Last week, the market continued to rebound, with both the Shanghai Composite Index and the gem index rising by more than 2%.
In China, the improvement of the epidemic situation in Shanghai has driven the expected warming of resumption of work, and the overall falling economic data has brought the expectation of steady growth policy. Last April's economic data came out, and the breakdown data fell comprehensively. However, the weakness of economic data has been largely digested by the market in advance. First, the sharp slowdown of social finance data in the early stage has given the market sufficient expectations; Second, the current valuation of the A-share market is relatively low. On the day of the release of economic data on May 16, the Shanghai Composite Index and gem index fell only slightly by 0.3% and 1.1%, and the overall situation was stable. In the future, the continuous improvement of the epidemic may make April may become the bottom of the economy of the whole year. The market has strong expectations for the future economic recovery. From May 16, Shanghai began to promote the resumption of production and work in stages. In terms of policy, the five-year LPR interest rate decreased by 15bp, exceeding market expectations, and monetary easing was reconfirmed. This time, the one-year LPR did not fall, but the five-year LPR fell, releasing the signal of stabilizing real estate and infrastructure. This is also another important measure after reducing the lower limit of the first house loan interest rate. It is worth looking forward to more implementation of the follow-up steady growth policy, and greater stimulus policies in the consumer field are also expected to be in the way.
Overseas, the resilience of the A-share market has increased, and the linkage with U.S. stocks has weakened. Funds going north showed a net inflow of 15.2 billion yuan last week. At the same time, officials' concern about the US dollar hawk's continuous rise in the liquidity rate against the US dollar fell sharply to about 2.8% from the current high of the US dollar, and the liquidity rate of the US dollar against the US dollar fell sharply from the US dollar hawk's expectation of about 15.2 billion. The linkage between the A-share index and the U.S. standard stock index fell by 3.0% and 8.0% respectively, weakening the performance of the A-share index and the U.S. standard stock index. In addition, the situation in Russia and Ukraine is still repeated. The international situation is volatile or exacerbates the tension of global food supply. Indonesia announced to stop selling palm oil overseas as early as April. Recently, India announced a ban on wheat export, and China is paying more and more attention to food security. Under this background, the enthusiasm of food planting will also be improved, but there is no need to worry too much about China's inflation under the current growth situation.
At present, the market is still in the market of oversold and rebound, and the rotation of short-term sectors has accelerated, but on the whole, the manufacturing industry with large decline has performed better. After the resumption of work and production is accelerated, the market logic will turn more to post epidemic recovery. The market is still rebounding, and the overall trading activity is still not high. Last week, the average daily turnover of all A-Shares was 815 billion yuan, down slightly month on month, and the financing balance was about 1.4 trillion yuan, basically flat month on month; However, in terms of structure, we can see that growth and small and medium-sized sector trading continue to pick up. On the one hand, some growth sectors began to show the sustainability of rising momentum. Since May, manufacturing industries such as automobile, power equipment and electronics, which had a deep decline in the early stage, have increased by 14.1%, 13.0% and 8.3% respectively, and the performance of Companies in the top 10% of the market value of the industry is higher than that in the bottom 10%, which is highly representative of the industry. On the other hand, the style of small and medium-sized index is dominant. Among the main broad-based indexes since May, the small and medium-sized market value sectors represented by CSI 1000 (+ 9.2%) and CSI 500 (+ 5.4%) have increased the most, while the CSI 300 (+ 1.5%) represented by the leader of large market value is relatively weak.
In the short term, we will keep the direction of the rebound unchanged. During the rebound, we suggest paying more attention to the growth sectors of high-end manufacturing such as new energy, new energy vehicles and semiconductors, as well as the new infrastructure and consumption sectors with greater flexibility in steady growth.
