Core conclusion: if it is an earlier year of the Spring Festival, the market is usually weak before the Spring Festival and stronger after the Spring Festival, and the high point of fund issuance appears after the Spring Festival. If it is a year later than the Spring Festival, it is often stronger before the festival than after the festival (except 2015), and the high point of fund issuance appears earlier. The reason may be that the year-end bonus payment and fund sales rhythm of various industries will be affected by the Spring Festival. If this law holds, it means that tactically, if you expect a strong rebound, the probability will wait after the Spring Festival. Strategically, for most of 2022, A-share roe will be in the decline cycle. In the profit decline cycle, the strength of the stock market depends on Residents' incremental funds and steady growth policies. We believe that 2022 will be a compressed version of 2018-2019. The first half of the year will be similar to 2018 and the second half will be similar to 2019.
(1) in the short term, the probability of fund issuance warming up again before the Spring Festival is very low. The two factors that determine the height of the cross year market are the fund issuance and credit data at the beginning of the year. From the situation of new funds last week, it is lower than expected on the whole. Considering that the circulation in late January will be affected by the Spring Festival, we expect that the fund circulation in January will be difficult to pick up again. The Spring Festival in 2022 is on February 1. Compared with the Spring Festival from late January to early February in history (2014, 2016, 2017, 2019 and 2020), the high point of fund issuance in the first quarter is more likely to appear after the Spring Festival.
In some years, the Spring Festival is late, such as 2013, 2015, 2018 and 2021. The Spring Festival is in mid February. At this time, the hottest time of issuance in the first quarter often occurs from January to February (except 2015). The reason behind this may be that the year-end bonus payment time of various industries and the sales rhythm of fund companies will be affected by the Spring Festival.
The resulting impact on the index is that if it is an earlier year of the Spring Festival, the market before the Spring Festival is often weak, while the market after the Spring Festival is mostly stronger than before the Spring Festival. If it is a year later than the Spring Festival, it is often stronger before the festival than after the festival (except 2015). If this law holds, it means that after the recent market adjustment, if you expect a strong rebound, the probability will wait after the Spring Festival.
(2) how to view the recent adjustment strategically? Steady growth, incremental capital and declining profits. Although there is no drastic change in performance in the recent adjustment, the important reason behind it is that investors are not confident that the profit in 2022 will continue to exceed expectations. We believe that A-share roe will be in a decline cycle for most of 2022. In the profit decline cycle, the strength of the stock market depends on Residents' incremental funds and steady growth policies. From 2014 to 2015, when residents had the strongest funds, although roe continued to decline, the stock market was a big bull market. From 2011 to 2012, when residents' funds were the weakest, along with the decline of roe, the stock market continued to decline for one and a half years. In 2018-2019, when residents' funds were weak first and then strong, the stock market fell first and then rose. We believe that 2022 will be a compressed version of 2018-2019. The first half of the year will be similar to 2018 and the second half will be similar to 2019.
Risk factors: the real estate market fell more than expected, and US stocks fluctuated sharply.
