1. Triple pressure. In December, the central economic work conference first put forward the triple pressure of “demand contraction, supply shock and weakening expectation”, which highlights the necessity of stabilizing growth and expectation in 2022. “Demand contraction” is mainly reflected in the current weak domestic demand, in which consumer services are still relatively weak disturbed by the epidemic, and infrastructure and real estate investment continue to be weak. The “supply shock” has eased after the fall of commodity prices, but it is still disturbed by the global lack of core and the periodic shortage of power supply in China. The “weakening of expectations” is reflected in the great pressure to complete the economic growth target next year. Among them, the operating pressure of small and medium-sized enterprises deserves special attention.
2. Ppi-cpi convergence. In November, the growth rate of PPI dropped from the record high of last month, and CPI rebounded significantly. The top of the current round of ppi-cpi scissors difference is basically confirmed, and it will continue to converge in the future. The convergence process of ppi-cpi is often accompanied by the obvious recovery of the proportion of profits in the middle and lower reaches. After October this year, the proportion of profits in the middle and lower reaches began to rise from the bottom. The convergence environment of ppi-cpi has a certain guiding effect on the allocation of large categories of assets, which is reflected in the gradual peak and decline of commodity prices. In the medium and long term, stocks and bonds begin to show the allocation value.
3. Tight outside and loose inside. In 2022, the liquidity environment is tight outside and loose inside. The dislocation of China US economic cycle determines the reverse of policy cycle. Next year, the direction of US fiscal and monetary tightening will be determined, and the deleveraging of government departments on the fiscal side and the interest rate increase and contraction on the monetary side will come in parallel. China’s liquidity environment is still stable and loose. The easing opportunity is in the first quarter of next year. Whether the MLF interest rate will be reduced depends on the actual effect of the current implemented policies on credit easing. Taking history as a mirror, next year is similar to the situation when there is a deviation from the China US policy cycle from the end of 2014 to the end of 2015. The Fed’s entering the interest rate increase cycle will significantly restrict China’s interest rate reduction, and the RRR reduction will still occur, but the frequency will not be too high.
4. Structural credit. Wide credit is an important goal of monetary policy in 2022. In the environment of overall recovery of physical liquidity, abundant volume, price reduction and structural differentiation will be the main characteristics, and structural wide credit can be expected. Wide credit needs top-down policy drive and bottom-up carrier support. The central bank can encourage commercial banks to create money by relaxing the three constraints of interest rate, liquidity and capital. In terms of carriers, the path of wide credit next year will probably rely on green loans, but the scale is limited. Real estate needs to pay attention to the degree of relaxation of policies. It is expected that the range of credit expansion in this round will be relatively restrained. The stabilization and even slight rise of macro leverage ratio next year is in line with expectations, and the switch from passive deleveraging at the molecular end to active deleveraging at the molecular end is expected to be deduced.
5. Steady word first. In December, the Politburo meeting clearly pointed out that “next year’s economic work should be stable”, and then 25 words of “stability” appeared in the full draft of the central economic work conference, making it clear that “stability” is the main line of policy regulation and control throughout next year. From the perspective of aggregate policy, under the idea of “stability first”, the aggregate policy can be further relaxed. In the first quarter, the central bank can reduce the reserve requirement or even interest rate again, and the increasing trend of fiscal policy expenditure intensity is determined. From the perspective of focus, expanding domestic demand will become the primary focus of “stabilizing the word” in 2022. On the one hand, while consolidating the focus of bulk consumption such as automobiles and household appliances, new consumption support such as online consumption and green circular consumption may be strengthened, on the other hand, the progress of infrastructure investment will be accelerated. In addition, under the guidance of the prudent introduction of policies with contraction effect, the real estate industry is bound to become an important field highlighting the “stability” in 2022. The industrial regulation policies may continue to be relaxed, and the risk disposal of individual real estate enterprises is more stable.
6. Moderately ahead. Under the background that the economy in 2022 may be low before and high after, “moderately ahead” will become the key word of policy regulation in 2022. In terms of monetary policy, as the market’s expectation of the Fed’s interest rate increase time continues to move forward, China’s monetary policy has reached the window period. It is expected that the aggregate policy next year will be used to cooperate with the counter cyclical adjustment policy and make efforts in advance to stabilize the macro-economic Market. Whether the comprehensive interest rate reduction will be implemented before and after the two sessions next year deserves attention. In terms of fiscal policy, the development trend of infrastructure projects is determined in advance. On the one hand, the progress of investment has been accelerated, and the pace of issuance of local government special bonds has moved forward; On the other hand, the project arrangement and project construction should be properly advanced, and the new and old infrastructure should be put into force at both ends.
7. Valuation driven. The pure performance driven market occurs in the years with the best nominal GDP growth, similar to 2010, 2013 and 2017. 2021 is a typical performance driven structural market. In 2022, the driving force of performance will decline, and the change of valuation is more important. Since 2009, there have been three systematic valuations of a shares. The core driving force of systematic valuations is loose liquidity and stable policies. The valuation improvement in 2022 is not systematic, but the periodic valuation can be expected. In 2022, under the condition of general performance growth and valuation driven, the index volatility and amplitude will increase.
8. Style switching. This year, the market amplitude is small, but the differentiation between styles is significant. Next year, the changes of macro environment and micro trading structure will drive the style switching. From the perspective of large and small disk style, under the pattern of long-term dominance of small and medium-sized disks, it is expected to usher in the rebalancing of large and small disk style next year. The core is the strength of steady growth policy and whether the economy can stabilize and recover. From the perspective of industry style, the switching from cycle to consumption is relatively clear, and the switching from growth to finance depends on the resonance between economic trend and interest rate. Next year, consumption is expected to usher in a simultaneous rise in volume and price, with strong certainty.
9. Consumption relay cycle. The cycle style of 2021 deduces the recovery market of simultaneous rise of volume and price. Looking forward to 2022, the social zero and CPI will rise synchronously year-on-year, and consumption is expected to usher in simultaneous rise of volume and price in the relay cycle. Inflation continues to spread downstream, the price rise tide of Listed Companies in the consumer sector continues to spread, wine enterprises and pharmaceutical enterprises raise prices successively after the price increase of food processing, opening up the space for industrial profit improvement, and the profit pattern upstream and downstream of the industrial chain ushers in redistribution. The performance expectation of the consumer sector in 2022 is better than that of the cycle sector as a whole. In terms of industry allocation in the consumer sector, attention is paid to food and beverage, agriculture, forestry, animal husbandry and fishery with expected price rise, as well as automobiles benefiting from the decline of upstream raw material prices and small household appliances unaffected by real estate.
10. Finance dances. In 2022, China’s economic trend will be low before and high after. In the second half of the year, with the stabilization of China’s economy and the opening of the overseas interest rate increase cycle, the interest rate trend is expected to pick up, and the economy and interest rate will rise in resonance. Looking back on history, during the period when the economy and interest rates rose simultaneously, financial stocks performed better. At present, the valuation and prosperity of the financial sector are at the bottom, and it is expected to be repaired in the second half of next year. In terms of industry allocation in the financial sector, it is suggested to pay attention to the securities companies with long-term allocation value in the era of equity development, as well as the boom reversal opportunities in the banking and insurance industries after macroeconomic stabilization.
Risk tip: liquidity tightening is higher than expected, economic stall is downward, Sino US friction is intensified, and the epidemic situation is worse than expected.
