The stock index fell 1.19% this week. How will A-Shares run next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
CITIC strategy: a number of steady growth policies will form a joint force, and A-Shares will gradually stabilize and enter the medium-term upward channel
A shares have returned to the normal driven by fundamentals from emotional driving, and will enter the key period of policy development; In the past two weeks, the epidemic has had a great impact on the economy. The necessity and urgency of the steady growth policy have increased rapidly. A number of policy combinations will be gradually launched and form a joint force; In the second quarter, the economy will gradually repair, and A-Shares will gradually stabilize and enter the medium-term upward channel. First of all, the impact of the current round of China’s epidemic is expected to be mainly concentrated in March to April, which has a great actual impact on the economy, or drag down the year-on-year growth rate of GDP in the first quarter by 0.5 to 1 percentage point. Secondly, the necessity and urgency of the steady growth policy have increased rapidly, and it is expected to be launched twice. The options include: increasing the support of the real estate policy, re launching the total tools of monetary policy, reducing fiscal taxes and fees and accelerating the implementation of expenditure projects, accelerating the formation of physical workload of infrastructure investment, and the implementation of local government relief plans for micro entities. Finally, the peak of external risk impact has passed, the conflict between Russia and Ukraine has become increasingly clear, and the regulatory impact of Hong Kong stocks and China concept stocks will not change the trend of medium-term repair. In terms of configuration, it is suggested to grasp the key window of the secondary force of the steady growth policy, closely follow the relevant main line, focus on the balanced layout of “two low positions”, and meet the resonant upward trend of value and growth in the second quarter.
CICC strategy: be patient in the bottom grinding stage of a shares
Looking forward to the future, we believe that the short-term market may still be repeated, but the more targeted development of the “steady growth” policy may also gradually bring about the improvement of fundamental expectations. The stage similar to the sharp decline in the previous period may have ended, and the market may still be at the bottom stage in the short term. Combined with the recent market adjusted valuation has gradually approached the level of December 2018 and the end of March 2020, we believe that in the medium-term dimension, market opportunities outweigh risks. In the future, if combined with market transactions, it may further shrink to about 700 billion yuan, and other indicators of cooling trading sentiment may be more helpful to judge the emergence of the bottom of the market stage. Focus on the potential turnaround in four aspects in the future: 1) the clear situation in Russia and Ukraine and the easing of global inflationary pressure have brought about the marginal easing of “stagflation”; 2) The “steady growth” policy continues to work, especially in real estate and other fields with more concerns at present; 3) The local epidemic situation in China is further clarified; 4) The marginal stability of China US relations and the relative clarity of China concept shares.
Monarch strategy: the snail shell is used as a ashram, and the short-term is dominated by horizontal shock
From the bottom of the policy to the bottom of the market, do a good job in defense and counterattack, rather than trend counterattack. If measured from the perspective of valuation, the lowest point of this round of Shanghai stock exchange adjustment 302330 is close to the pricing of the pessimistic situation in 2018. Superimposed with the support of the gold stability Council, some investors began to counter attack the trading trend. However, this expectation is likely to fail. From the perspective of current stock pricing, the decline of enterprise profit expectation and the rise of discount rate expectation have not been reversed. Superimposed on the short-term spread of the epidemic and strong control, the bottoming degree of economic growth and enterprise profit and the visibility of the festival have been further reduced. Even with reference to the stock market bottoming out in 2018, after the decision-makers shouted to stabilize the morale on October 19, 2018, the trading of A-Shares at the end of the year was still difficult. Until mid January 2019, the emergence of Tianliang social finance changed investors’ pessimistic expectations of fundamentals and credit easing, and the trading trend began to reverse. From a strategic point of view, spring will eventually come, and we should also be ready for the coming spring. However, the premise is that investors still need to defend and wait until the demand side policies and fundamental expectations are clear.
China Securities Co.Ltd(601066) strategy: from strategic defense to strategic stalemate
Looking back on history, it is found that the Shanghai stock index has fallen for five weeks or more, and there have been 17 times since 2005. The previous 16 times have rebounded with a probability of 62.5%, a bottom probability of 37.5%, a rebound probability of 83% and a bottom probability of 17% since 2016. Therefore, we believe that after the rapid release of pessimistic expectations such as economic downward pressure, inflation pressure and liquidity tightening pressure in the early market, the index level is expected to usher in a medium – and short-term rebound. Looking forward to the future, the A-share market in April is expected to return to the logic of policy expectation from obvious policy disappointment. This is mainly because the epidemic has caused obvious damage to China’s economy in March and the following April. Consumption, travel, logistics and production are all affected. The poor structure of new credit also suggests that the economic recovery is not stable. In order to cope with the current downward pressure on the economy, China’s policies still need to “focus on me”. A new round of loose and stable growth policies is imperative. The market will have greater expectations for the Politburo meeting in late April.
National sea strategy: how to deduce from the bottom of policy to the bottom of market?
The cycle of “policy bottom – market bottom – economic bottom” of A-Shares has a clear characteristic. The market bottom generally lags behind the policy bottom for about 1-3 months. The initial effect of policy force has led to the transformation of market expectations for the future economy from pessimism to optimism. The economic bottom generally lags behind the policy bottom for about 3-6 months, indicating that the negative factors that suppressed the market in the early stage have been fundamentally mitigated, and then A-Shares began to stabilize and recover from the bottom. The main reason for investors’ lack of confidence in the market at the end of 2008 is that the market is weak at the end of the previous year. In 2012, the policy bottom basically coincided with the economic bottom, while the market bottom appeared only after a lag of two months. In the absence of unconventional stimulus policies, the emotional disturbance was the main reason for the market to fall again after the rebound. The market end in 20152016 lagged behind the policy end for about five months. The current round of decline was dominated by the design defects of the “circuit breaker” mechanism, the pressure of exchange rate depreciation and the instability of economic repair expectations. From the end of the policy to the end of the economy in 2018, it lasted 54 trading days. During this period, the broad-based index fluctuated to the bottom, and the market sentiment remained weak against the background that the performance of the third quarterly report was lower than expected. With the phased stabilization of the economy in early 2019, the market sentiment was repaired, and the market and economy bottomed out simultaneously. During the period from the end of 2020 to the end of 2020, the Federal Reserve’s policy continued to stimulate the orderly resumption of production, which was synchronized with the 36 days of market panic.
Guosheng strategy: what is the law of the market during the window period of quarterly report without decision in April
Under the spread of the epidemic, the demand in the slightly improved peak season fell back again, and some high-frequency data fell to historical lows. Since March, the spread of a new round of epidemic in China has had an obvious negative impact on the commencement and resumption of production in the peak season; At the same time, the front-end sales of real estate also did not improve, and the sales and land transactions broke the previous low again. Historically, the so-called “April decision” was based on the completion of important meetings, the disclosure of the performance of listed companies and the timely landing of peak season economic data. However, due to the disturbance of the current epidemic, the demand in peak season was delayed, which also led to the decision window being pushed back again. Referring to the post epidemic recovery process in the second and third quarters of 2020, the middle and later stages of the second quarter are an important observation window. If the current round of epidemic spread can be effectively controlled in early April, the transmission from the bottom of credit to the bottom of economy is expected to be realized in the middle and later stages of the second quarter.
Xingzheng strategy: what are the potential exceeding expectations and risk points in the second quarter?
“Policy bottom” + “market bottom” has emerged.
On the one hand, with the significant release of the fear of conflict between Russia and Ukraine and the “boot landing” of the Federal Reserve’s interest rate hike in March, the time when there were the most “single moths” in the overseas market and the strongest risk aversion of investors has passed. On the other hand, the direction of China’s policy relaxation is clear. The financial committee meeting has given a clear deployment to “suit the remedy to the case” for the problems most concerned by the market, such as the sharp decline of a shares, the regulatory conflict of China concept shares, the sharp decline of Hong Kong shares, Internet regulation and so on. In the case of probability, the market will enter a window of index shock consolidation and gradual restoration of investor sentiment. Investment strategy: “small high tech” + “big finance” and “dumbbell” configuration: on the one hand, in the adjustment of medicine, computer and “new half army”, find the target that meets the characteristics of “small high tech” from bottom to top; On the other hand, focus on the financial, real estate, new and old infrastructure and other sectors that benefit from the expectation of “steady growth”. In the long term, we will continue to focus on the five major directions of scientific and technological innovation.
Western strategy: what will be the impact on the market if the overseas epidemic repeats again
The overseas epidemic still has repeated risks, and the overall market impact is limited, but it is expected to grow structurally. Since March this year, with the continuous liberalization of overseas epidemic prevention measures, the recent ba With the spread of 2 variants, the overseas epidemic showed signs of rebound, with an average of nearly 1.6 million new confirmed cases worldwide on the 7th. In the past two years, overseas epidemics often show the characteristics of periodic recurrence during the western traditional holidays. With the approach of the Easter holiday in April, the probability of a new wave of epidemics overseas in the future is rising significantly. We reviewed the impact of the overseas epidemic on US stocks in 2020. On the whole, the impact of the epidemic on the stock market showed a gradual weakening trend. During the first three outbreaks in June 2020, September 2020 and July 2021, the growth sectors of Chinese and American stocks and A-Shares significantly outperformed the value sectors, while the epidemic was not the core concern of the market when the epidemic recurred for the fourth time in November 2021. From the current point of view, the growth sector of China and the United States still has high linkage. If the overseas epidemic repeats in the future, it will lead to the correction of economic and liquidity expectations, which is expected to boost the sentiment of the A-share growth sector.
Cinda strategy: under what circumstances will V-reversal occur?
Generally, the bear market of A-Shares has lasted for a long time in history, but there have also been V-shaped reversals after a short bear market (decline 20% in the quarter), such as Q4 in 2009, the second half of 2010 and the second half of 2013. After major adjustment in the quarter, there are two conditions for V-shaped reversal: (1) the performance will continue to exceed expectations in the next six months; (2) Extremely low valuation + extremely loose policy. We believe that the first condition is difficult to appear within the year, and the second condition may appear at the end of the second quarter or the third quarter. If we refer to the experience of U.S. stocks, the V-shaped reversal only needs the easing of monetary policy again, which is an upward risk that needs to be highly valued, which is very different from the history of a shares. In the short term, the rebound in the previous two weeks has gone too fast in space and not yet in time, so it may be necessary to let space wait for time. The core driving force of the rebound is “oversold rebound + policy stability expectation + re correction of the matching degree of valuation and performance before and after the quarterly report”. The first and second driving forces have been fulfilled a lot, and there is still room for the third driving force. With the gradual disclosure of the first quarterly report in early April, it is possible to extend the rebound time to mid April. Strategically, 2022 will be a compressed version of 20182019, with the first half similar to 2018 and the second half similar to 2019.
Livelihood Strategy: layout until the end of inflation
Under the supply shock, when the end of the supply curve is approximately vertical, the price will rise until there is no demand to undertake. A better way to measure how much demand has been “killed” by the price level is to observe the profit distribution of the industrial chain, rather than simply think that there will be no inflation without demand growth: when the middle and lower profits are compressed to a certain extreme value by the upstream, enough individuals will stop production, Compress the demand for upstream to reverse the supply-demand gap. What we first found is that even at a time when US inflation is so high, there is still profit space in the middle and lower reaches that has not been “swallowed up” by the upstream – the proportion of upstream profits reached 38.2% in the 1970s, while the average proportion of upstream industry profits in 2021 was only 15.4%; Second, as far as China is concerned, the proportion of upstream profits has begun to rise since the third quarter of 2020, but the current proportion of upstream profits only slightly exceeds the pre epidemic level, and there is a big gap between the upstream / downstream and upstream / midstream profit ratios relative to the historical maximum. From the perspective of market pricing: at present, the relative Pb valuation multiple of the upstream relative to the downstream has only reached the level of the third quarter of 2019, which has not reached the level of the supply side reform in 20162017. At this time, what is implied is the expectation that the future profitability of the fields dominated by middle and downstream growth stocks can be continuously maintained and improved, which obviously does not meet the certain price standard of “killing demand”. The most unprepared for “commodity” pricing may be the demand sensitive industries in the middle and lower reaches. At present, the new variable is that policymakers in various countries support the downstream in tax relief and financial subsidies, which essentially increases the sustainability of upstream profits.
