Industry tracking
Market review: since mid March, the US stock market has gradually stabilized and rebounded despite the disturbance of macro factors such as high inflation, intensified tightening expectations of the Federal Reserve and the conflict between Russia and Ukraine. In March, the S & P 500 non essential consumption index rose by 5.1% and the essential consumption index rose by 2.7%. In the early stage, the decline of non essential consumer goods and the adjustment of overall valuation were larger, and the rebound effect was more obvious. As of March 31, 2003, the PE (TTM) of non essential consumer industry was 37.13 times, accounting for 46.37% in recent three years. The required consumer industry PE (TTM) is 22.37 times, and the current valuation level is close to the average value in recent three years. In terms of Hong Kong stocks, since March, essential consumption and non essential consumption have fallen sharply with the market, and began to rise in the second half of the month, but the overall decline is still large. In March, the non essential consumption industry fell by - 3.2%, and the essential consumption industry fell by - 12.6%.
Data tracking of key industries: consumption data outside China weakened. Offline service consumption in the United States repaired, but inflation limited purchasing power, and the growth rate of consumption data slowed down month on month. Affected by the resurgence of the epidemic, China's consumption boom is weak. In the United States, the CPI of the United States increased by 7.9% year-on-year in February. In the case of repeated warnings on inflation, this data basically met market expectations. In terms of details, it is mainly driven by energy, food, housing rent and travel related services, reflecting the rise of oil price, Shenzhen Agricultural Products Group Co.Ltd(000061) price rise, improvement of employment and recovery of travel. US retail sales in February were 0.3% mom, slightly lower than the expected 0.4%. The slowdown in February retail sales growth was partly due to the surge in retail sales in January. US consumer confidence has weakened further, and higher inflation is the main reason for the weakening of consumer confidence. Consumer spending rose 0.2% month on month (MOM) in February, offset by lower spending on cars and other goods. In China, affected by the resurgence of the epidemic, CPI rose by 0.9% year-on-year in February, showing a moderate upward trend as a whole. The Spring Festival effect, relatively tight supply and the continuous rise of bulk commodities have caused the current inflationary pressure.
Investment advice
Under the current environment of obvious convergence of market risk preference, the US stock market has a relative preference for stocks with high performance certainty and undervalued value, and has a low tolerance for the fault-tolerant space of individual stock performance. Looking forward to the second quarter, the disturbance of external macro factors will continue, and the fundamentals are still the main influencing variables of the subsequent stock price trend.
As the problem of inflation continues to erode consumers' purchasing power, and the economic outlook is uncertain due to inflation and continuous war, the current consumer market as a whole is relatively depressed. Affected by the improvement of the epidemic situation in the US stock market, service consumption has been repaired, and the good employment situation has brought room for easing labor costs. Inflation brings about a change in consumption patterns. Even if the price of necessities rises, the demand for necessities still exists. Investors are advised to pay attention to the necessary consumption leaders with strong pricing power and consumer growth stocks with sufficient early valuation adjustment.
Risk tips
Macroeconomic risk, geopolitical risk, repeated epidemic, lack of consumer confidence
