Key takeaways:After the beginning of the year, there was a more obvious adjustment in the market, and the running trend chart of the Wind All A Index, Wind All A returned to the support line of the lowest edge of the most upward channel. It was also the mid-term bottom level of July 2005, November 2008, November 2012, October 2018.
Based on our previous summary of historical outsole signals, we found that:
First, the current growth rate of new social finance and economic entities has turned positive, which is expected to gradually confirm the bottom of this round of profit cycle. In 2024, ** expenditure is expected to increase, real estate stabilization policies continue to exert force, external demand is expected to improve, corporate profit margins will return to a relatively high level, and profits are expected to return to an upward trend in 2024. After the disclosure of the annual report performance forecast, the market is expected to gradually form an expectation of a profit inflection point.
Second, the price-to-book ratio (PB) of A-share non-financial petroleum and petrochemical companies has returned to the lowest level in history, and the PE TTM will further decrease with the gradual disclosure of results.
Third, the marginal relief from external liquidity has eased, and adjusted Treasury yields have fallen outside the danger zone.
Fourth, the turnover rate in the early stage has been significantly reduced, and the transaction volume has shrunk significantly. After a rapid** and rally this week, the market's passive trading behavior may gradually come to an end. This.
In addition, we expect the dividend yield risk spread to become a new bottom signal in the future, with the CSI 300 dividend yield spreading widening to 70bp relative to the 10-year Treasury yield. On the whole, the signal of forming a medium-term bottom is gradually emerging this week, and the probability of the market seeing a medium-term bottom is further increasing.
In the future, we believe that as concerns about economic growth gradually ease, the previous style of bias towards defensive value and bias towards small-cap stocks will be more balanced, and the weighted sector is expected to usher in **, and the growth style is expected to usher in valuation repair after the end of the earnings disclosure period. In terms of policy support, scientific and technological innovation has become the most important direction of policy support. ** The opportunities presented by more powerful fiscal spending are also worth watching. Judging from the recent macro changes, the pan-technology chain, export chain and first-class expenditure chain under the general trend of intelligence are expected to become important clues for the industry layout next year. At the industry level, there are mainly electronics, machinery, etc., which are superimposed by AI technological innovation and export improvement; **Investment opportunities in the fields of industrial metals, building materials, home appliances and furniture brought about by the increase in expenditure, increasing support for real estate, and the start of the three major projects. These sectors have also been the focus of our strategy since our annual strategy report.
Key takeaways:
In 2024, the domestic economy may be repaired in a zigzag manner
The domestic economy in 2023 may be comparable to 2013, with weak and unsustainable economic recovery. Looking ahead to 2024, we believe that A-share earnings are expected to recover upward, and the non-actual net profit for the whole year may turn positive, but the elasticity may be weak and the process performance is more tortuous. Specifically: (1) from the perspective of consumption, the performance of domestic demand is weak, behind which is a long-term cyclical problem; (2) The core influencing factor of external demand in 2024 will still be the global economic cycle; (3) Weak domestic demand inhibits the production willingness of manufacturing enterprises, and the overall recovery elasticity in 2024 is limited; (4) From a long-term perspective, with the solution of real estate problems, its investment will return to a reasonable level; (5) Counter-cyclical regulator: it has certain support for the economy, and the short-term effect may be relatively limited.
2024 A** field liquidity or "n-type" repair
1. Domestic liquidity: wait for the monetary shift to "easing". 2. Overseas liquidity: the overall trend is loose, and there may be impulses in stages. It is expected that there will be two impulse effects: (1) a substantial interest rate cut, or lead to a short-term liquidity trap (lasting less than 1 quarter, with a high probability); (2) the rise of credit risk may lead to a liquidity crisis pulse (periodic shock, low probability); 3. The annual liquidity presentation: Q1 easing, Q2 tightening, Q3 marginal recovery, Q4 easing rhythm (soft landing of the U.S. economy). If the U.S. economy makes a hard landing, it may trigger credit risks and impact Q4 liquidity, but it is only a temporary and will not change the trend of market liquidity recovery.
2024 a** field research and judgment: want to promote and suppress first
1. Is the A-share adjustment cycle over? The price-performance index cannot judge the bottom of the market, cheap has never been the reason, and there is still the possibility of readjustment in the future；2. Q1: If the monetary policy turns to "loose" at the beginning of the year (with a high probability), the "spring restlessness" will guide this round of *** into the "main rising wave"; 3. Q2: The global economy may resonate downward, superimposed on the tightening of liquidity, and maintain a cautious attitude; 4. Q3: Overseas liquidity trap is lifted, and A-shares have the best conditions to open under the joint drive of domestic and foreign liquidity5, Q4: The domestic economy gradually enters the early stage of recovery, if the U.S. economy has a soft landing, A-share reversal will open, and it may even be the starting point of a new round of bull market; If the U.S. economy has a hard landing, the credit crisis may have a phased shock, but it will not change the reversal trend.
Key takeaways:The development of Chinese-funded US dollar bonds can be divided into five stages, with the opening up of the capital market and the low interest rate environment giving rise to financing needs. Following the introduction period (1986-2009), the rapid development period (2010-2014), the full-scale outbreak period (2015-2017) and the fluctuating development period (2018-2021), since 2022, the rising interest rates of US bonds and the frequent defaults of Chinese US dollar bonds have led to sluggish market subscription sentiment, a sharp decline in the willingness to issue foreign bonds, and a negative net financing.
2023 Chinese USD Bond Review**: The 23-year China USD Bond Index showed a downward trend and then an upward trend, recording positive returns for the year, with investment-grade bonds performing better and the High Yield Bond Index declining significantly. From the perspective of different industries, urban investment bonds, financial bonds, and real estate bonds. The yield to maturity of financial dollar bonds revolved around [7.] throughout the year50%，10.20%] range, the year-end yield to maturity fell sharply, and the index recorded a slight positive return; The annual yield of real estate dollar bonds rose, the interest rate spread widened as a whole, and the index fell sharply; From January to October, the yield to maturity of urban investment dollar bonds was basically consistent with that of Chinese dollar bonds, and after the implementation of the bond policy in October, the yield to maturity of urban investment dollar bonds fell sharply, and the performance of Chinese urban investment dollar bonds was outstanding throughout the year.