Despite the gradual weakening of external shocks in the past two weeks, European and American stock markets have recovered the land lost since the conflict between Russia and Ukraine; However, the "internal stagnation" plagued by the epidemic continued to ferment, and market confidence was unable to be reversed. Will the coming April become a decision-making window? What opportunities will the disclosure period of the first quarterly report bring?
Why are the internal and external markets misplaced—— "Internal stagnation" has become the core contradiction. Since mid March, even if the Russian Ukrainian war is stuck, the rise of bulk commodities and the rhythm of the Fed's interest rate hike continue, the core stock indexes in Europe and the United States have basically recovered the decline after the outbreak of the war; In contrast, A-Shares are weaker and weaker. Since the conflict between Russia and Ukraine, the S & P 500 has increased by 15% relative to the Shanghai Composite Index. The significant deviation between the domestic and foreign markets points to that the external impact is gradually weakening, and the fermentation of "internal stagnation" and the concerns about China US relations have become the core contradiction dragging down a shares.
What is the law of the market during the first quarterly report window? Based on the past experience of historical regularity, an important feature of the stock market in April is that the relative rise and fall of stock price has a high correlation with the performance of the first quarter report. The A-share listed companies in the past 10 years are divided into five groups from high to low according to the rise and fall in April. From the results, the performance of the first quarter (whether the average or median) has a very high explanatory power for the stock market performance in April. It is worth noting that April is also an important disclosure period of the annual report of the previous year, but from the historical statistical results, it is more the quarterly report than the annual report of the previous year that determines the stock price performance in the performance window period. Combined with the pre disclosed performance in 2021 and the consistent profit forecast in 2022, the industries with the highest performance in the first quarter are concentrated in the upstream resources and high boom track sectors; The ranking of our analyst forecast correction index (MAF) (as of March 25) shows that the profit expectations of metal products, transportation equipment, weapons and clothing, state-owned banks, kitchen and electricity and other sub industries are among the top.
No decision in April: "weak entity and policy" may continue to the middle and later stages of the second quarter. 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.
The short-term allocation tends to be balanced. The first quarter report is an important starting point to participate in the oversold growth, and the 50 certainty is still the highest. The first quarter report is an important starting point to participate in the oversold growth. The boom track and cyclical products with both oversold and oversold performance have high flexibility. However, under the background of the profit cycle and the trend of interest rate, the effectiveness and sustainability of growth factors need to be observed. So far, the macro environment is still in the combination of "weak economy, wide currency and low credit". Historical experience shows that undervaluation is still the current direction of minimum resistance; Meanwhile, in the broad-based index, the valuation and risk premium of SSE 50 have reached the historical extreme value in mid March. The growth demand in the first half of the year continues to strengthen, and the pace of follow-up policies is likely to accelerate. In the short term, the market value represented by SSE 50 is still the highest.
Strategic suggestions and industry recommendations: (I) credit entities are weak, monetary credit transmission needs to be strengthened, and high-quality banks and state-owned enterprise developers are recommended; (II) both relatively undervalued positions and the growth catalyzed by the first quarter report, and recommend the communication in the direction of new infrastructure development, the reform of state-owned enterprises + the military industry determined by the growth trend; (III) oil transportation benefiting from the expansion of regional alternative demand, as well as aquaculture and catering with the concept of dilemma reversal.
Risk tips: 1. The epidemic situation is out of control; 2. A sharp recession; 3. The policy has changed more than expected.
