Key investment points:
I. overseas markets: the Fed’s interest rate hike boots are on the ground, and controlling inflation is still the main task. In March, the Federal Reserve raised interest rates by 25bp, which is in line with market expectations. It is expected to announce the table reduction plan in May. Powell further said that it is appropriate to continue to raise interest rates, and if necessary, the Federal Reserve may speed up its tightening policy. At present, the inflation rate in the United States is still much higher than the long-term target of 2%, and the soaring energy prices in Ukraine have brought more upward pressure on inflation. According to the data released by the US Department of labor, in February, the US CPI increased by 7.9% year-on-year, the PPI increased by 10% year-on-year, and the prices of energy, housing and food all rose sharply. The rise in energy prices after the conflict between Russia and Ukraine has not been reflected in the data. In March, US inflation is still possible to exceed expectations, and controlling inflation is still the main task of the Federal Reserve.
II. The combination of policies stabilized the capital market and significantly boosted market risk appetite. On March 16, the Finance Committee of the State Council held a special meeting, which addressed the reasons for the current market hesitation and even continuous sharp decline, and gave a clear tone, “timely response to the hot issues concerned by the market”. The meeting mentioned that “any policy that has a significant impact on the capital market should be coordinated with the financial management department in advance, maintain the stability and consistency of policy expectations, and be accountable when necessary”, It will contribute to the implementation of subsequent policies to stabilize the capital market.
III. economic data exceeded expectations, but broad monetary policy and steady growth are still the main line of current policies. The economic data from January to February exceeded market expectations, and the MLF interest rate cut failed on March 15, which increased the market’s concern about the uncertainty of future policies. Considering the restriction on consumption caused by the recent rebound of China’s local epidemic, the rise of global commodity prices may have a restraining effect on industrial production, follow-up policies still need to take the initiative to deal with it. The statements made at the meetings of the financial committee of the State Council and the central bank showed that monetary easing and steady growth are still the main lines of China’s current policies. At present, China’s inflation pressure is small, and the monetary policy is still in the pattern of “overseas tightening and China loosening”. It is expected that there is still room for China to reduce reserve requirements and interest rates in the future.
IV. investment strategy: after the “policy bottom” is proved, A-Shares are expected to continue the “oversold” rebound. Since the beginning of this year, the market has continued to decline, due to the interference caused by the deterioration of the external geographical environment, the instability of China’s macro policy expectations, the abnormal fluctuation of China concept shares, the reflection of Internet platforms and real estate problems in the capital market and other factors. Recently, the financial commission of the State Council, the “one bank, two sessions”, the foreign exchange administration held a meeting, the postponement of the real estate tax, and then the video call between the heads of state of China and the United States, the pessimistic expectations of the market have been repaired, and the Shanghai index is near Wuxi Boton Technology Co.Ltd(300031) 00 points or a relatively solid bottom. Under the monetary policy pattern of “external tightening and internal loosening”, there is still room for China to cut reserve requirements and interest rates, and A-Shares are expected to continue the “oversold” rebound. How far this round of market goes depends on multiple factors: on the one hand, the strength and sustainability of China’s care policy; On the other hand, we should pay attention to peripheral factors such as the pace of the Fed’s table contraction and geographical relations. In terms of industry allocation, pay attention to three main investment lines: first, the marginal relaxation of benefit policies, such as “banking and real estate”; Second, “agriculture and gold” benefiting from inflation expectations; Third, the theme of policy (support) promotion is related to “new energy (photovoltaic, energy storage), semiconductors, counting from the east to the west”, etc.
Risk warning: geo risk escalation; The policy strength is less than expected; Repeated outbreaks outside China; Large fluctuations in overseas markets, etc.
