In the fourth quarter of 2021, the global "stagflation like" pattern became more and more obvious, and the prosperity of developed economies was stronger than that of emerging markets; China's economy continued to slow down steadily and PPI inflation peaked. At the same time, the overseas loose monetary policy accelerated into the reduction cycle, and China's prudent monetary policy began to loosen at the margin. In this context, the differentiation of major categories of assets increased in the fourth quarter, the performance of developed markets in equity assets was significantly better than that of emerging markets, the trend of bulk commodities peaked, and both the US dollar index and RMB performed strongly against the US dollar.
Looking forward to the first quarter of 2022, the global asset allocation will focus on two main lines.
First, global economic growth will usher in rebalancing in the slowdown of overall momentum. As the global economic recovery comes to an end, the spread of Omicron virus will drag down the repair of the supply chain, and the "quasi stagflation" pattern will spread and deepen. Among them, the "inflation is stronger than stagnation" in developed economies and "stagflation is stronger" in emerging markets. At the same time, China's economy also faced downward pressure in the first quarter, but the overall inflation risk tended to ease. Among them, China's epidemic repeatedly restricted the rebound of consumption, real estate investment was still in the downward trend, and infrastructure investment may have marginal improvement, but the effect was limited; In this context, the steady growth policy urgently needs to be strengthened. The central economic work conference has set the key to steady growth in 2022, focusing on economic construction. Expanding domestic demand and stabilizing real estate will become an important starting point for steady growth.
Second, the differentiation of monetary policy orientation between China and foreign countries has increased, overseas water collection has accelerated, and China is expected to be further relaxed. Among them, major overseas economies have entered the monetary policy tightening cycle, and the Federal Reserve confirmed that it will accelerate taper. It is expected to stop purchasing assets in March 2022 and further strengthen the expectation of interest rate increase; In addition, the Bank of England and other developed or emerging markets have successively raised interest rates in advance. Different from overseas, China's monetary policy was further relaxed in the first quarter under the demand of steady growth + risk prevention, the overall macro liquidity was slightly loose, and social finance is expected to stabilize and recover at the bottom.
In the first quarter of 2022, attention should be paid to several possible risk points: first, there is still great uncertainty in the evolution of the global covid-19 epidemic, and there is a possibility that the global economic repair will slow down, the supply chain dilemma will ease, and inflation will continue to rise, which may exceed expectations; Second, the tightening of monetary policy by the Federal Reserve may accelerate faster than expected, and some emerging economies with downward economic cycle and misplaced tightening of monetary policy will face greater pressure of capital outflow; Third, there is a risk of repeated game between China and the United States. The 2022 mid-term election is approaching, and the U.S. government may put pressure on China again to improve its support rate; Fourth, the downward dilemma of real estate has not been significantly improved, and we still need to be vigilant against the potential financial risks caused by the default of real estate enterprises.
Looking forward to the first quarter of 2022, the tightening of US dollar liquidity will put pressure on the valuation of global financial markets, and China's asset and US dollar indexes are relatively strong. Specifically: first, stock investment is better than bonds as a whole, among which Hong Kong stocks in the valuation depression have a relatively safer margin; A shares are still dominated by game shocks, focusing on the starting point of stable growth policy and the new growth point of performance expectation in 2022. Second, bond investment focuses on China's interest rate bonds. China's risk-free interest rate still has downward space, but the rhythm needs to be grasped (it may go down first and then up). US bonds show a "Xiong Ping" pattern due to the tightening of monetary policy. Third, bulk commodities will be differentiated among the weak, and the relative strength is ranked as industrial metals (nonferrous metals are stronger than black) > Shenzhen Agricultural Products Group Co.Ltd(000061) > energy and chemical industry > precious metals. Fourth, for foreign exchange assets, the US dollar index is expected to remain strong, the euro and Sterling are weak, and the RMB is weak in two-way fluctuations.
