general trend study and judgment: the bottom is approaching, waiting for the new year. this week, the market continued the downward trend of shock, and the Shanghai Composite Index fell by 1.63%. Under the convergence of negative factors, the market will still face periodic pressure. However, considering that the current market transaction congestion is significantly lower than that at the beginning of 2021, we believe that negative feedback is difficult to form → the market has a bottom, and the bargain hunting layout is waiting for the Spring Festival. 1) the current intensive deduction of negative factors: negative disturbance at the denominator is the core contradiction of the recent market. On the one hand, the minutes of the Federal Reserve's interest rate meeting in December released a strong hawkish signal, which affected the rapid rise of the yield of 10-year us bonds. On the basis of the market's consistent expectation of China's broad currency in the first half of the year, the impact of overseas disturbance on market liquidity expectation has been marginally amplified. On the other hand, the superposition of real estate credit risk and Omicron exacerbates the pressure of epidemic control in China, so that the risk preference at the denominator is still suppressed. 2) but the market has a bottom down: the current market congestion is low → the possibility of stampede is low → the market has a bottom down, which is not comparable with the market in February 2021. After the Spring Festival, the negative factors with overseas liquidity risk as the core will be gradually implemented and digested. At the same time, with the successive completion of the change of provincial Party and government organs, the steady growth policy will be gradually promoted and strengthened, and the market is expected to gradually recover. On the whole, bargain hunting layout years ago, waiting for the Spring Festival.
at present, there are two core contradictions that dominate the operation of the market: 1) China's liquidity expectations are gradually consistent, but overseas liquidity expectations will continue to fluctuate, which has become an important factor affecting the rhythm of market operation. from the perspective of marginal change, the current market expectations for China's liquidity are relatively consistent. Although there are still some differences in specific operation, there are no differences on the wide currency rhythm. Specifically, in the first quarter of 2022, under the influence of multi factors such as cross year capital pressure, steady growth pressure and real estate risk, it is possible to reduce the reserve requirement once or twice again, and the MLF interest rate window is also reduced in the first half of the year. However, overseas liquidity is expected to remain in high volatility, which will become an important factor affecting the rhythm of market operation. On Monday, Powell said that after the Fed took measures to achieve normalization and "this is a long road to normality", the market warmed up, but then many Fed officials continued to hawk, and the global equity market re adjusted. In the future, with the month on month acceleration of wage rise and the disturbance of supply chain problems, the inflation pressure is still high before the interest rate meeting in March, and the overseas liquidity expectation is still in an unstable state. 2) the most dangerous moment of real estate credit risk has not passed, and overseas bonds will face a severe test when they mature on a large scale in the first quarter. since January, there have been thunderstorms and frequent work stoppages in real estate. This week, the real estate chain led the decline in the whole market, which also shows that the market is still worried about real estate risks. Looking back, in the first quarter, the debt repayment of real estate enterprises will usher in a peak, of which the maturity of overseas bonds will be US $19.25 billion, further increasing the risk.
style switching, water flows to low. 1) In the short term, the market is accelerating the high-low switching. the recent structural market has gradually shown the characteristics of high-low switching. Since the beginning of January, the low price to book ratio index and low price to earnings ratio index have increased by 1.76% and 1.26% respectively, while the corresponding high price to book ratio index and high price to earnings ratio index have decreased by - 8.16% and - 6.81% respectively. At present, the negative expected impact of overseas liquidity is superimposed on the low risk appetite. We believe that the market style will accelerate the switch to the undervalued style. 2) from the medium-term perspective, we should also grasp the valuation repair direction under the improvement of fundamentals. from the medium-term perspective, with the weakening of profit contribution in 2022, the excess return of the market will also come from valuation repair. At the same time, considering the limitations of loose expected time and space, so that the valuation end does not have the basis for comprehensive lifting, we should focus on the direction of valuation repair, and the positive feedback mechanism of fundamentals will further determine the slope of valuation repair.
industry configuration: 1) consumption: Pig / household appliances / furniture and social service / Tourism / Baijiu and other directions; 2) Infrastructure: building materials / construction / power operation; 3) Finance: securities companies and banks; 4) Consumer electronics.
