The A-share market rebounded slightly this week. Although it stumbled, we seem to have more luck when we look at NASDAQ and Dow Jones on the other side of the ocean; Some people say that this is because the opposite bank has risen too much in the past three years, and we are still defending 3000 points. Different points determine the current trend. Maybe, but there should be deeper reasons for fermentation in the market.
Over the past three years, US stocks have risen steadily, mainly due to the substantial easing of the US dollar. Liquidity has not only promoted us technology and new energy stocks to record highs, but also led to the rise of relevant indexes; A shares have actively contracted liquidity since the second half of last year. At the same time, due to the different setting of index weight, the growth of gem is gratifying, while the growth of Shanghai index is limited.
In 2022, the United States began to shrink liquidity continuously, while high inflation and low growth still plagued the U.S. economy. At this time, the rapid contraction of overvalued value and low growth combined with liquidity will be fatal to the capital market. The decline will squeeze the liquidity foam of U.S. stocks in the past three years, and it is also the only way. Overseas risks cannot be underestimated.
Back to a shares, due to the active contraction last year, our liquidity will be independent of the world this year. M2 has reached nearly 250 trillion last month and remains relatively loose. Although economic data still puzzles the upward driving force of the market, undervaluation, wide currency and low growth enable A-Shares to maintain a relative balance at least at 3000 points, It is not even ruled out that in the second half of the year, with the recovery of economic data, it is expected to get out of a small upward market independent of Europe and the United States.
At the beginning of this year, the global macro uncertainty made us cautious. Defensive counterattack was the main strategy we set at the beginning of this year. However, as various adverse factors were constantly reflected in the market and suppressed the continuous decline of the index to 3000 points, we seem to see some opportunities this year. It is inevitable to stabilize growth and promote consumption this year, and the process of economic recovery and liquidity are bound to become horns. At this time, maintain confidence, Patience, bargain hunting and looking forward to surprises may be our main strategy in the second half of the year.
Compared with the beginning of the year, we have become more positive. Although we do not expect such a big bull market in 2019, liquidity may bring some small surprises to A-Shares before the economy stabilizes.
(the author is Guotai Junan Securities Co.Ltd(601211) Shanghai Research Director)
