Event:
On the morning of April 29, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and economic work. In the afternoon, the market rose sharply. The Shanghai stock index returned above 3000 points, and the gem index rose by more than 4%. At the industry level, TMT, military industry and household appliances led the rise.
Key investment points:
The full text of the Politburo meeting was rarely released at noon, showing the policy's care for the market. Recalling the holding of the Politburo meeting in April and the release time of the release, this year's Politburo meeting was released at noon for the first time and in the form of television rather than text. The release emphasizes that "we should respond to market concerns in a timely manner, steadily promote the reform of the stock issuance registration system, actively introduce long-term investors and maintain the smooth operation of the capital market". It is the first time that the Politburo meeting has made relevant statements on the capital market since April 2018. Considering that the stock market has raised interest rates at the Federal Reserve since April, Powell made hawkish remarks at the IMF Annual Meeting Under the influence of multiple internal and external dilemmas such as the continuous spread of the epidemic in China and the continuous weakening of the RMB exchange rate, the stock market has suffered a cathartic sharp decline. The advance release of the full draft of this Politburo meeting and relevant contents reflect the policy's care for the market level.
The pressure of steady growth will not change the confidence of steady growth, and the expected goal of economic growth will remain unchanged. At the level of economic situation, on the one hand, the meeting became more cautious in judging the current economic situation. On the basis of setting the tone for a "smooth start" of the economy in the first quarter of this year, it stressed the concerns about the epidemic situation and geopolitical situation in China, and clearly pointed out that "the covid-19 pneumonia epidemic and the crisis in Ukraine have led to increased risks and challenges, and the complexity, severity and uncertainty of China's economic development environment have increased". On the other hand, the pressure of stabilizing growth does not change the confidence of stabilizing growth. This meeting made it clear that "we should strengthen confidence, overcome difficulties and ensure that the major policies and policies of the CPC Central Committee are implemented in place. We should strive to achieve the expected objectives of economic and social development throughout the year and keep the economy running within a reasonable range". In this regard, the market has given a clear response to the concerns about the economic growth goal, once again injecting a booster into the market. At the macro policy level, the current intertwined internal and external difficulties mean that policy support needs more efforts. Under the guidance of making good use of various monetary policy tools and stepping up the planning of incremental tools, it is expected that structural policies are expected to provide continuous support in key areas.
Expanding domestic demand, ensuring people's livelihood and platform economy were the three major concerns of the conference. First, the meeting once again stressed the importance of comprehensively strengthening infrastructure construction and giving full play to the leading role of consumption in the economic cycle. Combined with the intensive introduction of policies to expand domestic demand since mid and late April, the national level has actively arranged infrastructure and consumption policies, indicating that infrastructure is still the primary starting point for steady growth in the next stage, and with the subsequent gradual improvement of China's epidemic situation, consumption is gradually relayed. Second, considering that real estate is still a key variable in the current economic recovery, the expression of "one persistence + two support" at this meeting not only reflects the bottom line thinking, but also highlights the pursuit of progress in stability. The meeting further broadened the space for "implementing policies according to the city". Since April, some hot cities such as Suzhou, Nanjing and Shanghai have successively relaxed the real estate policy, and it is expected that the follow-up key first and second tier cities will still follow up. Third, on the basis of steady growth, this meeting emphasizes stabilizing employment + stabilizing prices. Combined with the positive statements on food, energy and employment related issues at the two recent national standing committees, it shows that the current policy concerns continue to sink and firmly hold the bottom line of people's livelihood security. On the basis of the current tax reduction and fee reduction policies, inclusive small and micro enterprises and inclusive pension refinancing tools have been successively implemented, it is expected that the follow-up fiscal and monetary structural policy tools will further tilt the field of people's livelihood. Fourth, the meeting once again responded to market concerns in a timely manner, and the statements of "maintaining the stable operation of the capital market" and "completing the special rectification of the platform economy and implementing normalized supervision" were consistent with the keynote of the meeting of the Finance Committee in March, highlighting the policy's attitude towards the "stable expectation" of the financial market.
The risk appetite has improved and the market has entered a feasible stage. Since the beginning of the year, the market has experienced three waves of obvious declines. The background is the tightening of the Federal Reserve in January and the rise of US bonds; In early March, the conflict between Russia and Ukraine became protracted and the oil price rose sharply; In April, the epidemic in China intensified and the RMB depreciated rapidly. After the rapid decline of the market, the catalyst for the market to stabilize and open the oversold rebound includes signs of improvement in fundamentals, policy care and the mitigation of some negative factors. The subsequent market will usher in an oversold rebound. There are three main catalytic factors. First, with the three rounds of decline in the market since the beginning of the year, each index has gradually entered the value range, and the valuation quantile of each major index has been in a relatively cheap position. Cheap is the last word. Second, the gradual easing of China's point epidemic is the general trend. After effectively controlling the epidemic, we will focus on economic construction, strive to achieve the expected goal of economic and social development throughout the year, and keep the economic operation within a reasonable range. China is still an economy with rapid growth worldwide this year. Third, with the final decision of the Politburo meeting in April, the tone is obviously warm, and with the arrival of the performance window period, the negative factors affecting the market risk appetite will be mitigated, and the market will usher in the repair and enter the feasible stage.
Structurally optimistic about the oversold rebound of consumption and growth. In the medium term, the consumption in the bottom grinding stage is dominant, focusing on two sub sectors: first, the food and beverage, catering and tourism, hotel, automobile, household appliances and other industries that have been fully adjusted and benefited from the marginal improvement of the epidemic; Second, medicine and biology with low valuation. On the other hand, the policy tone is relatively warm. After the sharp decline in the early stage, the configuration value of growth style appears. It pays attention to the opportunities of oversold rebound, and focuses on the Internet, new energy, national defense and military industry, TMT, etc.
Risk tips: the situation in Russia and Ukraine worsened again, Sino US relations deteriorated, US monetary policy tightened more than expected, the epidemic in China spread sharply, and the external market fell sharply.
