RRR reduction can not effectively promote the decline of risk-free interest rate in the stock market on Friday, the central bank announced to cut the deposit reserve ratio of financial institutions by 0.25 percentage points and release long-term funds of about 530 billion yuan. However, for stock investors, the news of the RRR reduction is difficult to boost market confidence. If it is effective, the index should rise like a rainbow after the national standing committee meeting on April 16. On the contrary, the “small step” RRR reduction just shows that the space for monetary policy relaxation is constrained by the overseas monetary tightening cycle and the upside down of the interest rate gap between China and the United States, which has not been seen in a decade. Secondly, to some extent, this also indicates the weakening of the marginal effect of broad money, the continuous reduction of reverse repurchase and interbank certificate of deposit interest rates, and the macro liquidity has been in an extremely loose situation. The reduction of reserve requirement and interest rate does not mean that the risk-free interest rate of the stock market will decline. The key lies in the willingness of investors to hold money. The absence of credit policy, the pressure of inflation and the impact of the epidemic have increased the willingness of residents and business departments to hold money.
the revaluation of physical assets with stable cash flow has not ended as the expectations of residents and enterprise departments have weakened, the same easing measures are bound to require more large-scale easing in order to achieve the same expected effect, but this conflicts with the requirements of high-quality development. Investors should not expect too strong demand assumptions, flood irrigation or significant relaxation of epidemic control. However, with the transformation of economic structure and the downward pressure, the dependence of growth on traditional economic sectors has increased. The tail risk pricing (valuation compression) of real estate, platform economy and even consumption should converge, and there is a lack of obvious substitutes for the winning rate of stable growth. From the perspective of investment, more importantly, supply constraints and the impact of the epidemic have increased the return on assets of some cycles and consumer industries, and narrowed the relative distance from the growth sector, which is an important premise for the revaluation of this part of assets. In addition to the cycle, the consumer industry is also experiencing a round of extensive and profound supply side clearing, which means that the “leftovers” will obtain more shares and long-term profit elasticity. Looking forward to the second quarter, the demand expectation is still unstable, and the focus of stock investment is on supply constraints rather than demand assumptions.
continue to change positions: the style sector rotates within the value instead of growth / value switching in the exchange, there are still many investors looking forward to the switch between value and growth again. Even if there is, we believe that the opportunity of growth rebound is fleeting, and we suggest investors to actively change positions in the rebound. The A-share storm in June 2015, the semiconductor flameout in July 2020, the collapse of the share price of core assets in March 2021 and the sharp decline of the growth sector in early 2022 all indicate that the share price collapse caused by the deterioration of the micro trading structure needs a very long repair in the macro combination of declining economic expectations and high fluctuations in discount rate expectations, the positional warfare of growth / value is no longer applicable. Undervaluation, performance and performance determination are the current optimal solution. The value market is far from over, but the internal value will rotate
investment opportunities are in stocks with low-risk characteristics: stocks with undervalued value, performance and definite performance it should be pointed out that the undervalued sector is not equal to the sector with low-risk characteristics. It is very easy to fall into the valuation trap to select stocks only with undervalued value. Economic and policy uncertainty, declining profit expectations and risk appetite. Before the credit path is clear, investing in stocks is like “driving in fog”, and performance certainty is equally important. Industry recommendations: 1) hold physical assets and have a stable cash flow direction. High dividends are only one of them: coal, chemical resources, second tier central state-owned enterprises, real estate and banks; 2) Public investment direction dominated by government expenditure: construction, power grid, wind and solar power; 3) the dilemma reversal: pig, Baijiu and consumer services, focusing on Q2 consumer building materials and steel bottom elasticity.
