Market review: the meeting of the financial stability Committee boosted market confidence, and the Shanghai and Shenzhen indexes rose after falling
In terms of the market, in the past five trading days, wandequan a index came out of the "V" market, with a cumulative decline of 1.31%. The market turnover was higher than that of last week, with a total net outflow of 16.692 billion yuan this week. In the past five trading days, real estate, non bank finance, medicine, biology and social services led the increase, while steel, public utilities, environmental protection, coal and food and beverage led the decline.
The macroeconomic data from January to February exceeded expectations, and the sustainability of economic stabilization remains to be seen
According to the data released by the National Bureau of statistics on March 15, from January to February, the added value of industries above designated size increased by 7.5% year-on-year, 3.2 percentage points faster than December 2021 and 1.4 percentage points faster than the average growth rate of two years in 2021. The national service industry production index increased by 4.2% year-on-year, 1.2 percentage points higher than that in December 2021, and 1.8 percentage points lower than the average growth rate of two years in 2021. The total retail sales of social consumer goods reached 7442.6 billion yuan, a year-on-year increase of 6.7%, 5.0 percentage points higher than that in December 2021 and 2.8 percentage points higher than the average growth rate in the two years of 2021. The growth rate of farmers' fixed assets was 76.1% year-on-year (excluding 2021.3%) in 2022, up by an average of 12.3 percentage points over 2021. The national consumer price (CPI) rose by 0.9% year-on-year. On a monthly basis, the national consumer price rose by 0.9% year-on-year in January and February, up 0.4% and 0.6% month on month respectively. On the whole, driven by the consumption of the Spring Festival and the Winter Olympics, the economic data from January to February have obviously warmed up and sent a certain positive signal. However, it can not be ignored that it accounts for a relatively small proportion of the total annual economy and is vulnerable to short-term factors. In the face of multiple pressures outside China and the repeated impact of China's epidemic situation, the considerable progress of economic recovery remains to be seen.
The "boots" of the Fed's interest rate hike have landed, and the pressure of international high inflation can still not be underestimated
On March 16 local time, the Federal Open Market Committee (FOMC) of the Federal Reserve issued a policy statement announcing that it would raise the benchmark interest rate by 25 basis points to the range of 0.25% - 0.5%. This is the first interest rate increase since December 2018, in line with market expectations. Compared with the last statement, the Fed added that energy prices and the Ukrainian crisis may cause additional upward pressure on inflation in the short term, or the May meeting may begin to shrink. Federal Reserve Chairman Powell said that it is appropriate to continue to raise interest rates. Inflation is still far higher than the target and the high time is longer than expected. It is expected to raise interest rates seven times this year, and shrinking the table is equivalent to an additional interest rate increase. Overall, in the face of the dual pressure of downward economic growth and continuous upward prices, controlling inflation is still the primary task of the Federal Reserve. This meeting also made the tightening trend of the world's developed central banks clearer, and the overseas liquidity tightening cycle officially opened. For China, under the background of the current reverse policy cycle between China and the United States, the interest rate increase will gradually narrow China's policy window, but it will not restrict the loose space of China's monetary policy, especially the macro liquidity support in the short term.
The central bank continued to make MLF at parity, and the financial commission of the State Council took action to stabilize market confidence
The central bank announced on March 15 that in order to maintain the reasonable and abundant liquidity of the banking system, it carried out 200 billion yuan one-year MLF operation and 10 billion yuan seven-day reverse repurchase operation, and the bid winning interest rates were 2.85% and 2.1% respectively, which were the same as the previous period. The continuation of the MLF parity made the expectation of interest rate reduction frustrated, which once again impacted the fragile market sentiment and made the depth of the A-share market go down on that day. On March 16, the meeting of the financial committee of the State Council once again clarified the tone of steady economic growth, and responded to the recent monetary and credit support of market comparison, real estate risks, medium concept shares and platform economic supervision. The meeting made it clear that the macroeconomic policy will still put "stable growth" in a more prominent position, and made it clear that the monetary policy will remain relatively loose. Therefore, there is still room for reducing reserve requirements and interest rates. At the same time, the meeting injected a "booster shot" into the capital market and effectively boosted market confidence. On the whole, it is expected that the government will further strengthen its policy support in the future, and the market supervision may be slightly relaxed. China's policy environment is better as a whole.
Zhou Du's view: market sentiment stabilizes and pays attention to sector repair opportunities
At the macroeconomic level, a variety of negative factors have been exhausted this week, and China's macroeconomic environment is expected to maintain a better level in the short term. First, the "boots" of the Fed's interest rate hike have finally landed, opening a long way for overseas liquidity recovery. However, the rate hike is "Dove" relative to market expectations, so it has a certain soothing effect on market sentiment. Previously, the market generally expected that the Federal Reserve would raise interest rates by 25-50bp in March, and the final announcement of the rate increase of 25bp was the lowest expected by the market. At the same time, under the background of obvious structural problems of the U.S. and China's economy and high asset prices, the Federal Reserve had a relatively full communication with the market before raising interest rates, which was reflected in asset prices. Therefore, the final announcement of the rate increase resolution did not have an impact on the market, On the contrary, the relatively small rate increase boosted the overall performance of the capital market. Second, China's policy has further confirmed that it will continue to increase easing. Previously, the Fed's interest rate hike, imported inflation pressure and other factors made the market have some differences on the direction of China's future policy adjustment, and the continuation of MLF parity further exacerbated concerns. Later, the meeting of the financial stability Commission and the announcements of various ministries and commissions once again confirmed the policy's determination to "stabilize growth" and injected a "booster" into the capital market. Follow up suggestions continue to pay attention to the introduction of relevant favorable policies in real estate, infrastructure and consumption.
In terms of the market, the A-share market rose again after a deep decline this week. Affected by the deterioration of China's epidemic situation and tight micro liquidity on Monday and Tuesday, panic was concentrated and released, driving the deep decline of the index. Since then, the meeting of the financial stability Committee has effectively boosted market confidence and led to an exponential rebound. The market closed up for three consecutive days, and the north capital ended the net outflow trend for many consecutive days. The admission was accelerated on Thursday and Friday, and the real estate, infrastructure, digital economy, medicine, tourism and other sectors returned to restlessness and ushered in a strong repair.
At present, the A-share market is experiencing a relatively obvious period of emotional warming. After the short-term negative factors are basically exhausted, China's macro policy support makes the A-share market with historically low valuation expected to usher in an oversold rebound. Of course, the uncertainty factors are especially important. We need to focus on the follow-up development of the Russian Ukrainian conflict and the impact of the Federal Reserve's interest rate hike process on the global financial environment, especially in emerging market countries, Prevent its Risk Spillover from impacting the Chinese market. On the whole, the bottom of the market is gradually emerging. It is suggested to pay attention to the better allocation opportunities formed in the previous sharp correction, focus on the market value and growth style of the market, and continue to pay attention to the real estate, building materials and other sectors that are expected to see the improvement of the prosperity margin of the industry under the continuous overweight of "steady growth", as well as the high-quality targets of new energy, traditional Chinese medicine, semiconductor, national defense and military industry and other sectors with thickened safety margin and good prosperity in the near future.
In terms of industry, (1) pay attention to the real estate sector. At present, the real estate market has begun to gradually release the expected repair signal. Under the strong determination of "stable growth", the policy direction of "housing without speculation" will still be adhered to. However, the important position of the real estate market in the national economy can not be underestimated. All localities are also issuing favorable policies for the real estate market one after another, and the "implementation of policies for cities" has been gradually implemented. At present, the valuation level of the real estate sector is at an absolute low in history, Superimposed on the improvement of industry prosperity, it is expected to strengthen, or there will be reversal repair. It is suggested to focus on high-quality local real estate enterprises with relatively healthy balance sheet. (2) Focus on the pharmaceutical sector. The valuation level of the pharmaceutical sector is in a reasonable range. The recent resurgence of the epidemic in China may lead to the resurgence of covid-19 special drugs, traditional Chinese medicine and other sectors. It is suggested to focus on it. (3) Pay attention to the social service sector. This week, the health commission revised the covid-19 diagnosis and treatment plan, which led to a massive counterattack in the concept sectors such as tourism and travel. We believe that the current "dynamic clearing" policy of epidemic prevention in China will continue, but will also place more emphasis on "accurate prevention and control" to minimize the severe impact of the epidemic on China's economy. Therefore, the social service sector previously suppressed by the epidemic is expected to usher in a reversal opportunity, but we also emphasize that, At present, the epidemic situation in some parts of China is still serious, and the transportation and travel are still limited. It is suggested to lengthen the cycle, pay close attention to the marginal changes of micro data and the development of epidemic situation in China, and choose the right time for configuration.
Medium and long term strategy
In the medium and long term, we suggest investors continue to focus on three directions. Consumption sector: medicine and consumption upgrading. Long term high-quality track: carbon neutralization, scientific and technological innovation and new infrastructure. Stable bottom position variety: big finance.
Risk tips
Global liquidity tightened more than expected; The global epidemic has developed beyond expectations; The macroeconomic growth rate fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
