Summary of this week and configuration suggestions for next week
The epidemic situation in the United States and Europe continues to deteriorate, but Omicron has limited impact on the market. The epidemic situation in Europe and the United States continued to deteriorate this week, with more than 500000 new cases diagnosed in the United States in a single day, a new high since the epidemic. The number of newly confirmed cases in France and Britain also hit a record high. Even though the number of Omicron cases in various countries increased sharply, many governments did not introduce new restrictive measures, and the news about new vaccine research and development and mild symptoms of Omicron cases boosted the market risk appetite. On the other hand, the number of initial claims for unemployment benefits in the United States decreased last week, indicating that the epidemic has not yet had an impact on employment. The cooling of market risk aversion this week put pressure on the US dollar, which fell 0.5% to 95.65, breaking the low point of the month. Most non-U.S. currencies rose, while the euro rose 0.48% against the dollar to 1.1327. Sterling rose 1.04% to 1.3444 against the US dollar this week, a new high since mid November. The British government said it would not implement further epidemic prevention restrictions before the end of the year. The yen closed lower against the US dollar for the fourth consecutive week as market risk aversion cooled. In the stock market, the three major U.S. stock indexes rose and fell. The S & P 500 and the Dow index rose this week and once hit an all-time high. The NASDAQ rose and fell for four consecutive days. In terms of commodities, the fall of the US dollar helped the international gold price rise for the third consecutive week. Comex gold futures rose 1.04% to US $1830.5/oz, down 3.41% for the whole year. The impact of the epidemic on the demand for crude oil has eased. The international oil price rebounded for the second consecutive week, hitting a new high since late November. The contract of us oil in February 2022 was reported at US $75.45/barrel, with a cumulative increase of 55.50% for the whole year.
“Ensuring supply and stabilizing prices” continued to work, and the price index fell significantly. China’s official manufacturing PMI recorded 50.3 in December, and the boom level rebounded for two consecutive months. The production index in November was 51.4, down 0.6 percentage points from the previous month, but higher than the critical point, reflecting the continued growth of manufacturing production. The new order index rebounded for two consecutive months, reflecting the accelerated release of market demand. The implementation of policies such as “ensuring supply and stabilizing price” has been strengthened, and the price index continues to fall. The purchase price index and ex factory price index of main raw materials are 4.8 and 3.4 percentage points lower than last month, both falling to the low point since May 2020, and the upstream cost pressure has been further relieved. In addition, the operation of large and medium-sized enterprises is generally stable, the prosperity of small enterprises is weak, and the job market is still under pressure. In terms of corporate profits, the profit growth rate of China’s Industrial Enterprises above designated size decreased year-on-year in November, but the overall growth rate is still fast. As the prices of some bulk commodities fell, the profits of upstream industries such as mining and raw materials weakened, and the profit differentiation between upstream and downstream eased. In addition, the decline of automobile and general equipment industries was narrowed driven by factors such as alleviating the shortage of chips and improving market demand. On the whole, corporate profits have maintained rapid growth and the industry balance has improved, but the cost pressure is still large, and the improvement of downstream industry profits needs to be further consolidated.
This week, the Central Bank of China invested a net 530 billion yuan in the open market. In terms of policy, the central bank working meeting stressed that the prudent monetary policy in 2022 should be flexible and appropriate. We will make comprehensive use of a variety of monetary policy tools to maintain reasonable and sufficient liquidity, enhance the stability of the growth of total credit, increase support for the real economy, and keep the growth rate of money supply and social financing scale basically matching that of the real economy. We will improve the formation and transmission mechanism of market-oriented interest rates, promote the steady decline of comprehensive financing costs of enterprises, and continue to transfer profits from the financial system to the real economy. In the capital market, the main market indexes rebounded this week. The recovery of market sentiment on Thursday and Friday boosted the weekly increase. Overall, the market trend is relatively tangled, with strong upward resistance. The Shanghai index fell back to the shock platform before the pressure level of 3700, and the gem index showed a bottom rebound signal after falling below the half year line last week.
