In the recent fluctuations in the global financial market, the trend of the RMB exchange rate has attracted widespread attention. At one point, it fell below 73 important junctures, which has triggered market concerns about China's economy and financial markets. However, the RMB exchange rate has seen a strong ** recently, and the US dollar spot exchange rate has risen above 7 from the previous bottom1. This trend indicates that the market's pessimistic expectations for China's economy may need to be reversed.
Heavy Finance maintained the judgment in the annual report, believing that the over-rise of the US dollar was an important factor in the exchange rate fluctuations in the previous period. Since the Y Crisis, the U.S. has had worsening monetary credit and inflation problems, and the deficit has been ballooning. In contrast, the strengthening of the renminbi against the dollar reflects a reassessment of the direction of the U.S.-China economy by foreign investors. This trend has become more and more obvious as foreign investors continue to allocate A-shares and Hong Kong stocks after Christmas.
Recent high-frequency data has also seen a series of better-than-expected performances. For example, the profit data of industrial enterprises in November was better than expected, and the sales of second-hand homes in first-tier cities also showed a better-than-expected trend. In addition, the cut in the deposit rate also exceeded market expectations, which is expected to trigger further favorable policies such as RRR and interest rate cuts. Considering the impact of base effects, China's economic data is expected to continue to outperform the market's pessimistic expectations.
At present, China's economy is at the bottom of the inventory cycle, and the policy level emphasizes seeking progress while maintaining stability and promoting stability through progress. With the continuous improvement of follow-up policy strength and economic data, foreign capital and large-scale asset allocation funds will continue to flow into China**. This trend is undoubtedly a major positive for investors in the A** market.
* That is, the opportunity to get on the bus, the structure of the market is turning to the offensive!The core logic of this round of ** is that RMB assets and extremely pessimistic expectations will be significantly repaired. Cyclical assets based on stable growth and economic expected repair, technology assets based on the logic of industrial prosperity, and some high-quality over-falling assets will perform. Although high-dividend assets still have a large absolute return space in the medium term, it may be difficult for a purely high-dividend based defensive** allocation portfolio to outperform the market at this stage due to the relatively large relative returns in the previous period. Therefore, we suggest that investors at least need to consider the structure of "dividend + recovery" from defensive to offensive, or increase the proportion of offensive varieties on the basis of high dividend allocation to share the dividends of this round.
In summary, the strength of the RMB exchange rate** and a series of better-than-expected economic data suggest that the market's pessimistic expectations for the Chinese economy may need to be reversed. As policy efforts and economic data continue to improve, foreign capital and large-scale asset allocation funds will continue to flow into China**. This is an unmissable opportunity for investors in the A** market. When allocating assets, we recommend that investors pay attention to the performance of cyclical assets, technology assets and high-quality over-falling assets, and also pay attention to adding offensive varieties to the defensive ** allocation portfolio to share the dividends of this round.