Macro
It is found that when the output gap is negative for a long time, it is often accompanied by interest rate cuts. The first interest rate cut in this round of interest rate reduction cycle occurs in the third quarter when the output gap turns negative and in the fourth quarter of 2019. At the same time, loan demand is more sensitive to the change of policy interest rate, and the reduction of policy interest rate is often the key factor to promote the recovery of loan demand. As the economic cycle began to evolve from "stagflation like" to "weak recession", the space for aggregate policy tools was opened again, and the necessity of lowering policy interest rates was significantly enhanced. The first quarter was an important window period.
Tactics
In the financial reporting season, 410 Canadian companies have disclosed performance forecasts, of which 85.4% have improved their performance, the proportion of which is at an all-time high, and more than half of the companies expect the growth rate to be more than 60%, which may be related to the disclosure rules and the low base in 2020. The industry end is also mostly good. The higher the growth rate of the industry's net profit, the more individual stocks whose performance exceeds the expectation in the industry. According to the situation this year, the probability of exceeding the expectation in nonferrous metals, steel, chemical industry, electronics, power equipment, medicine, biology, mechanical equipment and other industries is relatively large.
