The stock index rose 2.02% this week. How will A-Shares operate next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
Haitong strategy: the bottom of the 3-4-year cycle of A-Shares has appeared, and the new infrastructure is better at this stage
Since the opening of the Shanghai Hong Kong stock connect in November 2014, the correlation between China and the United States stock markets has increased, but it is still weakly correlated. Among them, the phenomenon of A-Shares falling with each other is obvious. Since the end of April this year, after the sharp decline of US stocks, A-Shares have not followed the decline, which is due to the dislocation of economic cycles between China and the United States and the different valuation positions of stock markets. The bottom of the 3-4-year cycle of A-Shares has appeared, and positive factors are accumulating. At this stage, new infrastructure is better, such as digital economy and low-carbon economy. In the future, we will gradually pay attention to consumption.
CITIC strategy: the medium-term slow rise is still in the early stage, and the four main lines continue to rotate
The trend improvement of local epidemic situation and the joint force of policies began to appear. The improvement of fundamentals is expected to drive the medium-term repair of A-Shares for several months. At present, it is still in the initial stage. The market rhythm is characterized by slow rise, and the four main lines of structure continue to rotate. In terms of trend, the impact of China’s local epidemic situation has improved. The resumption of work and production and the resumption of business and market will be gradual. The implementation of steady growth policies takes into account the density and intensity. The resultant force of policies begins to appear. After China’s economy has reached the low point in April, it is expected to return to the good trend month by month in May, and the growth rate of A-share earnings will also pick up after bottoming in the second quarter. In terms of rhythm, this round of repair market is characterized by slow rise. At present, it is still in the initial stage. Epidemic prevention and control and resumption of work and production are a gradual process, and external disturbances have not been completely eliminated. Although market sentiment has been repaired, it is still low, institutional positions are still low, and the inflow rate of incremental funds is relatively slow. Structurally, the four main lines continue to rotate. It is suggested to firmly lay out the two main lines of modern infrastructure and real estate throughout the year, continue to focus on the main line of resumption of work and production in the quarter, and pay attention to the main line of consumption restoration in the month.
Monarch strategy: A-share is a rebound in the process of bottoming. The effect of policy is unknown, and it still takes time to grind the bottom
The rebound of this round of “meal market” has little to do with economic growth and enterprise profit expectations. However, it should be noted that after the overall rebound, the stock market will re-examine the fundamental repair and demand changes, as well as rebalance the micro trading structure. We judge that the logic of passivation of Q2 performance expectation is no longer applicable until the middle and early June of the market. After the resumption of work and production, the judgment of fundamental demand will again dominate the fundamentals. Stabilizing economic demand and restoring credit expansion are still important prerequisites for current stock investment. The expectations of the easing policy are moving from differences to consistency, but the differences in the effect of the easing policy are still huge, which is the core reason for the reversal of the current stock market’s difficulty in smoothly entering the trading trend, and also the constraint on whether the OTC funds can enter on a large scale and the end of the stock game pattern.
CICC strategy: A shares focus on the effectiveness of policies
Recently, the Chinese and American stock markets have gone in the opposite direction. The US stock market has been worried about the stagflation of early trading to the recession of recent trading. Investors are generally worried that the US Federal Reserve and the US government may refer to the US policy model of controlling inflation at the cost of economic growth in the late 1970s. The performance of China’s A-share market is relatively more resilient. Frequent policy warm wind and local epidemic relief are the main support for the recent performance of China’s market. At present, the dislocation between domestic and foreign growth and policy cycle is gradually close to the situation we suggested in the early stage. Looking forward to the future, we reiterate that the market has some characteristics of the bottom in terms of policy, valuation and capital sentiment, and the market already has the value of the middle line; There are still some challenges in the market environment, and more positive fundamental catalysts are needed for further growth. In particular, the month on month improvement of earnings expectations may be more important. Under the background of China’s “steady growth” overweight and overseas growth downturn, we will focus on the post epidemic repair of China’s fundamentals in the future, including real estate and consumer demand.
West China strategy: U-shaped market needs to avoid over optimism
In the context of sharp fluctuations in the overseas market, A-Shares have stepped out of the independent market in recent two weeks, mainly due to the market risk appetite boosted under the expectation of Shanghai’s resumption of work and production and steady growth policy. In terms of the current market, under the pattern of capital stock game, the rebound cannot be achieved overnight. At present, the conditions from rebound to reversal are not available. While actively participating in this round of rebound market, it is necessary to avoid excessive optimism and pessimism. The Shanghai composite index is at Jinlong Machinery & Electronic Co.Ltd(300032) 00 points, which are reasonable fluctuations in the “U” rebound market. From the medium and long-term perspective, A-Shares are in the stage of tamping the bottom range and gradually moving the center upward. In terms of industry allocation, we should pay attention to two main investment lines: one is related to steady growth, such as “real estate, construction and building materials”; Second, it is related to post epidemic repair, such as “food and beverage, automobile”, etc.
Certificate strategy: the wind continues to blow, and the repair of the “new half army” will continue
While China’s policies protect the market and risk appetite, they also create better macro conditions for the repair of the “new semi army”. The US bond interest rate fluctuated downward, and the impact on the “new half army” was alleviated. The current “Military” composition is still at a “half crowded” level, which is still not a significant constraint on the current stock price. Since this year, the market has made a sharp correction, and the congestion of the “new half army” has dropped to a historical low, and the pressure of transaction congestion has been greatly released. With the recent repair of stock prices, the congestion of the “new half army” has rebounded rapidly from the bottom, but it is still at a medium and low level, and the congestion of some segments is still at a medium level, which has not entered the overheating range. With the passing of the quarterly report period, the market has begun to explore the hidden and wrongly killed highlights in the “new half army” more rationally and calmly. The repair window of the “new half army” will continue.
Guosheng strategy: the long-term direction is emerging after the oversold
In conclusion, after the rebound at the monthly level, the trading indicators show that the driving force of market oversold is gradually weakened; According to the law of historical experience, after the 300 point counterattack, the space for this round of oversold rebound is also basically fulfilled. The inflection point of the epidemic, the peak of tightening and the ice of credit are the three-level drivers supporting the 4.26 counterattack; After the oversold rebound, the market needs new momentum to rise further. Before the external interest rate, China’s credit and performance trend have not been reversed, the medium-term layout continues to pay attention to three uncertainties: 1) the certainty of steady growth policy; 2) Dilemma reversal and certainty of long-term performance improvement; 3) Certainty of medium and short-term profits.
Western strategy: why is “promoting consumption” more noteworthy than “steady growth”
Advance in the direction of minimum resistance to post epidemic repair. With the recent overseas disturbance and the end of exchange rate concerns, the market is returning to the main line of epidemic repair. For the market, the choice of style will be more important than the overall judgment of the market. From the perspective of structure, focus on four main lines: 1) with the gradual rise of inflation expectations, the CPI related agricultural and other essential consumer goods sector is still the main line of the year; 2) Automobile, food and beverage, household appliances and other industries that are expected to benefit from the consumption promotion policy; 3) Post epidemic recovery related express logistics, catering tourism, airport aviation, media and other offline economy related industries; 4) Textile clothing, household appliances, light industry, etc. benefiting from the depreciation of RMB exchange rate.
GF strategy: further discussion on how to optimize investment opportunities for “neither humble nor arrogant”
This week from “global recession trading” to “US recession trading”. LPR cut 15bp this week, strengthening China’s policy expectation of “wide credit” and further easing the “China recession transaction”. The fall of US dollar and US bond interest rates shows that the expectation of “US recession” in market transactions continues to heat up, and the performance of US retail business is thunderous, superimposed with market concerns that the Federal Reserve cannot achieve a “soft economic landing”. The recent fall of US bond interest rate can improve the logic of the denominator of the growth of A-share market, but we judge that the overall environment of overseas “stagflation + tightening” has not changed, and the “recession transaction” will return to “tightening transaction” in June.
Livelihood Strategy: the end of “recession trading”
After nearly a month of rebound, some of the growth sectors are close to history, and the rebound range has exceeded the historical center, but it may be the “reversal illusion” caused by the excessive decline in the early stage over the historical average. It is noteworthy that in this round of rebound, the differentiation and convergence of the fund has obviously not kept up with the convergence of asset prices since this year, and “position covering” constitutes a potential reason. This week’s asset price performance seems to be “magnificent”. In fact, it is “calm”. The preset path of fundamentals is no different from that before: the growth rebound is coming to an end, and the sub industry with supply and demand independent of inflation can be stable and far-reaching. The real cycle is coming back. Grasp the certainty of energy, the repair elasticity of metal and the importance of energy transportation. Recommended: oil and gas, aluminum, copper, coal, oil transportation, gold, real estate, chemical fertilizer and banks.
