Second, after 3000, there are two key questions for the market: first, how much downward space does the stock market have? Second, when can we turn optimistic? 3000 points once again came to the city, and people began to think. The purpose of this report is to help investors see these two problems objectively and rationally.
space, A-Shares have entered the value range, which is beyond doubt
After the recent two bottoms, the all a risk premium index has rebounded to the historical 90% quantile again, and its corresponding expected rate of return in the next 12 months has reached 15%. That is, from the perspective of long-term allocation, there is no doubt that A-Shares have entered the deep value range. In addition, in the previous report rebound or reversal (20220320), the calculation results of multiple dimensions show that 3000 points are basically close to the valuation bottom in the neutral case. Therefore, it can be said that 3000 points correspond to the bottom range of A-share valuation in theory. At least there is little absolute space for downward in the future.
but space and time are two problems. What are the macro and micro signals needed to turn optimism
in the last weekly report, we have analyzed the macro path of the repair of risk appetite from the macro level : first, whether the endogenous credit expansion can be realized, the medium and long-term loan of enterprises is the key; Second, the shift of the global interest rate environment (or the Fed's tightening expectation); Third, the epidemic situation and control policies have taken a turn for the better. As far as the current situation is concerned, these three conditions are still highly uncertain, so it is very difficult to judge based on them in this issue, we focus on the analysis from the transaction level to see what simple but important signals existed at the micro transaction level before the real bottom appeared in history:
first, general decline. Before the bottom in history, there is usually a general decline period, that is, the strong stocks and weak stocks in the early stage fell together . Historical experience shows that before the bottom of the market stops falling, a very obvious feature is the general decline (or the compensatory decline of strong stocks), that is, the strong stocks and weak stocks in the early stage have the same decline in the two weeks before the final bottom; This also means that if the differentiation state continues, the high probability does not end.
second, volume reduction is still a simple and important signal. The bottom in history is usually accompanied by the compression of trading volume and turnover . Considering the expansion of A-share market value, we observe it from the perspective of simulated turnover rate, that is, from the time series of daily transaction amount / free circulation market value. For the important bottom in history, our estimated simulated turnover rate is usually below 1%. At present, this index still has a considerable space.
Third, reach the bottom. From the experience of the previous two market bottoms, the investors' sentiment reached the bottom inflection point (in early 2016 and the third quarter of 2018 respectively), which is an important signal of the bottom of the market. At present, the Internet investors' sentiment index we track is still in the downward channel, which also points to the current market is still in the bottom trend.
current stock selection and industry strategies need to continue to pay attention to the certainty premium
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.
strategy suggestions and industry recommendations
(I) recommend high-quality private enterprises + state-owned enterprise developers, local growth buildings and high-quality small and medium-sized banks in the direction of steady growth; （2） Steel with undervalued value and high dividend, state-owned enterprise reform + military industry with determined growth trend; （3） The dilemma reverses the concept of breeding, oil transportation, shipping and catering.
risk tips : 1. The epidemic is out of control; 2. A sharp recession; 3. The policy has changed more than expected.
