Hot spots: Last week, the Shanghai Index was four consecutive yang, repairing the 2900-point mark, and the big blue chips took turns to become a strong support for the market. What is your view on the market?
Interpretation:
Overall, the Shanghai Composite Index closed up 275%, the Shenzhen Component Index and the ChiNext Index closed down respectively. 92%, of which the Shanghai Stock Exchange 50 performed well, with an increase of 316%, CSI 1000 and CSI 2000 closed down, the first stocks performed well, and the weighted sectors were obviously driven, which formed a supporting role for the market.
Data**: wind
As for why the market rebounded, first of all, the central bank's larger-than-expected RRR cut was a catalyst for market sentiment to improve. On the other hand, the management will include market value management in the performance appraisal of the heads of central enterprises, in addition to improving the efficiency and profitability of business activities, market value management methods such as increasing holdings, repurchases, and increasing dividends will further improve efficiency. Try to refer to the first-class person system of American companies, business performance and reward options to drive the market value development of American companies. In this way, from the perspective of operation, it is conducive to driving the central state-owned enterprises to strengthen their competitiveness, improve the return on investment from the perspective of investors, and further play their role in the national economy. Compared with the sector, the valuation advantages of central state-owned enterprises in the fields of petroleum and petrochemical and building materials are significant, so the big blue chips are the first to get the attention of funds. The subsequent wave of reform of state-owned central enterprises cannot be ruled out to continue, spreading from the traditional manufacturing industry to other low-valuation "medium and special valuation" segments.
Furthermore, the current market improvement is also inseparable from overseas positive factors. Last week, the markets of advanced economies such as the United States and the euro area remained strong, but Japan and India in the Asia-Pacific market failed to extend their strength, and A-shares rose along with developed markets. At the same time, we found that the call option position of iSHARE China ** share ETF (FXI) has risen sharply in the past few weeks, coupled with the sharp increase in the share of CSI 300 ETF last week, which means that RMB assets have attracted the attention of international funds, which is worth pondering for investors.
Hot spots: The first manufacturing PMI indicator since 2024 will be released this week, overseas, the Federal Reserve interest rate meeting is about to be held, and the market will once again focus on Powell's attitude, will this affect the rebound of A-shares? What do you think about February?
Interpretation:
This week, in the face of the announcement of the manufacturing PMI, the market is concerned that, first, the past data reflects that it is still at the end of the active destocking stage, at this time the service industry and Caixin PMI are still bright, indicating that the demand for services and small and medium-sized enterprises is relatively good. Therefore, whether this kind of demand can be transformed into new demand in the manufacturing industry at this time will be the key factor for whether the PMI data of the manufacturing industry can recover above the boom and bust line. It is worth noting that in the short term, investors should pay attention to the Spring Festival phenomenon to judge its impact, perhaps due to the impact of the Spring Festival shutdown. Second, compared with the purchase of major raw materials, the first consecutive months have been maintained above the boom and wither line, and the performance of the factory is relatively sluggish. Correspondingly, the PPI decline in the self-price index converged faster than the CPI. Nowadays, the central bank cuts the reserve requirement ratio with the intention of reducing the financing cost of the real economy, and the synchronous decline in the real financing rate in the future needs to be combined with the CPI, and it is advisable to pay attention to the marginal changes at the first end for reference.
In addition, at the Fed's interest rate meeting this week, Powell is expected to continue his earlier expectation management and gradually correct market expectations for interest rate cuts. More importantly, the Fed may provide clearer details on the path to slowing its balance sheet reduction. It is worth noting that the Federal Reserve announced an increase in the interest rate of the Bank Term Financing Program (BTFP) and intends to close this funding window in mid-March this year, which means that US commercial banks no longer have room for arbitrage and return to the traditional discount window tool to meet their daily liquidity needs. Importantly, when using BTFP, collateral such as U.S. Treasuries is calculated at par value, while the discount window is calculated based on the market value of the collateral. At present, the issuance of a large number of U.S. bonds, coupled with the Fed's expectation of reversing interest rate cuts, U.S. bond yields may return to high levels, resulting in a decline in the market value of U.S. bonds, which will strengthen the impact of tightening liquidity of U.S. commercial banks.
Data**: wind
Therefore, the lag effect of overseas high-interest rate monetary policy may gradually appear, and the need for the Fed to slow down the shrinkage of its balance sheet to cope with the supply shock of U.S. bonds has increased, and the indirect direct impact is to simultaneously raise the value of the dollar. In particular, in the year of the United States, in the face of the dilemma of loose fiscal requirements and high interest rates, the Federal Reserve needs to cooperate with the Treasury Department. In this way, the first level of U.S. Treasury yields will continue to suppress the performance of the growth sector, and in the face of overseas disturbances, the value style of the A** field is better than growth, and the game of funds around the reform of central state-owned enterprises is expected to continue, and investors should pay attention to structural diffusion opportunities.
Hot Spot: The Bank of Japan continued to "hold its ground" in January, keeping interest rates unchanged, but short-end Japanese bond yields climbed sharply, what important information is implied? In the face of the dollar-yen exchange rate approaching the 150 mark again, what will the Japanese authorities do? What are the implications for investors?
Analysis:
The January interest rate meeting kept the interest rate unchanged, but then the Japanese bond exchange market staged a "roller coaster"** The reason is that after the interest rate decision, the Bank of Japan governor said that if the ** target is in sight, he will consider whether to continue to buy ETFs, indicating that the interest rate meeting "dove with eagle", exacerbating the volatility of Japanese assets, while the market expects the Bank of Japan's monetary policy or about to turn.
In terms of domestic demand, Japan's CPI excluding fresh food and energy increased by 37% for a total of 26%, although it has fallen from November, the nominal growth rate of wages in Japan has continued to expand, the year-on-year decline in real wages has narrowed, and the increase in household income will stimulate the expansion of consumer demand, and the phenomenon of wage and inflation spiral has gradually emerged. Consumer demand will help inflation rise, indicating that the upcoming wage "spring fight" will require higher wage growth, and Japan's domestic demand momentum will continue to recover. In terms of exports, exports for the whole of 2023 hit a new high due to the depreciation of the yen against the US dollar in 2023. In particular, the export growth rate accelerated in December, the demand for replenishment in the United States heated up, and the growth rate of Japan's exports to the United States maintained growth for 27 consecutive months. At the same time, Japan and China are active in the field of chip manufacturing equipment, and the semiconductor cycle has entered the bottom range, and the recovery of demand in the future will support the export-oriented Japanese economy.
Data**: wind
In summary, the Japanese economy is in a moderate state of recovery, nominal wage growth, inflation is above the policy target level, and monetary policy may be about to turn. It is worth noting that, first, if the Bank of Japan's monetary policy normalizes, Japan's interest rates rise, and the interest rate gap with overseas developed economies narrows, or promote the return of investment from Japan's overseas capital, the yen will enter an appreciation cycle, and at the same time increase the risk of overseas asset volatility. Second: At the time of monetary policy normalization, the peripheral developed economies have shifted from the discussion of interest rate cut schedules to the schedule mode, inflation is not easy for Japan, and the time and progress of embracing inflation seems to be longer than that of other economies. In the face of turmoil, the People's Bank of China sharply cut the reserve requirement ratio by 05%, demonstrating that the monetary policy is based on me and promotes the healthy development of the economy. At the same time, the offshore RMB overnight lending rate has rebounded sharply, indicating that the attention of RMB assets is increasing, and the allocation value of Chinese assets is increasing.
This article only records the views and experiences of Yang Boguang (license number: S0340619060008), and does not represent the position of the institution he works for. The views and statements published do not constitute investment advice to any person or organization and should not be used as a substitute for the independent judgment of investors. Investment is risky, and you need to be cautious when entering the market.