This month’s view:
First, the global epidemic broke out again, with new cases reaching record highs. The spread of Omicron variant has brought a more complex pattern to the global epidemic. The number of new cases worldwide has repeatedly reached a new high in the past few days, and the new cases in Europe, Asia, Africa, the United States and even Oceania have increased significantly in a single day. The rapid spread of Omicron variant has brought great challenges to the global epidemic resistance, which may bring great challenges to the global economy The employment market and even the financial market have had a significant impact.
Second, RCEP came into force, ushering in a new chapter in the Asia Pacific Economic and trade pattern. As the world’s largest free trade area, RCEP will bring significant changes to the Asia Pacific Economic and trade pattern in the next few years. The cross complementarity among RCEP member countries is very significant, which will also significantly benefit China’s export-oriented industries. In terms of industry, it is beneficial to textile and clothing, light industry, electromechanical equipment, trade services, ports, shipping and other fields.
Third, the pattern of natural gas shortage in Europe is suspended, but the risk of high inflation still needs to be paid attention to. Although the shortage of natural gas in Europe has been alleviated, the high inflation spreading all over the world continues. Due to the short-term impact of the global epidemic and the long-term support of rising costs under carbon emission reduction, high global inflation may continue for some time, which may lead to the Federal Reserve to accelerate the tightening of monetary policy. We believe that in the short term, the upward trend of inflation will be “high before and low after” in 2022, but the decline may be slight; In the medium and long term, factors such as the reconstruction of global supply chain, the tightening of global labor supply and the rise of global production and living costs under the trend of carbon emission reduction will promote the inflation level to have strong action ability.
Fourth, asset allocation pays more attention to local opportunities under “quasi stagflation”. Globally, the “stagflation like” pattern still continues to evolve. Under this background, the interest rate sensitive bond market may fluctuate violently, and the precious metals significantly affected by the real interest rate are difficult to perform well. Coupled with the impact of the epidemic, the prices of demand sensitive industrial metals, coal, crude oil and natural gas will also be greatly affected. Therefore, in the coming month, the focus of international asset allocation is still “defensive counterattack”, and the defensive assets are not bonds and precious metals with defensive attributes in the traditional sense, but stable assets under the current unique background, mainly the stock markets of economies with relatively low degree of “stagflation like” in the world, Pay special attention to structural opportunities in Japanese and Chinese stock markets.
Fifth, pay attention to the structural opportunities and local commodity opportunities of China and Japan stock markets. In terms of major assets in January, we believe that the Chinese and Japanese stock markets have better opportunities, while commodities focus on local opportunities. Specifically, in the configuration of the Chinese and Japanese stock markets, it is suggested that the Japanese stock market pay more attention to the investment fields related to medical treatment, consumption and fiscal expenditure plans, while Hong Kong stocks pay more attention to the main line of consumption and the absolute leader of the Internet with low valuation supported by the sound background of China’s epidemic management. In terms of bulk commodities, we should pay attention to the overseas “food crisis” and the performance of China’s agricultural and sideline products during the Spring Festival stock period. At the same time, we should continue to pay attention to aluminum, a non-ferrous metal leader benefiting from the trend of carbon emission reduction in the medium and long term.
Risk tips: 1) covid-19 epidemic situation increases the impact; 2) Early contraction of global liquidity; 3) Macroeconomic recovery is less than expected; 4) Overseas market volatility intensified.
