The important influencing factors of the market in the near future are still four internal and external aspects: China's steady growth and epidemic situation, foreign geopolitics and the rise of US debt. Judging from last week's situation, there are both ups and downs. Abroad, the situation in Russia and Ukraine is still uncertain, but there are geopolitical fluctuations; US debt rose more than 30 BP in a week, breaking 2.7, which significantly suppressed the performance of US stocks, and Hong Kong stocks and China concept stocks were also affected. In China, the epidemic continues to remain high, the market's concern about the economic downturn has increased significantly, and the expectation of steady growth has increased significantly. Bond market yields declined slightly, and the stable growth sector continued to outperform the high valuation sector.
In China, the epidemic situation and steady growth are the main line at present. On the one hand, the epidemic interrupted the process of economic recovery. At the current time point, the number of newly confirmed cases and the number of provinces involved remain high, and the epidemic situation is still severe. Especially in Shanghai, high-frequency data such as travel and logistics fell sharply from March to early April. It is expected that the consumption growth in March may be negative, and the economic growth in the first quarter will be under great pressure; On the other hand, since the meeting of the financial stability Committee on March 16, the policy has continued to increase the efforts to maintain stability. On April 6, 2022, the executive meeting of the State Council stated that "we should make timely and flexible use of various monetary policy tools such as refinancing" to open policy space for credit easing. Real estate and infrastructure are still the main focus of the policy, especially the frequent positive real estate, the continuous strength of stocks in relevant sectors, the policy catalysis is not expected to end, and the undervalued sector is still dominant in the short term.
Overseas, the rise of US bond interest rates and geopolitical risks have increased the uncertainty of peripheral markets. The uncertainty of the situation between Russia and Ukraine is still unclear, and the geopolitical conflict fluctuates constantly; At the same time, the US 10-year Treasury yield continued to rise, the US economy repaired strongly, employment continued to improve, and inflation continued to rise, which accelerated the rate of interest rate increase of the Federal Reserve's monetary policy. The minutes of the FOMC meeting in March showed that the Federal Reserve is expected to start to shrink in May, and the probability of raising interest rates by 50bp has greatly increased.
Looking back, the market will look for a new pricing equilibrium after the rebound. In the short term, there are certain variables in geopolitics, the trend of China's epidemic, the implementation of stable growth policy and the upward range of US debt. It is suggested to follow up and wait-and-see and respond flexibly. The undervalued value is still relatively dominant, but the structural differentiation may enter the middle and late stage. The Treasury bond yield center may remain low in the current range, and it may take some time for the market to repair economic expectations.
Risk tips: the change of the epidemic situation exceeded expectations, and the development of the situation in Russia and Ukraine exceeded expectations
