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wrote a column · Aug 2, 2023 14:23

Wave-like development and tortuous advance｜Weekly Investment and Research Views

Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Investment and research views
1. Institutional views
Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns
The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value.
2. Market review
A-share
Stock indices rose last week. The Shanghai Composite Index rose 3.42% in a week; the Shenzhen Stock Exchange Index rose 2.68% in a week; the GEM index rose 2.61% in a week; the Shanghai and Shenzhen 300 Index rose 4.47% in a week; the US Dow rose 0.66%; London Gold is now down 0.1%; ICE oil rose 3.97% last week; and the US dollar fell 0.51% against the RMB.
Most of the industry rose last week. Real estate, non-bank finance, steel, etc. rose sharply, while media, electronics, communications, etc. declined significantly.
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Bond
Last week, China's 10-year treasury bonds rose 2.4 bps, US 10-year treasury bonds rose 11 bps, and the China-US ratio difference fell 8.6 bps.
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Interpretation of key news
1. Economic waves are developing, and macroeconomic policy regulation and control efforts are being strengthened
The 7.24 Politburo meeting confirmed that “the national economy continues to recover and the overall recovery is improving” in the first half of the year, but pointed out that “the current economic operation is facing new difficulties and challenges,” and set the tone for “economic recovery is a process of wave-like development and tortuous progress,” indicating that next, it is necessary to “step up macroeconomic policy regulation and focus on expanding domestic demand, boosting confidence, and preventing risks.”
Regarding real estate and capital markets, the conference stated that it is necessary to “adapt to the new situation of major changes in the supply and demand relationship in China's real estate market, and adjust and optimize real estate policies in due course.” At the same time, a new arrangement for “mitigating local debt risks” was added, which specifically proposed “revitalizing the capital market and boosting investor confidence.”
Looking at the marginal improvement of the policy tone as a whole, with more active and more emphasis on implementation, market risk appetite may be boosted to a certain extent.
As for A-shares, considering macroeconomic policy arrangements, the domestic economy and confidence are still recovering in an orderly manner. Liquidity is relatively abundant, and composite valuations are at historically low levels. We think we can be moderately optimistic about the future market. In terms of style, with high interest rates overseas and slow domestic economic recovery, we are relatively optimistic about large blue-chip sectors with undervalued and high dividends.
2. The Federal Reserve maintains a hawkish stance, but Powell signals a turn
The Federal Reserve restarted interest rate hikes as scheduled in July, raising interest rates by 25 BP to 5.25-5.5%. There was almost no change in the post-meeting statement from the previous one.Powell also maintained a hawkish attitude at the press conference, saying that interest rates may be raised again in September。
Powell stressed that “the full impact of interest rate hikes is yet to be seen,” considering that “core inflation is still quite high, and long-term inflation expectations are still deeply entrenched,” so “interest rates need to be kept at a high level for a period of time.” Furthermore, he also specifically pointed out that “interest rate hikes and contractions are independent of each other, and the Federal Reserve may cut interest rates while downsizing.”
However, because “monetary policy is becoming more restrictive, and the risks faced have increased,” compounded by “inflation has been mitigated to a certain extent, and nominal wage growth is already showing signs of slowing down.”Powell has also released some steering signalsIt said “the Federal Reserve can stop raising interest rates before inflation reaches 2%,” and mentioned that “some FOMC members expect to cut interest rates next year.”
In our opinion,The current round of the Fed's monetary tightening cycle may be longer than expected by the market. Based on experience, it is not advisable to “overtake a corner” too soon before the Fed actually switches。
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Asset allocation:
The major asset allocation recommendations for August are as follows:
Investment and research views 1. Institutional views Haiyin Research Institute: Expanding demand, boosting confidence, and moving forward in waves and twists and turns The Shanghai Stock Exchange bottomed out and rebounded 3.42% last week. Among them, sectors such as real estate, insurance, and brokerage registered higher gains, while the Internet, education, communication and cultural media declined higher. The Politburo meeting of the Central Committee last week pointed out that the operation of the economy is facing the difficult challenges of “insufficient domestic demand, difficult operation of some enterprises, many hidden risks in key areas, and a complex and severe external environment”, and emphasized the need to “step up macroeconomic policy and focus on expanding domestic demand and boosting confidence,” “giving full play to the role of aggregate policy and structural monetary policy tools”, and “adjusting and optimizing real estate policies in due course”, which showed the determination of senior management to “stabilize the economy” and inject a “strong needle” into the market. Overseas, the Federal Reserve continues to be “hawkish,” raising interest rates by 25BP in July, and the federal funds target interest rate increased by 5.25%-5.5%, but it also indicated that it will not see a recession in the short term. Whether judging from valuation or potential policy expectations, there is still no shortage of upward momentum for A-shares. We continue our “volatile upward” market judgment and neutral configuration suggestions. In terms of style, it is recommended to focus on the blue chip market. On the industry side, we maintain our focus on “medium special evaluation,” “AI,” and “domestic substitution.” As for the “consumption” and “transportation” sectors, after nearly a year and a half of adjustments, they already have configuration value. 2. Market review A-share Last week's stock index...
Disclaimers:
Source: Haiyin Research Institute
This report was produced by Haiyin Wealth Management Co., Ltd. The information in this report comes from publicly available materials and information, but Haiyin Wealth Management Limited (hereinafter referred to as “Haiyin Wealth”) does not guarantee the accuracy and completeness of this information and information. The information, opinions, etc. in this report are for investors' reference only and do not constitute bids or levies for the securities transactions described. This information or opinion does not take into account the specific investment purpose, financial situation, or specific needs of the person receiving this report, and does not constitute a personal recommendation for anyone at any time.
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Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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