Core ideas
Review: From November 2021, the steady growth direction represented by state-owned enterprise real estate will be the first to be promoted, and the "Top Ten Forecasts for 2022" is judged that "a wave of undervaluation repair market similar to the 'mini version of 2014' is expected in 2022".
Outlook: The market ushered in a phased repair, but the probability of a "V-shaped" reversal in the short term is not large, and March is still an important observation window. In the second quarter, the main line may once again be biased towards technological growth.
The market ushered in a phased repair. Since the beginning of the year, the high-prosperity and hard technology growth track represented by the "new half army" has been greatly adjusted due to the impact of multiple factors such as the rising concerns of the Fed's interest rate hikes, the sharp decline in US stocks, especially technology stocks, the overcrowding of market transactions, the deterioration of micro liquidity, and the long-term deterioration of the relevant sectors. At present, as the market's panic about the Fed's interest rate hike has eased, the transaction congestion has dropped to a historic low, the main funds have returned to the position in advance, the ETF incremental funds have continued to flow in, and the pharmaceutical, "new half army" and other sectors have led the market to repair in stages.
However, the probability of a "V-shaped" reversal in the short term is unlikely, and March is still an important window for observation. 1. The Fed's interest rate hike and the trend of US Treasury interest rates. Since the beginning of the year, the sharp rise in US Treasury interest rates under the rising expectations of the Fed has been an important factor dragging down domestic risk appetite, especially for sectors such as the "new half army". The Federal Reserve interest rate meeting is about to begin on March 16. Recently, although the market's expectations for a 50bp rate hike in March have dropped significantly, a six-fold rate hike during the year is gradually becoming the consensus of the market. And according to the current federal funds rate futures, the market expects the Fed to be in March, May, June, July, September, and November, and the pace is slightly faster than before. Overall, short-term inflation, geopolitical pressure under the Fed interest rate hike in March is a high probability event, more importantly, to observe the Fed's statement on the follow-up economic and policy trends. 2. On the domestic side, the two sessions will also be held on March 4. Focus on the decision-making level's layout of short-term "stable growth" and long-term high-quality development, including setting the tone for important indicators such as GDP growth targets and fiscal deficit rates. In march and mid-to-late March, on the one hand, popular track prosperity indicators, such as new energy vehicle sales, quarterly reports and other data will be released one after another. At present, the market is quite divergent in expectations for the popular track prosperity represented by the "new half army", and the relevant data will become an important signal for the confirmation of the prosperity. On the other hand, the domestic economic and financial data for January and February will also be released, and will become an important basis for the market to judge the effect of "steady growth" in the early stage and to predict the pace and strength of follow-up policies. 4. The progress of the Conflict between Russia and Ukraine and the price trend of commodities such as oil prices. Previously, the outbreak of war between Russia and Ukraine once led to a sharp decline in the global market and the price of crude oil exceeded 100 US dollars / barrel, and the follow-up will continue to be an important variable affecting the market, especially commodity prices and the global supply and demand pattern.
In the second quarter, the main line may once again be biased towards technological growth. Combined with the ten major indicators we proposed in the "New Half Army" Timing Framework", the current domestic liquidity continues to be loose, the "New Half Army" boom is still maintained at a high level, the transaction congestion has dropped to a historic low, the new energy and semiconductor leading stocks have stabilized first, the main funds have been returned in advance to increase their positions, the ETF incremental funds have continued to flow in, the valuation level has also dropped sharply, and the "New Half Army" has entered the bottom area. With the mid-March Fed interest rate meeting boots landing, the market interest rate hike expectations are the strongest past, the US Treasury interest rate or is expected to stop rising in stages, and according to the "New Half Army" timing framework analysts expected to correct the strength of this leading indicator, we believe that the main line in the second quarter or once again biased towards technological growth.
Investment strategy: In the short term, the first is to find targets that meet the characteristics of "small high-tech" from bottom to top in the more adjusted medicines, computers, and "new half-army"; the second is the oil and petrochemical and other bulk resource products that are expected to strengthen the price increase under the Russian-Ukrainian conflict; the third is the low valuation repair of financial real estate and other sectors under "steady growth". In the long run, continue to focus on the five major directions of scientific and technological innovation. 1) New energy (new energy vehicles, photovoltaics, wind power, UHV, etc.), 2) a new generation of information and communication technology (artificial intelligence, big data, cloud computing, 5G, etc.), 3) high-end manufacturing (intelligent CNC machine tools, robots, advanced rail equipment, etc.), 4) biomedicine (innovative drugs, CXOs, medical equipment and diagnostic equipment, etc.), 5) military (missile equipment, military electronic components, space stations, space shuttles, etc.).
Risk Warning: Pay attention to the return of global capital to the United States beyond expectations, and the Sino-US game exceeds expectations.
The body of the report
How sustained is the rally? How does the style deflect?
This week's review of the A-share market
A-share capital tracking
A-share earnings and valuations
Overseas market tracking
Risk Warning
Pay attention to the return of global capital to the United States beyond expectations, and the Sino-US game exceeds expectations.
Note: The report in this article is excerpted from the research report that has been publicly released by the Institute of Economics and Finance of Industrial Securities, and the specific report content and related risk tips are detailed in the full version of the report.
Securities Research Report: How Sustained Is the Rally? How does the style deflect? ——A-share Strategy Monthly Report
External release time: February 27, 2022
Report Publisher: Industrial Securities Co., Ltd. (securities investment consulting business qualified by the China Securities Regulatory Commission)
This report analyst :
Zhang Qiyao SAC practice certificate number: S0190521080005
Hu Siyu SAC practice certificate number: S0190521110003
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