One week market view
The market continued to grind the bottom, with steady growth and strong performance of the sector. Last week, the market maintained a bottom shock. The Shanghai Composite Index and the gem index rose or fell by - 0.9% and - 3.6% respectively. Among them, the steady growth sector performed relatively well, with the rise of industries such as architectural decoration (+ 6.1%), steel (+ 4.0%) and building materials (+ 3.9%), while emerging industries such as power equipment (- 4.7%), electronics (- 4.7%) and computers (- 4.5%) adjusted significantly, and the market seesaw effect was obvious.
The short-term focus of the market lies in the impact of the epidemic, policy response and tightening of overseas liquidity.
Let's first look at the impact of this round of epidemic. This round of epidemic has repeatedly further increased the growth pressure. The warehousing and logistics index in March hit a new low in two years. The impact of epidemic prevention and control is still fermenting, but the response of policies will be more determined. From the perspective of the whole country, at present, there are many new outbreaks in many places, and the epidemic prevention and control in various places is also increasing. The number of local positive cases in Shanghai has exceeded 20000 on a daily basis, which is still in a high platform period, but the measures for epidemic prevention and supply protection in all aspects are being followed up; Guangzhou launched a wide range of nucleic acid testing to face the epidemic risk more actively and prospectively; Beijing will adjust one place to a high-risk area. The current round of epidemic has repeatedly or further affected the speed of economic recovery. On April 6, the national standing committee pointed out that "China's epidemic has occurred frequently recently, the difficulties of market players have increased significantly, and the smooth economic cycle has encountered some constraints".
Let's look at the policy response. On April 6, the National People's Congress pointed out that "the complexity and uncertainty of China's external environment exceeded expectations" and "the new downward pressure on the economy increased", indicating that there are increasing concerns about the current economic growth and more certainty about the further easing of monetary policy. Financial development will also be more active. It is worth looking forward to the resolution of real estate risks and the overweight and landing of infrastructure sector. In addition, industries greatly affected by the epidemic have also been highly valued by policies. First, special poverty-stricken industries such as catering, retail, tourism, civil aviation, highway, waterway and railway transportation; Second, small, medium-sized and micro enterprises, individual industrial and commercial households and other subjects with weak risk resistance. In addition, financial stability legislation is based on China's actual environment, focusing on solving the shortcomings of institutional mechanisms and rules and regulations exposed in financial risk disposal, and the preparation of financial stability guarantee fund in transit.
Finally, let's look at the changes overseas. The further increase of peripheral complexity may restrict China's policy response. The interest rate spread between China and the United States narrowed to 3bp, so we should be cautious about the fluctuation of overseas funds. Last week, the conflict between Russia and Ukraine was still fermenting. Multinational sanctions continued to escalate, increasing the risk of energy and food supply, thus pushing up global inflation. The tightening trend of global liquidity accelerated. According to the minutes of the FOMC meeting of the Federal Reserve in March, many Federal Reserve officials believe that it may be necessary to raise interest rates by 50 BP once or more. At present, the yield of US bonds has risen to more than 2.7%, the yield of China's ten-year Treasury bonds has fallen to 2.75%, and the interest rate gap between China and the United States has narrowed to about 3 BP. Although looking back on history, the narrowing of the interest rate gap between China and the United States has a limited impact on overseas funds, China's current capital market environment is much different from the past, which can be found from the fluctuation of overseas funds in March. First, the asset proportion of overseas funds has risen rapidly in the past two years. Second, the current domestic and foreign fundamental cycles and monetary policy environment are also different. Third, the global economic and political environment is also more complex than in the past.
Based on the above factors, we still maintain the view that the market will fluctuate at the bottom in the medium term and are optimistic about the real estate, infrastructure, medicine (anti epidemic / traditional Chinese Medicine) and coal sectors in the short term; In the medium term, it is suggested to pay attention to the new performance growth points in the subdivided fields.
