Key investment points:
I. overseas markets: the current round of monetary policy contraction of the Federal Reserve may have a faster pace in the early stage. Next week, the Federal Reserve will hold a January interest rate resolution meeting, which is expected to further clarify the path of table reduction and interest rate increase. Up to now, the market has fully expected the fed to start raising interest rates in March. According to CME observation, the market’s expectation probability of the Fed starting to raise interest rates in March rose to 97% (61% at the beginning of the year), and the yield of ten-year US bonds rose to 1.87% from around 1.5% at the beginning of the year, a new high in recent two years. In the context of rising inflation and low unemployment in the United States, the contraction of the Fed’s monetary policy may be faster in the early stage. We need to pay more attention to the risk of the Fed’s monetary tightening exceeding expectations in the first half of the year.
II. “Broad money” is a forward-looking force, and “broad credit” is the ultimate goal. In view of the current pressure of “weakening expectations” in China, since December, the central bank has reduced reserve requirements and interest rates. Combined with the statement made at the central bank’s financial data conference, the central bank’s demand for steady growth is more clear. In January, the central bank cut interest rates to drive down the cost of capital, reduce the cost of real economic sectors, and stabilize and improve expectations. From the perspective of guiding the time cycle from wide currency to wide credit, the market will still be in the window period of “wide currency” in the next 1-2 quarters, and China’s macro liquidity is expected to remain relatively abundant. “Wide credit” is the ultimate demand of the central bank for wide money. It is expected that the follow-up real estate regulation policies will be adjusted marginally. In addition, there are “promoting the construction of affordable housing, implementing urban renewal action, promoting the construction of new urban infrastructure, and accelerating the transformation and upgrading of the construction industry”.
III. recently, the power of incremental funds to enter the market is insufficient, and the market sentiment may be light. 1) Net sales of financing funds for five consecutive weeks, and the proportion of financing purchases in the turnover of A-Shares was 6.67%, which fell below 7% for the first time since 2020, at a low level in recent three years; 2) Since the beginning of the year, the average interval returns of equity funds and partial equity hybrid funds are – 4.70% and – 6.18% respectively. The lack of profit-making effect corresponds to the cooling of the fund issuance market, and the issuance of equity funds is relatively flat; 3) Wande all a equity risk premium is above the median since 2010, and the turnover of A-share market has also shrunk in the past five days, indicating that the risk appetite of A-share market decreased slightly before the festival.
IV. investment strategy: the shock remains the same, and we should follow the main line of “stable growth”. Near the Spring Festival, A-Shares are affected by the disturbance of the Federal Reserve’s monetary policy and the uncertainty of the news before the long holiday. The power of incremental funds to enter the market is insufficient, and A-Shares still show the characteristics of structural market. Since December, China’s steady growth policy has made forward-looking efforts. The central bank has cut reserve requirements and interest rates one after another, and there is still room for subsequent interest rate cuts. The market is in a “wide money” window period, and macro liquidity is expected to remain relatively loose. Structurally, “wide credit” is the ultimate demand of the central bank for wide money. Infrastructure and real estate are important. The real estate regulation policy is expected to be marginal loose. Urban renewal, affordable housing construction and new infrastructure are the key directions. In terms of configuration, it is suggested to focus on “undervalued blue chip”: first, it is related to traditional infrastructure, such as banks and building materials; Second, the real estate and its upstream and downstream industrial chain benefiting from the marginal improvement of real estate policy. Focus on topics: digital economy, meta universe, traditional Chinese medicine, etc.
Risk warning: repeated outbreaks outside China; Large fluctuations in overseas markets; Overseas Black Swan incident (political risk, sovereign rating downgrade), etc.
