the next 1-2 months. The trend of CSI 300 index dominated by financial sector and consumer sector is higher than that of gem dominated by Nanjing portfolio, and there is a strong driving force for style switching in the market. Recently, the peripheral European and American market index has stabilized and rebounded, and the Shanghai and Shenzhen 300 index with strong linkage with the periphery may pick up, but Ning portfolio may continue to drag down the performance of gem index. Recently, the Federal Reserve has also released the signal of accelerating liquidity tightening. Starting from January next year, the Federal Reserve will reduce the monthly asset purchase scale by $30 billion, compared with $15 billion a month earlier; The dot matrix of FOMC of the Federal Reserve in December shows that interest rates will be increased three times in 2022 and 2023, with 25 basis points each time. It is expected that global liquidity will be further tightened in 2022, and the performance rate of global stock markets in 2022 is less than that in 2021. Although the tightening of liquidity has accelerated, there may be little room for the contraction of US stock valuation next year due to the increased concentration and differentiation of the performance of us listed companies to the head, which will boost the improvement of US stock valuation.
China’s liquidity is reasonable and abundant, and there are still structural opportunities in the market. In December, China’s one-year LPR decreased from 3.85% to 3.8%, and the five-year LPR was 4.65%, unchanged. The one-year LPR fell, releasing the signal of loose liquidity, and real estate development loans and consumer loans are expected to improve. Although the global liquidity margin is tightened in 2022, the interest rate gap between China and the United States is at a high level, and the RMB exchange rate is also at a high level. China’s monetary policy has more room for operation. It is expected that China’s monetary policy will be “self dominated and reasonably abundant liquidity” next year, with limited interference from external markets. Next year, China’s policies will support small and micro enterprises, science and technology enterprises and green enterprises. In the third quarter of 2021, the net profit attributable to the parent company of all A-Shares was – 0.18% year-on-year. Generally, it takes 5-7 quarters for performance growth to get out of negative growth. It is expected that there will still be some pressure on the performance of A-share listed companies next year. It is suggested to avoid the performance disclosure period next year, Liquidity and sentiment (favorable policies) may be the sources of excess returns. In the past, A-share policy bottom, market bottom and economic bottom usually appeared in turn. Next year, with the transmission of wide currency to wide credit, the growth rate of social finance is expected to hit the bottom and rebound. It is expected that the stock market will also lag the growth rate of social finance for 1-2 months to reach the bottom and rebound, and the market may show a V-shaped trend.
Investment advice It is estimated that in 2022, China’s asset allocation of major categories will move from the “stagflation like” stage (economic downturn + upward inflation) to the “recession” stage of Merrill Lynch clock (economic downturn + lower inflation). The recommended asset allocation order is: bonds > stocks > commodities. It is expected that the A-share market will still achieve positive returns in 2022, but the index performance may be lower than that in 2021. It is optimistic about the following four sectors in turn: (1) In the next 1-3 quarters, the performance improvement is expected to be from strong to weak: national defense and military industry, household appliances, transportation, communications and computers; (2) track stocks such as new energy. It is expected that the differentiation of track stocks of new energy will intensify, the stocks with confirmed performance will still grow high, and the stocks with falsified performance will be corrected; (3) Downstream consumer sector. In November, China’s PPI rose 12.9% year-on-year, CPI rose 2.3% year-on-year, and the scissors gap is at an all-time high. It is expected that the convergence period of this round of ppi-cpi will continue from November 2021 to August 2022. The consumer sector will probably achieve excess returns in the first half of next year, so we can pay attention to the food, beverage and home appliance industries; (4) The epidemic damaged sector. At present, the epidemic has spread to India, Africa and other places with the weakest vaccination, which may mean that the global anti epidemic process has come to an end. In 2022, with the global epidemic under control, the epidemic damaged sector has valuation and repair power, which can be focused on: aviation, airports, tourism, hotels, cinemas, etc.
Risk tip: macroeconomic downturn, recurrence of the epidemic, fluctuations in overseas markets and deterioration of China US relations.
