Market: obvious V-shaped rebound
The market fluctuated greatly this week, with a V-shaped rebound. From March 14 to 15, major broad-based, style and industry indexes fell sharply. On March 15, when the market retreated sharply, we released the “battle against backwater” and firmly bullish: believed that the liquidity shock would eventually pass. Focusing on the “resilience” of economic data does not necessarily mean that the “steady growth” policy does not need to be strengthened. The policy space implied by China’s low inflation level is the cornerstone of optimism about the future market then, with the convening of the special meeting of the Finance Committee on March 16, we issued “chasing after victory” and advised investors to continue to rebound. Major broad-based, style and industry indexes rose sharply on and after March 16. In the follow-up, with the release of policy risks at home and abroad, the moment of the greatest impact may pass, and the bottom of the market based on short-term pessimism has been confirmed.
rebound will continue, but we should face up to the pressure and turn to step-by-step
The valuation implies the expectation of the whole market for the future. Statically, if the degree of market pessimism will not exceed March 2020, then 3014 is the bottom of short-term sentiment. From the perspective of the whole year, if the extreme assumption is that the rate of return from 2019 to 2022 returns to ROE (the valuation expansion since 2019 is 0), the expected rate of return of the main broad-based indexes (except GEM) to the end of the year is positive of course, the above expected rate of return shows that there is no valuation pressure in the whole market, and the future change of fundamentals is still the key what deserves more attention at present is that according to our calculated data, the past decline will still cause structural pressure on the future rebound of the market: (1) from the perspective of northbound funds although it has turned into inflow as a whole, it is mainly trading funds hosted in foreign securities companies. (2) With the sharp rebound of the market, on March 17-18, our debt side proxy variable – group ETF application and redemption instructed individuals and institutions to start redemption . (3) China fixed income + fund currently faces great stop loss pressure, according to our calculation, the scale of net income in the high redemption probability range (- 2% and above) is 1433.8 billion yuan, while 2021q4 shows that 15.71% is equity, and the main heavy positions are food and beverage, Dianxin, electronics and banking. (4) fixed opening fund is facing the peak of opening. The corresponding opening scale in April was 43.6 billion yuan, and the main positions are concentrated in electronics, Dianxin and food and beverage. After the market enters a reasonable range, the trading pressure faced by some sectors in the future rebound is obvious, and it needs “wisdom” to judge when to end.
grasp the main line of certainty: when supply is cleared and demand is restored
We believe that the more clear and long-term main line in the future is: (1) for overseas countries, the inflationary pressure will continue, because behind this is not only driven by the supply and demand gap (the recovery of oil and gas production capacity is very slow and the copper and aluminum inventory is at a historical low), but also driven by the rebalancing of financial assets and physical assets under long-term inflation expectations (the proportion of US financial assets is at a historical high), About 15% of the increase in the nominal price of goods may be caused by the contradiction between supply and demand. (2) For China, when the market’s expectation of steady growth bottoms out after the “data dispute” and “policy stability maintenance”, for upstream industries facing overseas price shocks and obvious supply bottlenecks, the recovery of demand will bring greater price elasticity: a supporting evidence is that even under the background of continuous downward demand in 2021, the center of Nanhua industrial products index is still moving upward. Of course, we should finally pay attention to the future constraints of upward inflation on steady growth. (3) we also need to pay attention to some areas in the past economic downturn clearing: industry concentration in the industry in the downward cycle of continuous improvement: 2016 years later, Baijiu and appliance market investors should be inspired: when the economic recovery began, the most beneficial industry is in the previous downlink cycle of industry supply to clear or concentration of the field of ascension. This round of real estate has the above characteristics.
good at fighting, no wisdom, no courage
The rebound of the market will continue, but for growth stocks, it undoubtedly needs more “wisdom” to judge the struggle between trading pressure and emotional repair. Steady growth is still being promoted, but blindly believe that the strength is higher than expected. It also takes courage to buy the middle and lower reaches sectors that rely on the elasticity of economic aggregate in the past “Pro cyclical” experience. Investors should be better than Yi Sheng: (1) under the main line of inflation: copper, aluminum, gold, coal, oil and gas, oil transportation . (2) Under the main line of demand recovery, we should also look for industries whose supply has been cleared in the previous downward cycle: real estate , and the layout of ideas from structural expansion: bank (local, county and township), construction .
risk warning : inflation is lower than expected; The economic downturn exceeded expectations; Russia Ukraine conflict and liquidity impact exceeded expectations.
