Market pessimism comes from real estate and credit carriers
Pessimism towards real estate and credit carriers is an important reason for the pessimistic economic expectation in the current market. From both sides of the supply and demand of real estate, first, the market believes that the willingness of residents to buy houses under the background of "real estate is not fried", and second, the willingness of private real estate enterprises to take land is declining. From the perspective of credit carrier, wide credit used to rely on real estate investment, but now the market follows the old logic and can not find a credit carrier, resulting in pessimistic expectations for the economy. However, we believe that under the two supporting factors of the acceleration of affordable housing construction this year and the loosening of mortgage loans in the first quarter, real estate investment is not pessimistic, and the probability will not drag down economic growth.
The medium and long-term credit signal of PMI leading enterprises has appeared
In November and mid December, the PMI of the mining and manufacturing industry rebounded continuously, and the forward-looking signals of economic recovery and policy support have appeared, indicating that the medium and long-term credit of enterprises is expected to increase in the first quarter of 2022. On the one hand, at present, China's industrial capacity utilization is relatively full, and the recovery of new orders often drives the upward willingness of manufacturing enterprises to spend capital; On the other hand, under the background of carbon neutrality, the willingness of enterprises to reduce carbon + the strength of central bank policy tools, and the demand for enterprise technological transformation investment will also drive the recovery of credit growth.
The currency multiplier did not decline, indicating that the bank's willingness to lend did not decline
As of November 2021, China's currency multiplier was 7.41, which was in the highest position range and significantly higher than that of major developed economies. In November 2021, the currency multipliers of the United States and Japan were only 3.35 and 1.78 respectively. The high money multiplier indicates that banks have a strong willingness to extend credit. The core crux of the low money multiplier in European and American developed economies lies in banks' lack of confidence in the real economy and low willingness to extend credit. The high currency multiplier also means that the economy is highly dependent on the leverage level. In the wide credit environment, the positive pull of credit release on the economy is stronger, which is conducive to the rapid stabilization of the economy in the short term. The typical period is from the end of 2018 to the beginning of 2019; On the contrary, once the credit shrinks and the willingness of commercial banks to lend is reduced, the monetary multiplier will decline rapidly, and the negative impact on the economy will be greater, just as in the second quarter of 2019. From the perspective of China's current monetary multiplier, the policy has a good effect on stabilizing the total amount of credit, and the willingness of banks to extend credit to the real sector has not decreased. We continue to emphasize that the amount of credit and social finance in the first quarter of 2022 is "a good start". It is expected that the credit and social finance in the first quarter will increase by 8.5 trillion and 11.6 trillion, both of which are historical peaks, It firmly suggests that the central bank will "launch four arrows" to broaden credit in the first quarter of 2022, that is, credit in four areas is expected to be large-scale: manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans. The total amount of credit will not only rise, but also the structure will be optimized, so as to stimulate economic repair and rise.
Local governments have a strong desire to make a good start
The central economic work conference set the tone of "steady growth" and required "all regions and departments to shoulder the responsibility of stabilizing the macro economy". Local governments responded positively. More than 10 provinces, including Beijing, Qinghai, Inner Mongolia, Xinjiang, Zhejiang, Shaanxi, Hubei and Hebei, made it clear that they should achieve a good start to the economy in 2022 and implement steady growth. All localities actively promoted the commencement and construction of major projects, including Anhui Qinghai, Zhejiang, Shanghai and other provinces and cities have deployed the centralized commencement of major projects in the first quarter of 2022, which is expected to drive the recovery of investment, especially in new and old infrastructure, high-tech manufacturing, affordable housing and other fields.
In the first quarter, we should pay attention to the local two sessions, credit and social finance data
We believe that under the background of steady growth, we need to pay attention to the rhythm and strength of the policy portfolio, focusing on the government work report issued after the local two sessions. It is expected that the manufacturing industry will return to the leading force, and the growth target of fixed asset investment is likely to exceed expectations. At the same time, we remind to pay attention to the financial statistics released by the central bank in early February and early March. The probability of social financing and credit data is higher than market expectations. We judge that in the first quarter, credit in the four fields of manufacturing, carbon reduction, infrastructure and personal mortgage will be increased simultaneously, and the new scale of social finance in the current quarter will exceed the historical peak.
Under the background of steady growth, Q1 stock market grasps the structural market, and bonds are vigilant against the rise of long-term interest rates
There are outstanding structural opportunities in the stock market. First, the financial sector, especially the banking sector, may have outstanding performance, mainly benefiting from the growth of banking business driven by Q1 day credit; Second, the real estate and related sectors in the subsequent cycle may benefit from the real estate investment exceeding expectations under the background of "simultaneous rent and purchase"; Third, the field of building materials related to infrastructure may benefit from the advance of Q1 infrastructure projects. In addition, it will also benefit from the higher than expected real estate investment. In terms of interest rate bonds, Q1 wide credit will gradually promote the yield of 10-year Treasury bonds to rise to 3.2%. Even if the policy interest rate adopts a small interest rate cut, it is also a steep yield curve in the short end downward and long end upward.
Risk tip: the uncertainty of covid-19 virus epidemic has increased, which has an uncontrollable negative impact on the economy and credit release in the first quarter.
