01
Market review
Domestically, A-shares and Hong Kong stocks weakened this week, and the broad-based index fell almost across the board. Funds returned to cautious defensive mode, with the A50 and dividend indices falling less, and the growth index leading the decline. The average daily turnover of the Shanghai and Shenzhen stock markets this week continued to decline compared with last week, and the average daily turnover reached below 700 billion yuan.
Overseas, the three broad-based indexes of U.S. stocks remained divergent this week, with the S&P 500 and Dow Jones Industrial Indices falling slightly, the Nasdaq index rising slightly, and overseas Treasury bond interest rates rising. On Thursday evening local time, the first televised debate between presidential candidate Joe Biden and Trump began, and the market then traded the possibility of Trump winning.
(Data source: wind, dated as of June 28, 2024, past performance of the index is not indicative of its future performance, investment should be cautious)
02
Industry situation
This week, 31 industries at the first level of Shenwan fell more than they rose, among them, banks, public utilities, petroleum and petrochemical rose, and real estate, power equipment, and commerce and retail industries fell first.
This week, the banking sector led the gains, and the banking sector performed strongly in the first half of the year, first, in the environment of pursuing high winning rates and certainty this year, the market chased the direction of high dividends represented by banks; Second, banks, as the largest heavy position of insurance funds, have also significantly benefited from the continuous inflow and increase of insurance funds.
This week, real estate fell sharply, and real estate continued to pull back last week, but the decline narrowed, and the turnover rebounded slightly. Since late April, the effect of policies at both ends of supply and demand needs to be continuously observed, and the real estate fundamentals still need to be improved, and the market is cautious about the sustainability of the recovery of real estate transactions.
(Data source: wind, dated as of June 28, 2024, the above does not constitute a recommendation of individual stocks, investment should be cautious)
03
Strategic perspectives
◆ [CITIC Securities: Three major signals are to be clarified, and the market inflection point will appear]
At present, the market has basically completed the adjustment caused by the expected revision, and the trend of survival of the fittest in the market continues.
Looking forward to the third quarter, policy signals, price signals and external signals are expected to become clearer, market liquidity is expected to improve significantly after the Third Plenary Session, investors gradually shift from the PEG framework to the free cash flow framework, and funds gather to the leaders of various industries.
First of all, from the perspective of the three inflection point signals, in terms of policy signals, the Third Plenum will focus on comprehensively deepening reforms, which can stabilize market expectations after landing; In terms of price signals, the stabilization of housing prices in core cities needs to be further verified, and the incremental policies of collecting and stimulating demand may be increased; On the external signals, the pressure on a strong dollar remains to be unleashed, and the impact of the US election will be gradually priced in in the third quarter.
Secondly, from the perspective of marginal changes in market liquidity, investors are expected to resume their enthusiasm for trading after the Third Plenary Session, and the liquidity inflection point will also appear, the trend of survival of the fittest in the market will continue, and funds will gradually gather to the leading companies in various industries.
Finally, from the perspective of allocation strategy, the value of the bottom position of low dividend volatility has not been shaken, and some growth industries have already seen performance inflection points.
◆【Huatai Strategy: Allocation Ideas under the U.S. Election Portfolio】
The election has entered the white-hot range, focusing on the configuration ideas under different combinations: the first round of debates in the US presidential election was held on June 28 (9 p.m. local time on the 27th). The U.S. election may affect the Greater China equity market from two dimensions: first, the "election effect" brought about by policy uncertainty, A/Hong Kong stocks, Chinese stocks and Chinese concept stocks are expected to stabilize and rebound during the white-hot election or after the dust settles, and high-end manufacturing/TMT and other sectors are more sensitive. The second is the "policy effect" brought about by the candidate's policy stance, which may have a more far-reaching impact: 1) if Trump wins the election + a unified Congress (the current leading combination), it may guide the allocation idea from the three dimensions of trade tariffs/energy independence/tax cuts and strong dollars; 2) If Biden is re-elected + unifies Congress, it may provide allocation clues from the perspective of weak dollar/high-tech precise control. The policy path under a divided Congress is blocked, or it may provide a "cushion" for the general election.
The first round of debates in the 2024 U.S. presidential election will be held at 9 a.m. Beijing time on June 28 (9 p.m. local time on the 27th). 2) public trust in the federal government has fallen to historic lows, and the political polarization of the two parties → the political context of this election may be more complicated; 3) Both candidates are directly or indirectly exposed to legal risks. The latest poll data shows that as of 06.19, in the presidential election, Trump narrowly leads Biden, and the election situation is still anxious; in the 119th congressional election, the Republican Party has a lead in both the Senate and the House of Representatives, and "Trump + United Congress" may be a temporary leading combination.
Economic policy uncertainty brings "election effect" to China's equity assets: With the unpredictability of the candidates in previous elections and the political parties and congressional changes behind them, the uncertainty of the United States itself and foreign policy has increased in the election year, thus affecting the risk appetite of China's equity market, which is known as the "election effect". The review found that: 1) The U.S. election has a phased impact on A-shares, Hong Kong stocks, Chinese stocks and Chinese concept stocks, and it is mainly concentrated in the middle of the year (during the U.S. bipartisan national convention and candidate debate), and the equity market may stabilize and rebound after the dust settles after the election. 2) It may be necessary to pay attention to the disruption of A-shares by the U.S. election in advance, and the short-term resilience of A-shares after the election may be higher. 3) Sub-structure, high-end manufacturing, TMT and other sectors may be more sensitive to the U.S. election, and basically face the U.S. trade policy insensitive industries (food and beverage/public utilities/environmental protection/social services) "anti-interference" or stronger.
If Trump wins the election, it may guide the allocation thinking from three dimensions: 1) comprehensive trade protectionism disrupts the export chain. Trump advocated a comprehensive tariff hike, which could increase the uncertainty of the mainland's external demand. 2) The energy policy of "ignoring the new and valuing the old" may trigger the reallocation of new/old energy. Trump reiterated his withdrawal from the Paris Climate Agreement after taking office, ended wind subsidies, and emphasized "energy independence" to expand domestic energy resource production. 3) The combination of "tariffs + tax cuts and fiscal easing" may push up the dollar, and more hawkish immigration policies may disrupt the balance between supply and demand of employment, leading to a resurgence of inflation, and global liquidity may once again face distribution problems in the context of a strong dollar. Under the split Congress, the struggle between the two parties continues, and the "lame" government may lead to the obstruction of the policy path, or to a certain extent, the impact may be reduced.
If Biden succeeds in turning the tide and is re-elected, it may provide clues from two dimensions: 1) loose fiscal and weak US dollars, overseas liquidity may usher in systemic decompression. If Biden wins the election and Congress reaches a unification agreement, tax tightening and other fiscal policies are expected to be accelerated, which will suppress the performance of the dollar. 2) High-tech competition between China and the United States is steadily rising. Compared with Trump, Biden advocates "precisely" strengthening control over China in the high-tech field, and is likely to follow the existing China framework after re-election. In addition, it should also be noted that after the U.S. election (11.05), the performance of A-share TMT and financial real estate in the case of presidential re-election is better than that of non-re-election, or due to stable and continuous industry/trade policies.
(Data source: wind, research reports of various brokerages, views are for reference only, investment needs to be cautious)
04
Hot news
Capital
◆ [China Securities Regulatory Commission Conducts Special Research on Further Deepening Capital Market Reform]
Recently, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, and other team members have successively conducted research in Shenzhen, Guangzhou, Shanghai, Beijing and other places to further deepen the reform of the capital market. Wu Qing pointed out that the China Securities Regulatory Commission is carrying out in-depth comprehensive evaluation of capital market reform such as the registration system, and on this basis, it will step up research and plan a package of measures to further deepen the capital market reform in an all-round way. The China Securities Regulatory Commission will adhere to the principle of seeking progress while maintaining stability, combining near and far, and implementing comprehensive policies, adhere to respecting laws, upholding integrity and innovation, strive to promote high-level market-oriented reforms, further enhance the inclusiveness and accuracy of the capital market's system for new industries, new forms of business and new technologies, and accelerate the implementation of the "Eight Articles of the Science and Technology Innovation Board"; Efforts will be made to promote the high-quality development of listed companies, and accelerate the improvement of basic systems such as issuance and listing, information disclosure, mergers and acquisitions, etc.; Efforts will be made to promote intermediaries to provide high-standard professional services, vigorously strengthen the construction of professional capacity, and accelerate the construction of first-class investment banks and investment institutions; Efforts will be made to promote the realization of "high costs" for violations of laws and regulations, greatly strengthen the three-dimensional accountability of administrative, criminal and civil matters, maintain a situation of strict supervision and strong supervision, and earnestly maintain the market order of the "three publics" and protect the legitimate rights and interests of small and medium-sized investors. Wu Qing stressed that the China Securities Regulatory Commission will adhere to the principle of "opening the door to evaluate and carry out reform", strengthen market communication, listen extensively and carefully study the opinions and suggestions of all parties, reform and improve the relevant systems and rules in a timely manner, and pay close attention to the introduction of a number of typical cases with exemplary significance, so as to promote the formation of a strong joint force of all parties to jointly promote and further deepen the reform of the capital market in an all-round way. (SFC website)
◆【The rate standard of the second stage of the rate reform of the public fund industry has been clarified】
The "Regulations on the Administration of Securities Transaction Costs of Publicly Offered Securities Investment Funds" will be smoothly implemented on July 1. In view of the key stock trading commission rates in the new regulations, securities firms and fund companies are intensively renewing new agreements, and they are all ready. From the perspective of the industry, the commission rate of passive equity fund stock trading agreed in the new agreement is generally between 2/10,000 and 2.5/10,000, and the commission rate of stock trading of other types of funds such as active equity and hybrid funds is generally about 5/10,000, and there is no ultra-low rate phenomenon reflected by individual public opinion in recent days. (Finance Associated Press)
◆ [Two departments: continue to implement the differentiated individual income tax policy on dividends and dividends of companies listed on the New Third Board]
Announcement of the Ministry of Finance and the State Administration of Taxation on Extending the Implementation of the Differentiated Individual Income Tax Policy on Dividends and Dividends of Companies Listed on the National Small and Medium-sized Enterprise Share Transfer System: If a person holds shares of a listed company and the holding period is less than 1 month (including 1 month), the full amount of its dividend income shall be included in the taxable income; If the holding period is more than 1 month to 1 year (including 1 year), the dividend income shall be temporarily reduced by 50% and included in the taxable income; The above-mentioned income is subject to individual income tax at a uniform rate of 20%. (Ministry of Finance website)
◆[The State Administration of Financial Regulation, the People's Bank of China, and the China Securities Regulatory Commission Announce Work Arrangements for the Protection of Financial Consumer Rights and Interests]
The State Administration of Financial Supervision and Administration is responsible for the overall protection of the rights and interests of financial consumers, formulates relevant development plans and policies and systems, improves the system and mechanism for the protection of the rights and interests of financial consumers, and carries out financial consumer education. The State Administration of Financial Supervision and Administration, the People's Bank of China and the China Securities Regulatory Commission have established a coordination mechanism for the protection of the rights and interests of financial consumers to strengthen information sharing and business cooperation. (SAFE website)
Macroeconomic
◆[National Bureau of Statistics: Manufacturing PMI in June was 49.5%, the same as the previous month]
The regular meeting of the Monetary Policy Committee of the People's Bank of China for the second quarter of 2024 (105th in total) was held in Beijing on June 25. The meeting held that it is necessary to intensify the implementation of the monetary policy that has been introduced. Maintain reasonable and abundant liquidity, guide the reasonable growth and balanced distribution of credit, and keep the scale of social financing and money supply in line with the expected targets of economic growth and price levels. Promote a moderate recovery in prices and keep prices at a reasonable level. We will improve the formation and transmission mechanism of market-oriented interest rates, enrich the monetary policy toolbox, give full play to the guiding role of the central bank's policy interest rates, release the effectiveness of the reform of the loan market prime interest rate and the market-oriented adjustment mechanism of deposit interest rates, and promote the steady decline of corporate financing and household credit costs. (DSEC website)
◆ [Seven departments jointly issued the "Work Plan on Doing a Solid Job in Science and Technology Finance"]
The "Work Plan" puts forward a series of targeted work measures around cultivating a financial market ecology that supports scientific and technological innovation. Comprehensively strengthen the professional capacity building of financial services, support banking financial institutions to build an exclusive organizational structure and risk control mechanism for science and technology finance, and improve internal systems such as performance appraisal and due diligence exemption. Establish a green channel for the issuance of bonds by science and technology enterprises, and promote the bond issuance and financing of science and technology enterprises from the aspects of financing docking, credit enhancement, and rating. Strengthen the functions of serving scientific and technological innovation such as stocks, the New Third Board, and regional equity markets, and strengthen policy support for cross-border financing of technology-based enterprises. We will focus on supporting small and medium-sized science and technology enterprises, improve credit and insurance products that adapt to the characteristics of science and technology enterprises in the start-up and growth stages, further promote regional equity market innovation pilots, and enrich the sources of funds and exit channels for venture capital funds. We will build a science and technology finance ecosystem, encourage all localities to form science and technology finance alliances, support exchanges and cooperation between various financial institutions and science and technology intermediary service organizations, and provide diversified relay financial services of "angel investment, venture capital, private equity investment, bank loans, and capital market financing" for science and technology enterprises. (Oriental Fortune)
◆【Central Bank: It is necessary to increase the implementation of the monetary policy that has been introduced to promote the steady and healthy development of the real estate market】
The regular meeting of the Monetary Policy Committee of the People's Bank of China for the second quarter of 2024 (105th in total) was held in Beijing on June 25. The meeting held that it is necessary to intensify the implementation of the monetary policy that has been introduced. Maintain reasonable and abundant liquidity, guide the reasonable growth and balanced distribution of credit, and keep the scale of social financing and money supply in line with the expected targets of economic growth and price levels. Promote a moderate recovery in prices and keep prices at a reasonable level. We will improve the formation and transmission mechanism of market-oriented interest rates, enrich the monetary policy toolbox, give full play to the guiding role of the central bank's policy interest rates, release the effectiveness of the reform of the loan market prime interest rate and the market-oriented adjustment mechanism of deposit interest rates, and promote the steady decline of corporate financing and household credit costs. (Oriental Fortune)
◆[Foreign Exchange Bureau: The net inflow of securities investment in China in the first quarter was 32.2 billion US dollars, a quarterly high level in the past three years]
Wang Chunying, Deputy Director of the State Administration of Foreign Exchange, answered reporters' questions on the balance of payments in the first quarter of 2024 and the international investment position at the end of March. Cross-border two-way investment and financing were carried out in an orderly manner. In the first quarter, the mainland's foreign investment in all kinds developed steadily, with a net increase of $138.9 billion in financial account assets, of which $43.4 billion in reserve assets and $95.4 billion in non-reserve financial account assets due to transactions. All kinds of investment in China maintained a certain scale of net inflows, with a net increase of US$64.5 billion in financial account liabilities, of which the net inflow of securities investment in China was US$32.2 billion, a quarterly high level in the past three years, and the trend of foreign investors' allocation of RMB assets continued to improve. On the whole, the mainland's high-quality development has been steadily promoted, the national economy has continued to pick up and improve, and the overall economic operation is stable, which is conducive to maintaining a basic balance of payments. (SAFE website)
Industrial Economy
◆【Premier of the State Council Signs Decree of the State Council Promulgating the Regulations on the Administration of Rare Earths】
The Premier of the State Council recently signed an order of the State Council promulgating the Regulations on the Administration of Rare Earths (hereinafter referred to as the "Regulations"), which will come into force on October 1, 2024. It is clear that the state implements a unified plan for the development of the rare earth industry, and encourages and supports the research and development and application of new technologies, new processes, new products, new materials and new equipment in the rare earth industry. It stipulates that rare earth production enterprises shall comply with laws and regulations on mineral resources, energy conservation and environmental protection, clean production, safe production and fire protection, so as to ensure the realization of green development and safe production. (Xinhua News Agency)
◆ [Ministry of Finance: In May, a total of 47.617 billion yuan of lottery tickets were sold nationwide, a year-on-year decrease of 4.8%]
Data released by the Ministry of Finance,In May,A total of 47.617 billion yuan of lottery tickets were sold nationwide,A year-on-year decrease of 2.403 billion yuan,A decrease of 4.8%. Among them, the sales of welfare lottery institutions were 17.057 billion yuan, an increase of 670 million yuan year-on-year, an increase of 4.1%; Sports lottery agency sales of 30.560 billion yuan, a year-on-year decrease of 3.073 billion yuan, a decrease of 9.1%. The main reason for the decrease in national lottery sales,First, affected by factors such as the reduction of high-quality sports events,The growth rate of lottery tickets has slowed down. Second, affected by a variety of factors, instant lottery ticket sales declined. Third, the lottery market gradually recovered in the same period last year,Base period sales are relatively high. 1-5 months cumulative,A total of 252.540 billion yuan of lottery tickets were sold nationwide,An increase of 27.369 billion yuan year-on-year,An increase of 12.2%. Among them, the sales of welfare lottery institutions were 87.019 billion yuan, an increase of 15.238 billion yuan year-on-year, an increase of 21.2%; Sports lottery agency sales of 165.521 billion yuan, an increase of 12.131 billion yuan year-on-year, an increase of 7.9%. (Ministry of Finance)
◆[China Securities Association Surveys the Business Operation of Securities Firms in 2023]
China Securities Journal and China Securities Taurus reporter exclusively learned from the industry on June 28 that the Securities Association of China recently launched a statistical survey on the business operation of securities research reports issued by securities companies in 2023, so as to objectively reflect the development of securities related businesses and promote the healthy development of business. It is reported that the statistics aim to comprehensively review the operation of the brokerage research business, and the statistical items not only cover the organizational structure and human resource allocation of the research department, but also go deep into the composition of the analyst team, the effectiveness of the research sales department, the role of the chief economist, the layout of overseas research, customer coverage and commission income, research report output, external expert services and other dimensions, similar to previous years. (China Securities Journal)
◆【Shenzhen North Railway Station can fly charter flights from 9800 yuan and can seat 6 people】
On the morning of June 28, China's first "low-altitude + rail" air-rail intermodal transport project jointly built by Shenzhen Railway Group and Eastern General Aviation was officially launched in the East Square of Shenzhen North Railway Station. It is understood that the charter flight of Shenzhen North Suixin starts at 9,800 yuan, can seat 6 people, and can fly to various districts of Shenzhen and Zhongshan City. Citizens can go to the apron of the East Square of Shenzhen North Railway Station to take a flight. (Shenzhen News Network)
Global market
◆ [The three major U.S. stock indexes closed down, most of the popular technology stocks fell, and Nike fell nearly 20%]
Eastern time on Friday, the three major U.S. stock indexes rose and fell to close down collectively, with the S&P and Nasdaq closing down after hitting new intraday highs, and the Nasdaq breaking through 18,000 points for the first time in intraday trading. In the first half of 2024, artificial intelligence will be sought after by the market, with the Nasdaq rising by more than 18% and Nvidia rising by more than 149%. Nike plunged nearly 20% after reporting a weaker full-year guidance than expected. Popular Chinese concept stocks fell, and the Nasdaq China Golden Dragon Index fell 1.02%. (Oriental Fortune Choice data)
◆ [Heavy adjustments!] The dominance of big tech companies highlights the "annual rebalancing of the Russell index" in U.S. stocks on Monday.
On June 28, local time, the Russell series of U.S. stock indexes (Russell 1000, Russell 2000 and Russell 3000, etc.) ushered in a blockbuster "annual rebalancing". This means that the index provider, FTSE Russell Indices, realigns the constituents of the Russell Series to ensure that these indices accurately reflect current U.S. equity market conditions. After the restructuring, the total weighting of the top 10 companies in the Russell 1000 index will reach 34.3%, the highest level in 40 years. Microsoft will regain its place as the largest company in the index by market capitalization, taking Apple's place. Nvidia overtook Amazon to jump to third place. The overall weight of the technology sector will reach 36.1%, the highest in the history of the index. (China Securities Journal)
◆ [Big news from the super track! ] Argentina will increase lithium production by 79% per year]
According to a report by Bloomberg on the 29th, four new lithium projects in Argentina will be put into production in the next few weeks to months, which will significantly increase Argentina's annual lithium production capacity by 79% to 202,000 metric tons of equivalent. Argentina is the world's largest lithium resource reserves, with proven lithium reserves of nearly 19 million tons, accounting for about 21% of the world's total reserves. (Brokerage China)
Data source: Wind, China Asset Management, various media, various brokerage research reports, as of 2024.06.30
Risk Warning: The above does not constitute a recommendation of individual stocks. This material is not intended as any legal document, and the views are for reference only and do not constitute a stock recommendation. All information or opinions expressed in the materials do not constitute final investment, legal, accounting or tax advice, and we do not make any guarantees for the final action recommendations in relation to the content of the materials. Under no circumstances shall the Company be liable to any person for any loss arising from the use of any content in this material.