Market review: the two cities closed up slightly, and the power equipment sector performed strongly
Today, the Shanghai and Shenzhen index rose and then fell. As of the close, the Shanghai index rose 0.04% to 3524.11 and the Shenzhen index rose 0.37% to 14081.80. In terms of sectors, power equipment, non-ferrous metals, petroleum and petrochemical industry led the increase, while comprehensive, food and beverage and transportation led the decline. The turnover of the two cities was 864.16 billion yuan, a contraction of 12.22% over the previous trading day and 21.36% over the average of the previous five days. The net purchase of Shanghai Stock connect was 2.114 billion yuan, the net purchase of Shenzhen Stock connect was 1.339 billion yuan, and the net purchase of northbound funds throughout the day was 3.452 billion yuan.
Market focus:
According to the website of the people's Bank of China, in order to maintain stable liquidity before the Spring Festival, on January 24, 2022, the people's Bank of China carried out 150 billion yuan 14 day reverse repurchase by means of interest rate bidding. This is the first 14 day reverse repo operation carried out by the central bank after December 24, 2021, with the bid winning interest rate of 2.25%, a decrease of 10 basis points from the last time.
Strategic suggestion: pay attention to the opportunities of national defense and military industry
Today, the Shanghai and Shenzhen index opened lower again. After a slight rise in the shock, it became popular in the afternoon, but it fell back again in the late trading. The performance of the whole day was still depressed. Individual stocks still rose less and fell more, with a rise to fall ratio of 1753:2692. The market turnover was less than 900 billion yuan, which was significantly reduced compared with December. The market risk aversion increased significantly, or was mainly affected by the resurgence of the epidemic, Due to the great downward pressure on the economy and the dampening of market confidence. The performance of northbound funds is significantly different. Today, there is a significant net inflow, with a total net inflow of more than 24 billion yuan in the past three trading days, focusing on overweight financial, food and beverage and other sectors. We believe that the overall liquidity environment of the A-share market around the Spring Festival is relatively good, while the US stock market has started to make a significant correction since the beginning of 2022, which verifies that the US stock with high valuation mentioned in our annual report may fall significantly after the US Federal Reserve starts liquidity recovery. Under this background, China's overall economic structure is relatively more balanced, After the mitigation of real estate risk, the probability of systemic risk is low, so the attraction to foreign capital has also increased significantly. Therefore, it has also become an important hedging choice for the sharp correction of Chinese and overseas capital. Looking back on the past interest rate hike cycle of the Federal Reserve, most US stocks surged again after a short dip, but we believe that the core difference this time is the fundamentals of the US and China economy. Most of the previous interest rate hikes were due to the "overheating" of the economy. The rapid recovery of US stocks was mainly supported by strong economic growth momentum. However, this interest rate hike is more "involuntarily", In fact, the post epidemic recovery of the U.S. economy is still incomplete, the employment gap remains, and the uncontrollable inflation has begun to frustrate Chinese consumption. Therefore, under the impact of the epidemic, the Federal Reserve still tries its best to protect the supply chain, curb rapidly rising prices by raising interest rates, and try its best to avoid large-scale turbulence in the capital market by releasing "Hawk" signals in advance, We predict that this week's FOMC meeting may announce an interest rate increase in March, and the panic in the US stock market can not be ignored. In this context, it is suggested to still focus on defense and focus on the undervalued sector, especially the military sector that has experienced continuous correction recently and basically faces the same good trend.
