Introduction: the new cases of the epidemic in the mainland are on the rise and are still controllable. The Fed started the interest rate hike cycle, and the term interest rate spread is close to upside down. China's economy is located in the transitional stage of reverse cycle regulation in stage 1 of the Pringle cycle and recovery in stage 2. It is stable first and then formed. Sanctions against Russia continued to fall, grasping the two clues of Russia Ukraine event catalysis and long-term domestic substitution.
The number of new cases in the mainland is on the rise, but it is still controllable. 1) Current epidemic situation: the world is in the falling stage of the peak of the fourth wave of epidemic. In China, the epidemic in Hong Kong has been controlled to a certain extent, and the mainland is still in the rising stage; 2) Judging from the current situation, the epidemic is still controllable. One is to refer to the experience of overseas epidemic development (Germany, France, the United States, etc.): there is usually only one wave of epidemic interpretation, and the rise of new cases from the beginning to the peak is often about one month; Second, at present, China has taken relatively strict epidemic prevention measures to limit personnel mobility, and continues to adhere to the dynamic clearing strategy. The epidemic rate may be effectively controlled in early April; 3) Under the impact of the epidemic, consumption has worsened, the downward pressure on the economy has increased, the steady growth policy is expected to continue to increase, and the high dividend strategy will still be deduced; In addition, specific drugs are written into the diagnosis and treatment plan, which will benefit specific drugs, CXO and other segments; With the current round of the epidemic under control, the isolation conditions of the new diagnosis and treatment plan will be lifted and relaxed, and the stimulus policies for relevant consumption are also worth looking forward to. Travel will be gradually normalized, and the transportation and social services with reversal of difficulties will also benefit.
The Fed started the interest rate hike cycle, and the term interest rate spread is close to upside down. 1) Looking back on history, the most deterministic asset price direction in the US interest rate hike cycle is the weakening of the term spread of US bonds, which is often the leading signal of economic weakness. The economy has weakened in five rounds of interest rate hikes since the 1990s, including four recessions. 2) Starting from November 2021, Powell was re elected as chairman of the Federal Reserve and deleted the "temporary theory of inflation". The two-year interest rate began to accelerate upward. At present, the interest rate difference between 10 and 2 years is only 20bp; In addition, the three-month US bond interest rate and policy interest rate tend to fit together. This time, the 2-year-3-month interest rate spread has been at an all-time high, which also means that the tightening expectation of the current market is relatively full; 3) The interest rate hike has little impact on the valuation of US stocks. The valuation of Chinese and American stocks did not fall sharply in the several interest rate increase cycles after the 1980s. Moreover, at the index level, since the profits are generally upward in the interest rate increase cycle, the price performance is usually better than the valuation. Compared with raising interest rates, the recession has a greater impact on US stocks. In addition, the current focus of the US stock market may already be fighting inflation. 4) The US interest rate increase / reduction cycle will have a certain impact on China and the global liquidity environment, but the short-term interest rate trend of other countries is not completely synchronized with that of the United States. China's monetary policy has certain independence. For the Chinese market, it needs to be judged in combination with economic fundamentals and policy environment. At present, China's economy is in the transitional stage of reverse cycle regulation in stage 1 of the Pringle cycle and recovery in stage 2. It is stable first and then mature. Equity risk premium has guiding significance for the allocation value of a shares. As of March 25, the ERP calculated by the 10-year CDB bond was 6.73%, which was at a high level since 2015, close to the end of 2018 and the end of February 2020. The value of A-share allocation is prominent.
The net outflow from the North exceeds 10 billion, and the capital demand has not improved. The net outflow of funds from the north this week was - 12.8 billion yuan, narrowed again compared with - 36.3 billion yuan and - 16.7 billion yuan in the previous two weeks, but the absolute outflow level was still high, with a cumulative net outflow of more than 60 billion yuan for three consecutive weeks; The overall net inflow of Liangrong increased slightly to 7.30% of the total a transaction volume under the background of the overall contraction of the market. In the direction of the industry, the two major capital entities showed a certain net inflow under the condition of significant correction of power equipment this week, and the rest did not have a consensus to be optimistic about the industry; Among the top five industries with net outflow, non bank finance suffered a net outflow from the north and the two financial institutions, while food and beverage suffered a significant net outflow of more than 10 billion yuan for two consecutive weeks.
Industry configuration: sanctions against Russia continue to be implemented, and grasp the two clues of Russia Ukraine event catalysis and long-term domestic substitution. a. Russia Ukraine event catalysis industry: 1) oil service and oil transportation; 2) Potash fertilizer; 3) Semiconductor material & power semiconductor; 4) Grain Shenzhen Agricultural Products Group Co.Ltd(000061) ; 5) Bank. b. Independent and controllable long-term track: 1) bulk oil and gas, minerals and grain Shenzhen Agricultural Products Group Co.Ltd(000061) ; 2) Semiconductor equipment; 3) Defense industry. c. Growth track of energy revolution: 1) wind power & photovoltaic; 2) New energy vehicles & parts; 3) Prefabricated buildings.
Risk tip: the conflict between Russia and Ukraine exceeded expectations, the persistence of inflation exceeded expectations, the tightening of liquidity exceeded expectations, and the epidemic repeatedly exceeded expectations.
