Introduction Monday's decline, not simply A-share decline, Asia-Pacific stock markets, European stock markets have a relatively deep decline, Monday's decline is global, and A-share decline is mainly dragged down by external factors.
On March 7, the Shanghai Composite Index fell 2.17%, suffering three consecutive declines; the ChiNext Index plunged 4.3%, hitting a new low in nearly a year. Hong Kong stocks, which are more sensitive to geopolitical risks, have fallen below the "epidemic bottom" in March 2020.
What is the root cause of the A-share plunge? Can the main line of "steady growth" investment still be adhered to?
The news that the United States is considering an embargo on Russian oil on Monday has raised concerns about global stagnation.
"Monday's decline is not simply the fall of A-shares, the Asia-Pacific stock market and the European stock market have a relatively deep decline, Monday's decline is global, and the decline of A-shares is mainly dragged down by external factors." Since the beginning of this year, external factors have been negative, but the internal factors are positive, especially this year's GDP growth target of about 5.5%, which is a strong support for the market.
At present, the number of investors in the A-share market has exceeded 200 million. For investors, how do they need to "act" at the moment?
In this regard, the current valuation level of the position of A shares is not high, look at the long term, the probability of making money in the current position is still very large.
External causes are negative, internal causes are positive
Fed interest rate hike expectations and the Ukrainian crisis continue to ferment, are the two major external factors that have dragged down A shares in the near future. However, the Shanghai and Shenzhen stock markets fell sharply on Monday, and where did the newly emerging bearish factors come from?
Since the beginning of this year, the external influencing factors of the A-share market have been negative. The news that the United States is considering an embargo on Russian oil on Monday has raised concerns about global stagnation.
Crude oil is the most core pricing support among commodity prices. If the price of crude oil keeps rising, it will drive up the price of commodities.
So concerns are reflected in the global market. Not only A-shares fell, but also the Asia-Pacific stock market fell, the Japanese stock market fell by about 3%, the European stock market also fell deeper, and France and Germany fell by about 2%. The decline in A shares is more dragged down by external factors.
In addition to external factors, the internal factors affecting A shares are positive or negative?
The internal factors are positive. This year's government work report proposes a GDP growth target of about 5.5%, which exceeds expectations. Previously, the market generally expected to be between 5% and 5.5%, that is, the current target is set on the "upper edge" of market expectations. For the market, it is a positive factor.
The factors that affect the market are integrated. In the short term, the external negative factors are larger, mainly because the uncertainty is too large, and everyone will have a certain panic in their hearts. Short-term market adjustment, also because of this uncertainty, can not grasp the direction, there are certain concerns about the direction of the situation to get out of control.
Jumping out of this external factor, if you look at it in the long run, the A-share market has been disturbed by many external factors over the years, but in the end, it is still a return to the internal factor decision.
At present, the valuation level of A-shares is not high, and the PE value of all A-shares is only 18 times, and the PE value of the CSI 300 is only about 13 times. From this factor, it is at a low level in the long run, and this position is supported by a strong valuation.
If the final GDP target can be achieved by 5.5%, the profit growth of A-shares can still be more than 5%, and the CSI 300 can have 7%. Strategically, we must strengthen confidence.
From the data, can you see the obvious outflow of funds or the negative feedback chain?
As the Crisis continues to ferment, there is great uncertainty, so investors show some concern. The reason why the capital markets have reacted more violently is also because of the uncertainty, including the progress of the Russian-Ukrainian conflict itself, the impact on the global economy and inflation, and the possible direct and indirect impact on China.
From the perspective of foreign capital outflows, I don't think we need to worry too much. From the northbound funds to observe, monday outflow scale of more than 8 billion. The short-term net outflow of a few days is not terrible, from 2014 to the present, in terms of annual units, the northbound funds are net inflows.
Theoretically, the expectation of interest rate hikes in the United States is heating up, interest rates are rising, and the flow of funds to the United States is established, but in fact, the impact of outflows is not large, because at present, foreign capital is still low on A-shares as a whole, and most of the funds are still in other countries.
As for the negative feedback that may result from fund redemptions due to market declines, there is no data to confirm this. The current data release has a certain lag and needs to be further observed.
Follow the "steady growth" and the layout is long-term
At present, the external environment is complex, and internal factors are also uncertain. So from the perspective of investors, how to "act" at present? Is it a wait-and-see, or a layout?
It is difficult to grasp the short-term market, especially when it is impacted by external factors. So, a lot of times we need to think in the medium and long term.
For example, looking at the next two years, the current position of A shares is relatively low. In the long run, the probability of making money in this position is still very large.
If the funds are not in a hurry, they can withstand the fluctuations in the middle and focus on the long term, and may be able to obtain higher returns.
If it is now a place where you can go to layout, how to layout? We can see that in the past few years, the difference in returns has been huge when we "stepped on the wrong" sector or track.
The market will eventually return to fundamentals, and the biggest background this year, without a doubt, is "steady growth".
In the choice of industry, follow the "steady growth" to choose. However, it should be noted that "steady growth" is not simply equivalent to traditional industries. Over the past two or three months, we have been saying that finance and real estate are in the first echelon, and these two industries have benefited from steady growth. Finance and real estate already have certain relative returns.
We believe that the current "steady growth" can be a little larger, and some new infrastructure also belongs to the main line of stable growth, such as digital economy and photovoltaic wind power, which are the grippers of stable growth. Related to "steady growth", the future will be more certain.
"Steady growth" was already clear at last year's Central Economic Work Conference, from the perspective of the stock market, has this target expectation been digested?
imperfection. Before the market generally expected at 5%, and the government work report set about 5.5%, this medium and high-speed target, the market should not be fully expected.
Of course, the 5.5 percent target is certainly challenging, "it takes hard work to achieve it." However, from the perspective of historical laws, in the 32 years from 1990 to the present, except for 1990 and 1998, the real GDP growth in the remaining years has been able to achieve or exceed the expected targets set by the government.
In 1998, there were flood disasters and the Asian financial crisis, but the real GDP growth in that year was basically close to the expected target of the year, which shows that the expected target of GDP growth in previous years is of great significance for macro policy orientation and strength reference.
This year's national GDP growth target value is about 5.5%, higher than the two-year compound growth rate of GDP from 2020 to 2021 of 5.1%, which can be seen that the country's intention to stabilize growth this year is clear.
For the tools and means to achieve this goal, we will continue to track it, and it is expected that more powerful policy measures will be introduced.
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