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A share small rise and fall, how the future trend, need to pay attention to these 4 key points

author:Choi is clear

At present, this market is still in turmoil, and what will happen in the future is what everyone cares about.

We conduct an in-depth analysis from the following 4 key points, and you will understand whether you should hold or increase your position, or leave the market.

01, macroeconomics

First of all, the current macroeconomic policy is relatively friendly to the stock market.

Liquidity is a topic I've been talking about since Last November, when I judged that there might be a RRR cut around the Spring Festival, but I didn't expect it to be so fast, and it fell in early December. I also judged that there was a possibility of a rate cut, and the benchmark rate has not yet been cut, but the LPR has been cut twice, once in December and again in January.

It should also be noted that in terms of real estate, I have also said in the live broadcast before that the real estate policy has been loosened, and stable growth is in many aspects. These are all reflected in the stock market.

Another point is that inflation is down, which is actually quite fortunate.

The CPI was below 1 before, then, for the first few months, rose to 1-2% for two consecutive months, and then it's down again. There was a time before, the PPI was relatively high, and in recent months, it has begun to gradually go down.

Why do I think a downturn in inflation is a good thing?

Imagine what the central bank could do if inflation were high right now? A rate hike that could be forced, if it were, could have a big impact on the stock market as a whole. The U.S. is now ready to raise interest rates, and the impact on the stock market is already very large, so if our inflation is relatively high, we may have to raise interest rates, or at least tighten liquidity.

Fortunately, inflation is now going down, so there is still a lot of room to ease liquidity.

During this time, six major banks in Guangzhou have successively reduced the interest rate of the first home loan by 20 basis points. The previous first home rate, which was about 5.6, is now around 5.4, which should be a good phenomenon.

A share small rise and fall, how the future trend, need to pay attention to these 4 key points

02, low valuation

The second aspect is to look at the current valuation level of the stock market.

Now the Shanghai Composite Index is more than 3400 points, in the history, is it high or low?

If you only look at the number of points, it is actually a relatively high level. The past time to exceed 3400 points is not long. But if it is replaced by valuation, it is now at a relatively low level.

Compared with the current 3400 points of the Shanghai Composite Index, compared with the 3400 point time period of several times in history, the price-earnings ratio of the Shanghai Composite Index CSI 300 Index or the CSI 500 Index is at the lowest level.

So, the risk is now much lower than the previous 3400.

In this regard, you can check the relevant data, and there is a more detailed analysis in my other article.

A share small rise and fall, how the future trend, need to pay attention to these 4 key points

03, foreign capital inflow

There is also a more interesting phenomenon, if we only look at the dollar index, this year is a continuous appreciation, but the exchange rate of the renminbi against the dollar, but it shows that the renminbi is also very strong, but also in appreciation.

The appreciation of the dollar lies in the previous desperate release of water, and now it has begun to tighten the faucet, and in the process, the dollar will definitely appreciate.

Last June, still below 90, it is now below 96, and when it was a little higher, it was at 97. At present, the United States has not raised interest rates, but is only reducing the purchase of bonds, and the dollar index has been rising, which means that there will be a large amount of capital flow around the world.

In emerging markets, selling their currencies and buying the U.S. dollar is a fatal problem for emerging markets – capital outflows. At that time, the asset bubble may burst, and the price of assets such as the corresponding stock market and the property market will fall sharply.

If, in the course of the dollar's appreciation, the renminbi depreciates like other emerging markets, the same problem may arise.

However, the renminbi did not significantly depreciate against the dollar, which became a good opportunity.

When money flows out of some other places, it may flow to the United States, but it can also choose to flow to China, because the exchange rate appreciates the same, the economy is relatively stable, and there are good investment opportunities.

Over the past year or so, the inflow of foreign capital has been larger than in any previous year.

There are also many funds flowing into the stock market, and northbound funds continue to flow in, which is also a strong support for the stock market.

A share small rise and fall, how the future trend, need to pay attention to these 4 key points

04, emotional lows

I have come up with an effective way to use new funds to look at market sentiment.

In February, the largest of the newly established funds was a new fund of He Shuai of the Bank of Communications, which was only 2 billion; Lin Yingrui's performance in January was OK, but his new fund was only 700 million; Luo An'an in the south was more than 600 million, and Harvest's Wang Yuanyuan was more than 400 million. Overall, fund issuance is not very good.

By the 21st of February, a total of 43 new funds had been established, of which 16 were actively managed equity funds, only half the number compared to February last year.

The size of the newly established funds is 16.7 billion, equivalent to 7% of the same period last year, a cliff-like decline; the average size of the newly issued funds is less than 500 million, compared with last year, it is only 21%.

All this shows that the sentiment in the market has now reached a relatively low point, but this is exactly a signal for the market to rise.

After the first few new fund lows, the market has started to rise.

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