Macro
After the subprime mortgage crisis and covid-19 crisis, the scale of U.S. debt expanded rapidly, but from the perspective of interest repayment and government leverage, the impact of debt expansion on the U.S. Treasury Department is limited. After the two crises, the Federal Reserve indirectly financed the Treasury’s debt by issuing more money. At the same time, it reduced the yield of treasury bonds through expectation guidance and QE, so as to provide guarantee for the Treasury’s large-scale issuance of bonds without bearing high interest. Looking ahead, the demand of foreign departments for US bonds is weak and the fiscal expenditure is not reduced. It is expected that the Ministry of finance will continue to rely on the Federal Reserve to finance its debt, and there may be no turning back for debt monetization.
Metalworking
— quantification
This week, the market showed value effect. The valuation factors performed relatively well, and the negative returns of market value, nonlinear market value, residual volatility and liquidity factors were obvious. The performance of growth factors in each stock pool is poor. The excess return of pb-roe-50 portfolio retreated this week. The excess return in the CSI 500 stock pool was – 0.23%, the excess return in the CSI 800 stock pool was – 1.41%, and the excess return in the whole market stock pool was – 2.39%.
Metalworking
The market fell significantly this week, with more small and medium-sized broad-based callback, and the discount of CSI 500 contract was significantly deepened. Wide base index cross section and high volatility of time series. There is little change in the capital position in the north direction, with the allocation of panjiacang banks, food and beverage and transportation, and the net sales of power equipment, new energy, electronics and medicine; In the trading order, the positions of power equipment and new energy, basic chemicals, power and utilities were increased, and the net sales of banks, electronics, food and beverage were increased. The group style continues to retreat.
Metalworking
The first quarterly report of public funds disclosed that the active partial share fund significantly increased its coal positions and improved the allocation of agriculture, forestry, animal husbandry and fishery, real estate and banking industries. The sectors with high market value are electronics, food and beverage, power equipment and pharmaceutical industries, and the industries with large reduction range are non bank finance, automobile, steel, mechanical equipment, media, computer and so on. The release of personal pension policy opinions ushered in an important opportunity for the development of the third pillar of China’s pension, and there is a broad space for the development of public pension fof products.
Fixed income
— credit debt
In terms of the issuance scale of the primary market: from April 17 to April 23, a total of 406305 billion yuan of credit bonds (corporate bonds, corporate bonds, medium-term notes, short-term financing bonds and directional instruments) were issued, an increase of 40.93% on a weekly basis; The total repayment was 264381 billion yuan and the net financing was 141924 billion yuan. A total of 181 urban investment bonds were issued, with an issuance amount of 85.018 billion yuan. In terms of trading volume in the secondary market: from April 17 to April 23, a total of 712736 billion credit bonds were traded.
Fixed income
— convertible bonds
In the follow-up, we believe that investors can consider the following directions: 1) low price bonds have limited falling space and have allocation cost performance. Investors can choose small-scale, low-cost and relatively reasonable valuation convertible bonds for allocation. 2) Investors can choose the double low strategy to select bonds, especially the partial debt double low strategy and the balanced double low strategy, taking into account the flexibility of convertible bonds while controlling the withdrawal.
3) it is expected that there will be a certain pressure of steady growth in the economy in the second and third quarters. In terms of sector allocation, the direction of water conservancy, infrastructure, building materials and the direction of resumption of work and production after the epidemic has eased can be considered.
Fixed income
— interest rate debt
The individual pension system was launched. Multiple departments respectively convey, study and implement the spirit of the special meeting of the financial commission of the State Council, and study and deploy the next work. China’s economy had a generally stable start in the first quarter, with GDP growing by 4.8% year-on-year and 1.3% month on month in the first quarter; Investment in real estate development increased by 0.7% year-on-year. The LPR quotation has been “standing still” for three consecutive months. This week’s treasury bond futures closed down across the board. The yield of treasury bonds rose or fell differently throughout the week, and the yield of 10-year Treasury bonds rose by 7.8bp.
