Zhou viewpoint
This week (March 21-march 27), the overall performance of the A-share market was relatively weak under the surge of US bond yields and the disturbance of the situation in Russia and Ukraine. The three major indexes fluctuated and closed down, and the industry intensified differentiation.
The current situation of A-Shares is very similar to that in October 2018. In 2018, there was an interval of about 2.5 months from the "policy bottom" to the "market bottom", which experienced three stages: comprehensive rebound, shock differentiation and confirmation of the bottom.
Compared with 2018, this round of rescue policy is only much more, but the peripheral environment is more complex. The process from the end of the policy to the end of the market will be more tortuous and difficult to achieve overnight. The follow-up trend must be analyzed in combination with the fundamentals. We still need to pay close attention to the Fed's policy, the situation in Russia and Ukraine, the risk of global stagflation, the epidemic in China, steady growth and credit easing.
In the process of A-Shares from "policy bottom" to "market bottom", the economy is still in the late stage of recession, and the industry opportunities corresponding to the recession stage are still there. The risk of short-term external inflation has escalated, and Powell's hawkish remarks have pushed the yield of 10-year US bonds to a new high. Inflation and risk aversion are heating up again. In this market environment, the allocation opportunity of Chinese version of "faang" came into being.
F (fuel, energy): coal (performance support) and petroleum and Petrochemical (high equilibrium of crude oil).
A (agriculture, forestry, animal husbandry and fishery): agriculture, forestry, animal husbandry and fishery (food security and supply-demand gap Catalysis).
A (architecture, architectural decoration): Pan real estate chain (steady growth overweight and policy risk mitigation).
N (non-ferrous metals): non-ferrous metals (price rise effect and resonance of supply-demand gap).
G: (gold): gold (anti inflation and hedging functions still exist).
Risk tips
(1) macroeconomic downturn accelerated
(2) the policy is not as expected
(3) large scale outbreak of geo conflict
