Strategy: the impact has passed, do not change the rebound trend
The recent inflation exceeding expectations and the sharp decline in social finance and credit are the two variables concerned by the market. Although there is still upward pressure on CPI, it is mainly caused by the upward price of pigs, which will not restrict monetary policy. Structural easing is more likely to occur in the future. In April, social finance showed a significant year-on-year decrease, and loans were the biggest drag. The impact of the epidemic is one of the main reasons. The market adjustment has priced this expectation before, and the probability of subsequent sustained impact is small. Compared with the four periods in which the total amount of social finance and medium and long-term loans fell sharply at the same time in history, after the release of social finance data, three A shares rose for one month.
The rebound in May starts the prelude to midsummer. The rebound market will not be achieved overnight, and the expected improvement is progressing step by step. On May 4, our report “prelude to the rebound opening midsummer” put forward: “however, the yield difference of Wande all A-share bonds has approached the mean value – 1std, the risk premium has also approached the mean value + 1std, and the medium and long-term allocation value of stocks has appeared”. The rebound of the market since May has verified the above logic to a certain extent. The rebound was accompanied by a decline in trading volume and turnover. This is because there is great uncertainty at home and abroad, and the process of repairing market risk appetite needs to be completed step by step. From the perspective of liquidity, the same is true. ETF and northbound funds have experienced twists and turns again, but the two financing funds maintain a net inflow.
The repair of risk appetite comes from deterministic expectations, and the current “certainty” comes from three main lines: rising inflation, real estate relaxation and better performance.
Main line 1: focus on the investment opportunities of narrowing the scissors gap between PPI and CPI. In contrast, historically, the scissors gap between PPI and CPI has narrowed (both PPI downward and CPI upward during the period), consumption tends to perform well, and banks usually perform well in the early stage of the range. According to the data of April, the downward trend of ppi-cpi has been established. Combined with high-frequency data, focus on the consumption of automobiles, household appliances, seed industry, pig cycle, textile manufacturing, CXO and banks;
Main line 2: real estate with policy catalysis and relatively low valuation. The central bank and the China Banking and Insurance Regulatory Commission issued new housing credit policies, and the strength of real estate policies increased significantly compared with the previous ones. Historical experience shows that real estate policies are tightened only after the new construction of real estate picks up, and the real estate market ends only when the policy turns or the fundamental data is fully improved. At present, the real estate policy continues to relax, the valuation of the real estate sector is still at a low level, and the quantile of price to book ratio is only 2.4%.
Main line 3: financial reports and high-frequency data show that the industry is a high boom industry segment. It mainly focuses on the sectors related to new and old infrastructure, including photovoltaic, optical modules, wind power and buildings, with excellent performance and good expectation. The current valuation is still relatively reasonable; High frequency data also show that the boom of new energy vehicles remains high.
Risk tip: the Fed tightened more than expected, the economy was less than expected, market fluctuations exceeded expectations, and the evolution of the epidemic exceeded expectations.
