Core view
Review: on January 3, 2022, our report clearly put forward “it’s the turn of big finance”. This week, the real estate market was 6%, household appliances 5% and banks 3%, ranking at the top of the list, and the excess return was very obvious.
Various ministries and commissions, provinces and cities have introduced a series of measures, from infrastructure and real estate M & A loans to home appliances to the countryside, the steady growth measures have been put into force, and the market expectation has continued to improve. After the first quarter, the Fed will substantially enter the rhythm of raising interest rates and shrinking tables. The world may be facing a liquidity inflection point, which will form certain constraints on China’s monetary policy. The first quarter became a good time window for China’s monetary easing and steady growth. Current market β It is big finance (bank insurance, real estate chain, infrastructure chain). In the short term, there is a significant adjustment. Usually, there is a switching of market style, capital transfer and great financial harvest. The big finance with the main line of “steady growth” seems to be defensive, but it may actually be the best attack.
Everything is for “steady growth”. Stabilizing the macro economy is a political issue. We should pay attention to the “real estate chain” and “infrastructure chain” with large expectation difference. From the perspective of various ministries and commissions, there is a large expectation difference in the “real estate chain”, and the expectation response related to new energy is relatively sufficient, with little difference. National Development and Reform Commission: “expanding domestic demand” mainly focuses on infrastructure investment, green household appliances to the countryside, new energy vehicle consumption and the expansion of living service industry. Central bank: 1) structural monetary policy, focusing on Rural Revitalization, scientific innovation and small and micro enterprises. 2) Specific tools can focus on real estate M & A loans, double carbon refinancing and inclusive small and micro loans.
Ministry of Finance: 1) reduce taxes and fees, 2) improve the housing security system, and 3) moderately advance infrastructure construction. Ministry of industry and information technology: 1) carry out rural activities of new energy vehicles, green smart appliances and green building materials. 2) Launch the urban pilot of comprehensive electrification of vehicles in the public domain; 3) Focus on solving the problem of chip shortage in automobile and other fields;
From various places, the investment in major projects is higher than that in 2021. The investment of projects planned to start in Jiangsu Province is 572 billion yuan (an increase of more than 130 billion yuan compared with 2021), and that in Zhejiang Province is 638.6 billion yuan (an increase of more than 50 billion yuan compared with 2021). It will be clearer after the two sessions are held in various places. At the economic work conference at the end of 2021, it was proposed to “moderately advance infrastructure investment”, and “advance” has become another key word of “steady growth”. For example, Anhui, Jiangsu, Sichuan, Henan and other places have started the centralized commencement of major projects one after another, significantly 1-2 months earlier than before.
We may be facing a global liquidity inflection point. On January 5, the Federal Reserve released the minutes of the December interest rate meeting to improve that “it is appropriate to shrink the table in the process of monetary policy normalization”. At present, the market’s expectation of interest rate increase by the Federal Reserve is basically pricein, but the response to the expectation of table reduction is not sufficient. We see that Nasdaq has made a significant adjustment after the announcement of the minutes. Looking back, the reason why the Fed wants to shrink the table and raise interest rates is largely to avoid the excessive flattening of the two-year and 10-year interest rates of US bonds, which will lead to recession concerns in the market. Subsequently, after the end of taper in March, the Federal Reserve began to guide the expectation of table contraction and substantive interest rate increase, in the rhythm of substantive table contraction. In contrast, in China, after the first quarter, the Fed will substantially enter the contraction rhythm, which will form certain constraints on China’s monetary policy. Then the first quarter will become a better time window for monetary easing and steady growth.
After the first quarter, if the Federal Reserve starts to substantially raise interest rates and guide the contraction expectation, the growth direction of US stocks represented by Nasdaq will bear greater pressure. Mapping from US stocks to a shares, the opportunity of “new energy chain” due to “Tesla” may also be suppressed. Referring to historical experience, the expected fermentation stage of liquidity inflection point may have great pressure on emerging markets, especially growth stocks.
