Key investment points
One week scan:
Epidemic situation: the global new diagnosis continues to deteriorate, and the amount of vaccination has rebounded slightly. In the last week, about 18.49 million new confirmed cases and 54000 new deaths of covid-19 pneumonia were recorded worldwide. Compared with the previous week, the new confirmed cases increased by 42.6% and the new deaths increased by 30.2%. Global vaccination coverage rebounded slightly. This week, the total amount of global vaccination rebounded slightly, with the 7-day average rising by 14.2% compared with last week. Among them, the vaccination volume in the United States decreased by 21.7% compared with last week, and that in Europe increased by 21.3% compared with last week. The vaccination rate of intensive vaccination in Europe and America is high, and Europe and America may not tighten epidemic prevention measures. The U.S. Supreme Court rejected President Biden’s policy of mandatory coronal disease vaccination and regular virus testing for employees of large enterprises, but approved mandatory vaccination orders for some health care workers. Who director general Tan Desai said that the number of confirmed cases of covid-19 pneumonia in the world has reached the highest record since the outbreak, but the number of new deaths of covid-19 pneumonia in the world has remained stable every week since October last year. Although hospitalizations are increasing in most countries, they have not reached the level of previous outbreaks.
Overseas: the hawk voice of the Federal Reserve remains the same, and the European Central Bank focuses on inflation. Fed chairman Powell said that the Fed will use tools to curb inflation as needed, and high inflation is a serious threat to full employment. The balance sheet may be allowed to shrink later this year, but we have not made any decision on reducing the balance sheet. This time, the balance sheet will be reduced “earlier and faster”. Federal Reserve Balkin said it was possible to raise interest rates in March this year and supported the Fed’s shift to a more hawkish position. European Central Bank President Lagarde said that we understand that price rise is the concern of many people and attach great importance to it. The commitment to price stability is unwavering. In view of the current high inflation stage, it is particularly important to adopt a new strategy. In December 2021, the CPI of the United States increased by 7.0% year-on-year, a new high since June 1982, and the core CPI increased by 5.5% year-on-year and 0.6% month on month. In December, PPI increased by 9.7% year-on-year, the highest level since 2010. It rose 0.2% month on month, the lowest since November 2020.
Prices: Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale prices rose and international oil prices rebounded. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price index of the Ministry of agriculture rose month on month, with the average price of 28 key monitored vegetables falling and the average price of 7 key monitored fruits rising. This week, the average prices of Brent crude oil and WTI crude oil rose month on month, and the prices of China Shipbuilding Industry Group Power Co.Ltd(600482) coal and rebar rebounded.
Liquidity: the short-term interest rate rose and the US dollar index fell. This week, the weekly mean value of dr001 increased by 26.1bp month on month, and the weekly mean value of dr007 increased by 12.1bp month on month. The three-month Shibor interest rate this week was the same as last week, and the weekly average of the three-month certificate of deposit issuance interest rate decreased month on month. The interest rate of bills fell, and the weekly average of 1-month, 6-month and 1-year rediscount interest rate of state-owned shares and silver bills decreased month on month. This week, the central bank launched a 50 billion yuan reverse repurchase operation, and the 40 billion yuan reverse repurchase expired; The central bank’s open market operation next week will have 50 billion yuan of reverse repo due, and 500 billion yuan of MLF due on Monday. The dollar index fell this week and the RMB rose slightly.
Performance of major categories of assets: Hong Kong stocks rebounded significantly and treasury bond interest rates fell. Hong Kong stocks rebounded significantly this week, the main index of A-Shares fell, and only the gem index rebounded slightly. In terms of China’s equity, the top three industries this week were medicine and biology, electrical equipment and non-ferrous metals, and home appliances and building materials led the decline of a shares. This week, the weekly average yield of 10-year Treasury bonds decreased by 1.2bp, and the weekly average yield of 10-year CDB bonds decreased by 0.1bp.
Risk tip: policy changes, economic recovery is less than expected.
