Event: on April 11, 2022, the A-share market as a whole fell sharply, with the Shanghai Composite Index and the gem index falling by 2.6% and 4.2% respectively. More than 4000 A shares fell, and 73 stocks fell by the limit. In terms of industries, except agriculture, forestry, animal husbandry and fishery, all other industries fell, with power equipment, non-ferrous metals, electronic components and automobiles falling by 5.1%, 5%, 4.9% and 4.8% respectively, and computer, finance, military industry and other industries also falling by more than 4%. From the perspective of market trading activity, the total a transaction volume of the two cities was 955.6 billion yuan, 37.3 billion yuan compared with the previous trading day, and the turnover rate was 1.7%. The overall net outflow of funds from the North was 5.76 billion yuan.
Analysis of reasons for market decline: the inflation data in March slightly exceeded market expectations, raising investors' concerns about the economy. In March, PPI rose by 1.1% month on month and 8.3% year-on-year. The conflict between Russia and Ukraine pushed up commodity prices. Imported inflation led to the continuous rise of prices of relevant resource products in China, and the gradual development of China's infrastructure also increased the demand for coal, metals and so on. In March, CPI was flat month on month, with a year-on-year increase of 1.5%, slightly exceeding expectations. Core CPI increased by 1.1% year-on-year. The rise of crude oil prices raised the prices of gasoline and diesel, and the rise of Shenzhen Agricultural Products Group Co.Ltd(000061) prices combined with China's epidemic situation repeatedly pushed up food prices. Economic data is the biggest variable of this month. Although the year-on-year economic data from January to February exceeded market expectations, it may be affected by the year-on-year base and can not reflect the real economic situation. The decline of some leading indicators of real estate shows that the economic end has not yet come. In April, we need to pay more attention to various economic indicators in March. The upside down of interest rate spread between China and the United States may bring short-term outflow of funds. On April 11, the interest rate spread between China and the United States on 10-year Treasury bonds appeared upside down for the first time since 2010. The narrowing of the interest rate spread between China and the United States often leads to the phased adjustment of a shares.
The arrival of the market bottom still takes time, and the policy has become a common expectation: compared with the previous decline rhythm of the market, after the establishment of the policy bottom, the short-term probability of the market has rebounded positively, but the arrival of the market bottom still needs to reach the bottom again. The current market temperature is still higher than that at the end of the previous policy. The current round of decline (from December 13, 2021 to now) of the Shanghai Composite Index has decreased by 14%, which is smaller than that in the previous rounds. The fundamentals are still in the downward channel, and the external market environment is complex. Therefore, it will still take time for the end of the market to come, and the market probability continues to fluctuate and build the bottom. After today's sharp decline, we need to be vigilant about the falling inertia of the market. The previous meeting of the finance committee established a positive signal, but the follow-up policy support will determine the time and space for the market to grind the bottom. In the current environment of rising investor panic, the policy force has also become the common expectation of investors. We can pay attention to the convening of the Politburo meeting in April. The current round of policy rhythm is "self dominated". We believe that the future policy will also adhere to its own rhythm and gradually exert its force.
Long term allocation along the idea of "value investment" and grasp the investment rhythm. Focus on short-term defense and long-term strategic allocation. Configuration suggestions: 1 Resource products sector benefiting from global energy shortage. The long-term tight supply and demand problem is still in place, and the profit certainty is strong. Driven by the economic recovery, there may be a rebound opportunity, and under the background of China's infrastructure gradually developing, the black industry chain, such as ferrous metal and coal, will benefit. 2. The agricultural sector, especially the grain and planting sectors, is expected to continue with the support of the rapid rise of global grain prices and the superposition of policies. The pig and chicken sectors are also of sustainable concern. 3. The military industry, new energy, semiconductor and other industries have high prosperity, smooth logic and good long-term growth. They can carry out strategic layout, long-term holding, bargain hunting and pay attention to the rhythm of investment.
Policy tips: risk exceeding expectations; The risk of geopolitical friction exceeding expectations; The risk of economic downturn exceeding expectations.
