The increase in A-shares in the last few trading days of 2023** has made many partners look forward to the coming year. After entering 2024, A-shares have continued to be weak and "not red" at the beginning of the year, and investor sentiment has fallen again.
Why did A-shares fall?
The factors affecting A-shares in the near future mainly include data less than expected, tight funds, policy strength still waiting to be relayed, market sentiment fluctuations, overseas ***, etc.
Economic data in December weakened seasonally and fell slightly short of market expectations.
Last week, the central bank continued to maintain liquidity in the open market, with a cumulative net withdrawal of more than 2,423 billion yuan, a record high. The marginal tightening of capital and the rise of RMB capital sentiment index have increased market worries.
Investors' position reduction and rebalancing behaviors have reduced market liquidity, which has suppressed market confidence and major indices to a certain extent.
Overseas, the Federal Reserve's interest rate minutes were hawkish and economic employment exceeded expectations, the interest rate cut transaction was revised, U.S. bonds bottomed out, the U.S. dollar index rose, and U.S. stocks adjusted.
Xiaotong can't ** when and at what point the perineum of A-shares will fall. Looking at history and data, there are two pieces of information that I would like to share:
1. "Not red at the beginning of the year" does not mean "not good all year round".
2. The bottom of A-shares has obvious characteristics.
The beginning of the year is "not red".
Almost all of them ushered in "spring**".
The beginning of the year is "not red", ≠ not the whole year
Haitong ** used the Shanghai Composite Index to portray *** found, from 2005 to 2023The situation of the beginning of the year has occurred 7 timesrespectively and 2022.
In the corresponding year**, 4 fell and 3 roseand 2022 fall and 2019 rise), not much different.
That is to say,The beginning of the year is "not red", ≠ not the whole year
After the beginning of the year, almost everyone is looking forward to the "spring".
From 2005 to 2023,After the beginning of the year, every year basically ushered in "spring**".And the range increase is more than 10%;When valuations are lower, spring** rises are even greater.
When valuations are low and policies are warm, the whole year can be expected
The beginning of the year has little to do with the whole year, the key lies in the location of the year and the policy environment at that time.
When the valuation is low + the policy atmosphere is warm, after the beginning of the year, the whole year** is still expected.
For example, the Shanghai Composite Index started the year unfavorably, but the whole year was different. 3%。
Analyzing the three "not red" and year-round years, it can be found that:
a. At the beginning of the year, the valuation was at a historical low:
At the beginning of 2012, the Shanghai Composite Index PE (TTM, THE SAME BELOW) was at a low to a high of 02% quantile.
At the beginning of 2014, it was 05% quantile.
At the beginning of 2019, it was at the 13% percentile.
b. There is policy support:
From the end of 2011 to the beginning of 2012, the central bank cut the reserve requirement ratio twice.
In 2014, the PBOC created PSL to support the monetization of shantytown reform.
At the beginning of 2019, the central bank lowered the reserve requirement ratio and the Shenzhen Reform Commission decided to set up a pilot registration system for the science and technology innovation board.
To sum it up:
From 2005 to 2023, the Shanghai Composite Index did not start the year and had little to do with the final year of the yearOn the contrary, because of the short start of the year, there may always be opportunities in the first quarter.
Compare this to the present:
From the perspective of valuation, the valuation level of A-shares has been in the bottom area, and the cost performance may be more prominent.
The central bank restarted PSL to stabilize growth, and fundamental repair is expected to promote the recovery.
The end of the Fed's tightening cycle may boost the risk appetite of A-shares, and foreign capital is expected to gradually flow in, supporting the upward trend of A-shares.
The bottom of A-shares is distinctive
Depression or present
Huaxi ** analyzed the data from 2006 to the present, from three dimensions and 12 indicatorsAt present, the bottom characteristics of the a** field are more obvious(Unless otherwise specified, the following data are from Wind and Huaxi**).
Trading sentiment
1. Turnover
Historically, the trading volume of A-shares in the bottom range has usually shrunk by more than 25% from the previous high, and the quantile has usually shrunk by more than 30% from the previous high in the past three years.
At present, the A-share turnover (MA10) at the end of December 2023 will drop to 700 billion yuan, a decrease of 39% from the previous highThe three-year quantile of turnover was 4%, down 82% from the previous high, in line with the characteristics of previous bottoms.
2. Turnover rate
The decline in the quantile of market turnover rate in the bottom range of previous times is usually significantly lower than the previous high. At present, the A-share turnover rate (MA10) has dropped to 0 at the end of December 20239%, located in the 4% quantile in the past three years, and the quantile fell by 43% from the previous high, which is more consistent with the characteristics of previous bottoms.
3. Proportion of strong stocks
Take the **price above the annual line** as a strong stock.
When A-shares account for more than 90% of the total, the index tends to be at the top of historyAt the bottom of the market, the share of strong stocks is usually significantly lower than the previous high.
At present, the proportion of strong A-share stocks at the end of December is about 28%.
4. A new low ** proportion
At the bottom of the previous market, the proportion of A-shares hitting a 240-day low** has often increased significantly.
In the course of this round of market adjustment, A-shares hit a 240-day low**, accounting for 29% of the 2023 high, which is higher than the average of previous bottoms.
Valuations are compared to broad asset classes
1. P/E ratio
In previous bottom ranges, investors' risk appetite is low, which usually corresponds to lower index valuations.
At present, the price-to-earnings ratio of Wind All A at the end of December was 16 times, close to the previous bottoms.
2. Proportion of broken net**
The proportion of market ** is usually accompanied by an increase in the proportion of broken net**, and the proportion of the whole market in the bottom range is usually more than 7%, and this proportion is prone to short-term upward movement.
At the end of December 2023, A-shares broke the net** accounted for 8%, which was near the average of previous bottoms.
3. Risk premium
The high of the risk premium often corresponds to the periodical low of the index.
Taking the CSI 300 risk premium (1 CSI 300 P/E ratio - 10-year treasury bond yield) as an example, the risk premium in the previous bottom range has reached more than 5%, which is above the 90% quantile in the past three years, and exceeds the average of the past three years by one standard deviation (except for January 2016).
At the end of December 2023, the CSI 300 risk premium once exceeded 69%, located in the 96th percentile of the past three years, close to the three-year average +2 times the standard deviation, and close to the bottom of the previous market.
4. The difference between stock and bond returns
In the previous market bottom range, the return spread of CSI 300 stocks and bonds has broken through the average of -1 standard deviation in the past three years, and approached or exceeded -2 times standard deviation.
In December, the yield spread between CSI 300 stocks and bonds fell to 075%, which is lower than the average of -2 times the standard deviation in the past three years, in line with the characteristics of previous market bottoms.
Investor Behavior
1. The number of new accounts opened
Investors' risk appetite has often declined significantly in the previous bottom range**, with the number of new accounts opened on the Shanghai Stock Exchange at the market lows in 2008, 2012 and 2015 falling by more than 50% compared with the previous highs.
Since the second half of 2023, the number of new accounts opened on the A-share Shanghai Stock Exchange has declined as a whole, and it is still at a low level in the past three years.
2. The scale of new hair
At the bottom of the market, equity public offerings** are usually at the freezing point.
For the whole year of 2023, a total of 270 billion shares of equity** were issued, down from 370 billion in the same period of 2022 and far lower than the 1,624 billion in the same period of 2021.
3. Increase in industrial capital
Historically, at the bottom of the market, the willingness of industrial capital has declined.
At present, the net scale of industrial capital in December fell to 4.4 billion yuan, and the net scale slowed down significantly from the beginning of the year, accounting for 003%, the lowest since 2020.
4. Repurchase of listed companies
Historically, near the bottom of the market, the buyback momentum of listed companies has increased.
In the fourth quarter of 2023, the number of repurchase plans of listed companies has increased significantly, of which the amount of repurchase plans in October will reach 27.7 billion yuan.
A-shares are weakening at the moment, but the market may not be as pessimistic as the index reflects the trend. A big bothersome could beLack of confidence, emotional suppression, mixed with irrational killing.
From a historical point of view, "not red at the beginning of the year" ≠ not good for the whole year, and even in the previous years when the year was not red, most of them ushered in the "spring**" If the valuation is low + policy blessing, the whole year may still be expected.
Judging from the data, the bottom characteristics of A-shares are more obvious.
In the "bottom" area of the market, some people see "bearish" and downward levels.
Someone saw it"Premium Company Discounts", "Cheap Chips" and "** Accumulation". Because the bottom area means that many targets have fallen to the depression, the momentum may be brewing, and it is expected to become stronger and stronger.
At this time, it may be necessary for investors to "go against human nature", maintain a normal mind to deal with **, and accompany high-quality assets to "boil" together.
The long-term vision is rational and depressing. Because beauty is in the future, and there will always be suffering in the present.
But the longest road has an end, and the darkest night will welcome the morning. Life can't be as good as we think, and it's hard to be as bad as we think.
Most of the investor's money is actually made in a weak market, but they don't realize it at the time.
Davis double-clicked the inventor
Shelbye Colon Davis.
Key references.
1, Haitong** "How do you think about not being popular at the beginning of the year?".》20240105
2. Huaxi** "Review of the Characteristics of Several Rounds of A-share Grinding in History" 20240106