Zhitong Finance APP learned that Cinda Securities released a research report stating that the cumulative increase of the Wonder Quan A Index in the past two months has been close to 20%. From the perspective of supply and demand, 's rapid rise often consumes funds at a very high rate and requires very strong buying power. The initial rise from bear to bull is generally a market for existing funds, because residents’ incremental capital generally needs to wait at least 1-2 years after the bear market ends. The current high probability is a sharp rise dominated by the replenishment of existing funds. The high point of V-shaped reversal will not exceed the highest point of the previous year, and it may also be the high point of the next year. In the short term, there is a high probability that the V-shaped reversal is not over yet. The current situation is similar to Q1 of 2019. There will be some short-term risks in July (interim report results, divergence of oversold rebound funds, downward commodity prices, and concerns about U.S. recession. etc.), the end point of the V-shaped reversal may be Q4, and then it will enter a volatile market.
currently recommends focusing on consumption growth, and in Q4 it is recommended to gradually shift to low valuations.
(1) is growing in the process of a quarterly rebound. The current stock market is in the process of a V-shaped reversal. Historically, it can be seen that no matter whether the subsequent outcome of this reversal is a bull market or a bear market, growth stocks will perform well during the rebound, which is generally quarterly. In nature, it can be compared to the rebound of GEM in Q4 of 2015, the rebound of TMT in Q1 of 2019, and the rebound of consumption in Q2 of 2021. It is recommended to pay attention to the military industry, media, Internet, and medicine. However, after the rebound, in Q4, the allocation ratio for growth needs to be moderately reduced.
(2) The logical deduction of consumption is not sufficient. After the epidemic, investors began to gradually expect the economy to recover. Once real estate sales are observed to improve, the stage of the economic cycle will change from expectations of steady growth to expectations of economic recovery, and consumption and other economic-related oversold sectors will also have Performance, this time the rise in consumption, due to the logic of demand recovery, may be more sustainable than the rebound in 2021. It is recommended to pay attention to consumption in the real estate chain (home appliances, home furnishings, and building materials).
(3) In the financial sector, non-banks will be a direction that can advance, attack, retreat and defend. If the value of dominates in the future, non-banks will have the most advantageous valuation chips among value stocks. If growth stocks continue to be active, non-banks will also benefit from the rebound in market risk appetite.
(4) Gradually turn to low valuation after Q4. Since the end of last year, the long-term (2-3 years) style of the market has turned. The periodic valuation restoration brought about by risk preference, liquidity, etc. is conducive to consumption growth. This deviation generally does not exceed half a year, from the end of the year to next year. It may initially regain value.
has risen so rapidly that it has occurred 5 times in total from 2012 to 2021, three of which occurred during the first wave of rise after the bear market ended (December 2012-January 2013, Q4 2015, Q1 2019), and twice Appeared in the middle and late stages of the bull market (December 2014-2015Q2, June-July 2020).
html’s 12-month increase of 20% mostly occurs in the first wave of rise after the end of a bear market or in the middle and late stages of a bull market. The cumulative increase of the Wind A Index in the past two months has been close to 20%. Such a rapid rise has occurred 5 times in total from 2012 to 2021, three of which occurred during the first wave of rise after the bear market ended (December 2012-January 2013, Q4 2015, Q1 2019), and two In the middle and late stages of the bull market (December 2014-2015Q2, June-July 2020). From the perspective of supply and demand, rapid increases often consume funds at a very high rate, requiring very strong buying power.
There are two main types of buying power: one is the rapid replenishment of existing funds positions after the bear market panic. At the end of 2012, the end of September 2015, and the end of 2018, due to the previous bear market being too long or too fast, some funds panicked and sold, and the stock market fell faster than the rate of earnings deterioration. Once the panic is over and investors gradually regain their rationality, the position replenishment speed will be very fast, because during the previous panic, the stock price fell faster than the profit decline, so when replenishing the position, it does not require a significant improvement in fundamentals. There can be quick valuation fixes.
Another force driving the sharp rise in the stock market is the large-scale entry of incremental funds. For example, in Q4 of 2014, Q2 of 2015 and June-July of 2020, this situation mainly occurs in the middle and late stages of the bull market, and most of them will only appear 1-2 years after the bear market has ended. Before the rise, investors' positions were not low, but due to the large amount of OTC funds, they could still rise at a very fast rate.
If it is a stock market, the high point of the V-shaped reversal will not exceed the highest point of the previous year, and it may also be the high point of the next year. The rise of A shares in the past two months has shown signs of foreign investment and increased insurance allocations, but these funds are small-level incremental funds, and the overall funding pattern of the stock market is still dominated by existing funds. Judging from the outcomes after the first wave of rises in the three bearish to bullish periods from December 2012 to January 2013, Q4 2015, and Q1 2019, none of them immediately changed the market pattern of the stock game. After the stock market completed the reversal, all Entered the annual shock market. After the reversal is completed, the high point of the reversal will not exceed the highest point of the previous year, and may also be the high point of the following year. The speed of earnings improvement in the subsequent year determines the magnitude of the retracement after a volatile market. After the end-2012 rally was complete, the February 2013 high was the highest point in the first half of 2012-2014. After the turbulent market in 2013, growth stocks did not retreat, and the main board retraced all gains. During this period, various economic indicators rebounded rapidly. The stock market soon ushered in a rebound in ROE. The ROE of growth stocks continued to improve. The main board retreated significantly due to the impact of the money shortage in June 2013. In Q4 of 2015, the high point of the rebound was the highest point from Q3 of 2015 to the end of 2017. After the rebound, almost all sectors hit new lows, and then entered the 2-year slow bull trend. The main reason behind this is that from Q4 in 2015 to Q2 in 2016, macro indicators continued to repeat in the bottom area, and the rebound in profit expectations was not confirmed until Q2 in 2016. In Q1 of 2019, the high point of the rebound was the highest point from April 2018 to February 2020. After the rebound was completed, it retraced half of the gains, and then entered a volatile market. During this period, macroeconomic expectations were repeated many times, and although profits continued to decline, the rate was very slow.
Based on the understanding of residents’ capital behavior, Cinda Securities believes that even if global interest rates start to fall again, the major inflow of residents’ funds will not start again until the middle of next year. Therefore, in this current V-shaped reversal, the highest point of the index may not exceed Q4 last year, and once the highest point is established, it may also be the high point in the next year.
short-term strategy: The second half of the year is similar to 2019, the overall situation has reversed, and there are some small risks in July. Cinda Securities believes that the bullish and bearish state of the stock market in the second half of the year may be similar to that of 2019. There has not yet been a trend improvement in profits, but due to the premature decline in valuations. The stock market will first have a valuation recovery, and then wait for the logic of profitability to be verified. The market will usher in a major rebound after each economic forecast worry is released (Q1, August-September 2019), and once it is verified whether earnings can improve, it is often lower than expected. In April, July and September 2019, In October, during the three quarterly report disclosure periods, the stock market was weak. Looking forward to the market outlook, in terms of direction, the second half of the year will be a reversal. In terms of rhythm, the market may have some risks in July, mainly due to the divergence in the performance disclosure of the interim report and the oversold rebound funds.
Industry configuration suggestions: currently recommends focusing on consumption growth, and Q4 begins to recommend a gradual shift to low valuations. (1) growth is in the process of a quarterly rebound. The current stock market is in the process of a V-shaped reversal. Historically, it can be seen that no matter whether the subsequent outcome of this reversal is a bull market or a bear market, growth stocks will perform well during the rebound, which is generally quarterly. In nature, it can be compared to the GEM rebound in Q4 of 2015, the TMT rebound in Q1 of 2019, and the rebound of consumption in Q2 of 2021. It is recommended to pay attention to the military industry, media, Internet, and medicine. However, after the rebound, in Q4, the allocation ratio for growth needs to be moderately reduced. The logical deduction of (2) consumption is not sufficient yet. After the epidemic, investors began to gradually expect the economy to recover. Once real estate sales are observed to improve, the stage of the economic cycle will change from expectations of stable growth to expectations of economic recovery. Oversold sectors related to the economy such as consumption will also perform. This time The rise in consumption, due to the logic of demand recovery, may be more sustainable than the rebound in 2021. It is recommended to pay attention to consumption in the real estate chain (home appliances, home furnishings, and building materials). (3) In the financial sector, non-banks will be a direction that can advance, attack, retreat and defend. If the value of dominates in the future, non-banks will have the most advantageous valuation chips among value stocks. If growth stocks continue to be active, non-banks will also benefit from the rebound in market risk appetite. (4) After Q4, it gradually turns to a low valuation. Since the end of last year, the long-term (2-3 years) style of the market has turned. The periodic valuation restoration brought about by risk preference, liquidity, etc. is conducive to consumption growth. This deviation generally does not exceed half a year, from the end of the year to next year. It may initially regain value.
Market changes this week
Most of the major A-share indexes rose this week, with Shanghai Stock Exchange 50 (2.37%) leading the gains. Shenwan's primary industries had mixed gains and losses this week, with coal (5.85%), commercial trade (4.75%), and building materials (4.36%) leading the gains, and automobiles (-3.70%) and electrical equipment (-2.47%) , Non-bank finance (-1.30%) performed weakly. Among the concept stocks , the pre-growth index (12.66%), lithium mine (9.27%), and beer index (6.45%) led the gains, while the Geely concept index (-6.42%) led the decline.
