The stock index fell 3.87% this week. How will A-Shares operate next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
China Securities Co.Ltd(601066) strategy: build a U-shaped bottom bargain hunting layout
From the medium-term perspective, we continue to maintain the judgment that A-Shares are building a U-shaped bottom area. On the one hand, the policy bottom and credit bottom may have been roughly confirmed, and the subsequent profit bottom will be gradually completed in the medium term; On the other hand, the market valuation and sentiment indicators have also entered the bottom area of the market. Although there is still the possibility of continued decline in the follow-up, the space in terms of odds is relatively limited. Therefore, from the medium-term perspective, although the market bottom grinding process may continue to repeat, investors do not need to be too pessimistic and should patiently wait for the market to complete the construction of U-shaped bottom. In the market bottom grinding period, investors should patiently wait for the market to complete the construction of U-shaped bottom. From the medium and long-term perspective, there is no need to be overly pessimistic, but should consider defensive counterattack and bargain hunting layout.
CICC strategy: A-share sentiment index “grinding bottom”
At present, the bottom characteristics have been partially shown in terms of policy, valuation, capital and behavior signals. Combined with the current growth environment, it may take time to wait for a more clear inflection point. We still maintain the judgment that the current market is in the “bottom grinding” period. Although the short-term market may still be repeated, the opportunities are gradually greater than the risks in the medium and long term, and there is no need to be too pessimistic about the future performance. Structurally, we believe that the undervalued “steady growth” field still has a certain allocation value. We pay attention to the bottom-up stock selection opportunities in the consumption field, and we may still need to wait for the opportunity to create growth style. At present, we pay attention to three directions: 1) in the “bottom grinding” stage of the market, the stable growth sector with relatively low valuation may still have relative benefits in the current macro environment, such as the industrial chain related to the stable demand of traditional infrastructure and real estate (real estate, building materials, construction, household appliances, home furnishings, etc.); 2) For the consumption in the middle and lower reaches with many early adjustments, low valuation and clear medium and long-term prospects, choose stocks from bottom to top, including household appliances, light industry and household appliances, automobiles and parts, agriculture, forestry, animal husbandry and fishery, medicine, etc; 3) The manufacturing growth sector, including new energy vehicles, new energy and technology hardware semiconductors, has released some risks, but the turnaround lies in the marginal improvement of “stagflation” risk, global liquidity and market sentiment.
CITIC strategy: looking at the allocation cost performance from the perspective of investor behavior
Judging from the structural characteristics of transaction congestion, the recent capital outflow mainly comes from hot money and retail investors. Judging from the valuation, redemption application and position, the position adjustment and position reduction of institutional funds are in the end, and the market sentiment has dropped to the low point since 2018. The dynamic P / E ratio of the main indexes has also fallen below the 25% quantile since 2010, of which the main blue chip index is below the 10% quantile since 2018. The long-term fundamentals of China’s economy will not change. The medium and long-term allocation cost performance of the current index is prominent. It is expected that the steady growth target for the whole year will remain unchanged. With the weakening of the impact of the epidemic, the disclosure of quarterly reports, the three factors of interest rate increase of the US dollar as scheduled, and the three main lines of infrastructure, real estate and consumption are expected to usher in a synchronous recovery in May. The medium-term repair market is gradually approaching. It is suggested to continue to stick to the main line of steady growth and firmly layout the varieties with low valuation and expected low.
Monarch strategy: the value of configuration is gradually emerging
The market has entered the bottom seeking stage, and the allocation value is expected to gradually appear. At present, the difficulty of stock pricing is that the uncertainty of economic growth and credit path leads to the fuzziness of profit expectation and the decline of risk preference. With the hawkish statement of the Federal Reserve, the slowdown of Global trade activities and the impact of the epidemic, the market has begun to enter a new bottom seeking stage. The pendulum of short-term trading is extremely difficult to grasp, but in the fog of consensus, we should be more optimistic. More pessimistic expectations have been included in the dynamic valuation of the A-share market. The valuation of Shanghai Stock Exchange is close to the limit of 2018, and the valuation is basically flat from the low point of the epidemic impact in 2020, indicating that the medium and long-term allocation value is beginning to appear with the adjustment of the market. Compared with the bottom of the previous two rounds of valuation, the value of national securities is deeply underestimated.
Guosheng strategy: how is the bottom refined
In conclusion, the current macro risk level is still high and the predictability is low, so it is very difficult to judge based on it; At the micro trading level, three important bottom signals: general decline, contraction and emotional bottom inflection point have not yet appeared. Therefore, the judgment of the bottom cannot be given too early. Before a clearer signal appears, we continue to recommend the strategy of “dividend + fundamental expectation improvement” and the strategy of “undervalued low position + dilemma reversal” in stock selection logic. In terms of industry allocation, it is suggested to continue to pay attention to three deterministic premiums: (1) the certainty of steady growth policy under “triple pressure”; （2） Dilemma reversal and certainty of long-term performance improvement; （3） The certainty of supply-demand mismatch in the medium and short term. It should be emphasized again that for the long-term allocation of funds, the current A-share has entered the value range; But in terms of time, we still need a clear appearance of macro and micro signals; If the above macro path of risk appetite repair can be realized, we can pay attention to the strategic allocation opportunities of consumer stocks in the middle and later part of the second quarter.
Western strategy: why does the boom track continue to adjust this year
In the short term, with the dawn of China’s epidemic, it is difficult for the fed to raise interest rates faster than expected in May, and the recovery of market sentiment in the second quarter will be deterministic. However, from a longer perspective, investors need to pay attention to the changes in the overall investment style of the market in the future after the rebound. From the perspective of profitability, the bottom of actual profit growth under the disturbance of the epidemic may appear later than the consensus expectation of the market. With the gradual recovery of China’s inflation and the limited space for superposition of monetary policy in the second half of the year, the mainstream investment style of the market is expected to gradually shift to value investment (pb-roe strategy). In terms of structure, it is suggested to pay attention to three main investment lines: 1) with the gradual rise of inflation expectations, CPI related agriculture and mandatory consumption sectors are still the main market of the whole year; 2) The offline economy related industries with strong performance recovery expectations after the epidemic, such as express logistics, catering, tourism, airport aviation and media, are expected to lead the market rebound; 3) With the gradual recovery of the economy, traditional consumption sectors such as food and beverage, household appliances and medicine, which are less disturbed by the epidemic, are also expected to usher in a turnaround.
Xingzheng strategy: to what extent are pessimistic expectations reflected?
From a number of indicators, the current market pessimistic expectations have been largely reflected in the stock price. 1) In terms of equity risk premium, the equity risk premium of wandequan a, Shanghai Composite Index and gem index has risen to 72.1%, 82.2% and 94% respectively since 2010, all exceeding the level after the end of the stock disaster in early 2016. 2) In terms of the magnitude and speed of decline, since the current round of market adjustment in mid December 2021, the Shanghai Composite Index has fallen by 16.1%, exceeding the adjustment at the beginning of 2021, and the slope is close to 2018. At the same time, the gem index fell by 34.3%, exceeding 2018 in both decline and slope. 3) At the valuation level, the PE valuation of all a is close to the level when the global market plummeted due to the epidemic in March 2020, and the valuation of gem is lower than that at that time. 4) In terms of market activity, the transaction volume of Shanghai and Shenzhen stock markets has also dropped to less than 800 billion yuan / day, and the balance of two financial institutions has also dropped to 1.6 trillion yuan from nearly 2 trillion yuan in the third quarter of 2021. 5) In terms of incremental funds, the issuance scale of various financial products fell sharply. In the first quarter, the new issuance scale of partial stock funds decreased by 82% year-on-year. Since April, only 11.1 billion yuan has been issued, and the increment of absolute income institutions such as insurance and private placement is also limited; In terms of capital positions, although the negative feedback position reduction in the first quarter has eased, the positions of most institutions are still hovering at a low level.
It shows that market sentiment is close to freezing point. From the perspective of a number of market expectations, it has been reflected in a great degree of pessimism. In the future, although it is difficult to directly reverse the short-term market under the internal and external uncertainties such as covid-19 epidemic, the Fed’s interest rate increase and contraction, the rise of US bond interest rates, US stock fluctuations and the conflict between Russia and Ukraine, the follow-up market will shift from overall adjustment to structural differentiation.
Cinda strategy: stagflation to the critical point of recession
The weakening of US stocks and the slower rise of commodities may indicate that the US economy is at the critical point from stagflation to recession. According to the experience of US stocks, if US stocks have not adjusted before the critical point, there may be a 20% retreat in the recession. If it is similar to May 1970 and June 1974, the stock market has been greatly adjusted before the critical point. Once the recession comes, it may be the last fall of the stock market. The recent depreciation of RMB exchange rate may also be related to this background. The initial impact of exchange rate depreciation on the stock market is negative, but in the middle and later stage, it has little impact on the stock market. The exchange rate and the US economic recession may suppress A-Shares in the near future, but the impact will not be long. Strategically, 2022 may be a V-shaped shock, with the first half similar to 2018 and the second half similar to 2019. Tactically, the rebound from mid March to early April has ended. The time is exactly three weeks, which is in line with the normal time range of the rebound in the bear market. The next rebound of the index may need to wait.
West China strategy: continue to shake and grind the bottom, and the value is dominated by blue chips
Since April, the characteristics of market stock game have been obvious. Under multiple disturbance factors outside China, investors have become cautious in trading. At the overseas level, the conflict between Russia and Ukraine has exacerbated the risk of global economic stagflation, and the Fed’s expectation of raising interest rates has increased again, and even the expectation of a single interest rate increase of 75 basis points appears; In China, the epidemic has further increased the downward pressure on the economy, and some enterprises have not resumed normal production. In the future, the recovery of market risk appetite needs to wait for more fundamentals and policy signals to be verified, such as the trend of the epidemic and the progress of enterprises’ resumption of work and production. Before that, A-Shares will still be dominated by “shock and bottom grinding”. In terms of market style, recommend high dividend, undervalued blue chip value sector. Specific to the industry, it is recommended to configure: “banking, real estate, oil exploitation, electric power, aviation”, etc.
Livelihood Strategy: there are two transaction logics in finding order, economy and overseas interest rate hikes
One of the transaction logics is to find the bottom of the economy under the local epidemic. The spread of the epidemic after the Spring Festival in 2022 has a contraction effect on both sides of the supply and demand of the economy. However, the current countercyclical policy seems to be insufficient to hold the economic downturn. Under this situation, the market assumes three transaction situations: infrastructure and industrial metals under the greater force of “steady growth” such as service consumption and transportation related to the reversal of the epidemic dilemma; And the “recession trading” under the further deterioration of the current situation, that is, the market fell indiscriminately as on Thursday. The second logic of the transaction is the overseas interest rate hike, the decline of inflation and the devaluation of the RMB. Some investors choose to believe that the Fed’s interest rate hike can curb inflation, and the “anti inflation transaction” began to appear. Therefore, the layout of the middle and lower reaches manufacturing industry with serious profit margin squeezed by the cost side; In addition, in the face of the rapid depreciation of the RMB, export-oriented industries benefiting from the depreciation of the exchange rate are also favored by investors. The most typical is the sharp rise of the textile and garment industry on Friday.
