The decline in this bear market is basically comparable to that of 2014 and 2018. And the previous two bear markets, coming out of the quagmire, were still triggered by some key fuses that were not so conspicuous at the time.
In 2014, the wave out of the bear market did not rely on economic repair, but on the comprehensive leveraged bull caused by the over-pre-currency policy.
From 2014Q2 to 2015Q3, the year-on-year GDP growth rate was %. Look at the PPI, from -0 in July 201487% went all the way down to -5 in August 20159%。
In the first half of 2014, macroeconomic growth has already come under pressure. In April and June, the PBOC implemented RRR cuts for specific financial institutions. In the second half of the year, the economic situation did not improve, but continued to decline, prompting the central bank to shift from targeted easing to full easing.
It was this larger-than-expected comprehensive interest rate cut that detonated the hot brokerage**, which in turn triggered a full-blown bull market.
In 2018, the leading factor out of the bear market was still not the economic recovery, but the major adjustment of the external monetary policy.
There are many similarities between 2018 and this year**. On the one hand, the Federal Reserve continued to tighten dollar liquidity, raising interest rates by 25bp on March 31, June 13, September 27, and December 20, respectively, and the federal benchmark interest rate increased from 15% to 25%。
On the other hand, China's "deleveraging" has led to a downward trend in macroeconomic performance. In 2018, the quarterly GDP growth rate was as follows: 5%。M1 growth continued to decline from 15% to 15%。In addition, macro indicators such as social finance and PPI also continued to decline.
And how did the market get up?
On January 31, 2019, the Federal Reserve held its first interest rate meeting of the year, decided to pause interest rate hikes, and promised that future measures would be carried out patiently and pay attention to the development of the economic situation.
It is precisely because of this **set the tone** that the global ** ushered in a wave of vigorous **, and even a bull market**, including A-shares.
Economically, China's M1 bottomed out by 04%, 2% in February, and 4 in March6%。Indicators such as social finance and PPI bottomed out in January of that year. But the good times did not last long, and a few months later, it declined again, showing a more obvious twists and turns.
To sum up, the fuse of the first two bear markets was monetary policy. Of course, the most important factor is that the market has fallen too deeply, and there is a huge momentum for valuation repair in itself.
This time, the market fell deep enough. Will this round of bank interest rate cuts be the fuse?
In my opinion, there is a certain probability.