Core view
Market review in the first quarter of 2022: market style changes from "growth" to "value"
The A-share market fell sharply in the first quarter. On the one hand, due to the disturbance of peripheral markets, the current US inflation continues to rise at an all-time high, and the pressure of the Federal Reserve to raise interest rates is still large. The market is expected that the Federal Reserve will adopt a more radical monetary policy to curb inflation, and the expectation of raising interest rates will change the global capital preference. In addition, the conflict between Russia and Ukraine has exacerbated the "anti globalization" and blocked the supply of global industrial chains, Most of the world's major financial markets have fallen to varying degrees; On the other hand, in the past two years, China's economy has maintained a high growth rate under the epidemic. In this context, the "high base" makes it more difficult for the current macro-economy to maintain a high growth rate. At the same time, under the background of high bulk commodities, the manufacturing end is under pressure. In March, the manufacturing PMI was 49.5%, falling back to the critical point. The slowdown of macroeconomic growth puts short-term pressure on the A-share market.
Market outlook for the second quarter: A-share market is expected to pick up
"Steady growth" underpins the macro economy. The government work report continues the statements of "keeping the word steady, making progress while maintaining stability, being steady and effective, and placing steady growth in a more prominent position" since the central economic work conference at the end of 2021. It is expected that fiscal policy and monetary policy will work together to form a basic support for China's economy, and then corporate profits will be guaranteed.
The impact of external disturbance is expected to slow down. On the issue of Russia and Ukraine, in terms of trade volume, Russia and Ukraine account for only 3% of China's foreign trade volume, which has a relatively limited impact on China's exports, and the rise in energy prices caused by the conflict between Russia and Ukraine is expected to gradually return to rationality with the negotiation; In terms of the Fed's interest rate hike, although the Fed still has strong expectations for raising interest rates under inflationary pressure, China's monetary policy will remain flexible, moderate and benchmark oriented, and China's liquidity is expected to be relatively "stable".
Industry configuration suggestions
Agricultural sector: as a large consumption country, China firmly adheres to the key point of ensuring national food security. At the same time, under the current background of "anti globalization", ensuring food "self-sufficiency" is the key.
Energy industry chain. The "14th five year plan" for modern energy system clearly planned the development of a variety of traditional energy and new energy. At the same time, the current energy shortage in Europe highlights the importance of "energy security".
High end manufacturing. Domestic substitution and independent and controllable industrial chain are the key directions of policy development, and at the demand side, new energy vehicles, UHV construction, 5g communication equipment and industrial Internet construction will be their increments.
Risk warning: the overseas Black Swan incident has led to sharp fluctuations in the global market, and then transmitted the risk to the Chinese market; Covid-19 epidemic has further impacted the global industrial chain repeatedly; The Fed raised interest rates at a faster pace than expected: risk transmission caused by global liquidity tightening.
