On March 29 and 30, the Meeting of the Standing Committee of the State Council and the first quarter regular meeting of the Central Bank were held respectively, in which the total amount of "further increased downward pressure on the economy, the target is not relaxed, and the steady growth is placed in a more prominent position" shows that the pressure and difficulty of achieving the 5.5% economic target do exist objectively, but the determination to stabilize growth remains unchanged.
Tool level:
- Fiscal policy emphasizes "making good use of government bonds, expanding effective investment, and strengthening cyclical adjustment", and subsequent local bonds are expected to continue to be released.
- Monetary policy for the first time mentioned that "the frequency of domestic epidemics has increased", and emphasized "strengthening cross-cycle and counter-cyclical adjustment, increasing the implementation of prudent monetary policy" and "enhancing the stability of total credit growth", indicating that under the catalysis of the epidemic, the necessity of monetary policy easing has risen, and it is possible to cut the RRR and cut interest rates.
In view of the fact that the interest rate cut is mainly to reduce the cost of the real economy, which is constrained by the narrowing of the Interest Rate Differential between China and the United States; the RRR reduction mainly reduces the cost of the banking industry, combined with the expression of "supporting banks to replenish capital and focusing on stabilizing the cost of bank liabilities", the probability of subsequent RRR cuts is slightly higher than that of interest rate cuts.
Social financing and credit are always in waves, and they have been repeatedly affected by the epidemic, and the country belongs to the situation in which the fundamentals of the current period are not good, and the fundamental expectations are temporarily difficult to repair.
The outbreak in China has exacerbated global supply chain problems, and the impact has not yet been reflected in the data. The impact of the epidemic in Shanghai has spread to the Yangtze River Delta. In the coming period, high inflation expectations will be difficult to change.
In terms of real estate, the supply land area and the average price of listed goods in 100 large and medium-sized cities increased month-on-month; after the special meeting of the Financial Stability and Development Committee on March 16, the six ministries and commissions injected confidence and policy expectations into the market, and stability maintenance measures in various regions were introduced one after another.
The central government's attitude towards real estate regulation and control has changed significantly. The support for demand will be more precise and intensive, the support of financial institutions on both sides of supply and demand will also be strengthened, and the relaxation of purchase restrictions and loan restrictions in more cities and the further decline of mortgage interest rates are worth looking forward to.
As of the end of March, the size of the mainland's foreign exchange reserves was $3,188 billion, down $25.8 billion, or 0.8 percent, from the end of February.
Mainly in March, A shares fell sharply under the external shorting, foreign short A shares through short blue chips, leading the fall is blue chips, then the future market will lead the rise will also be blue chips. This week's bank infrastructure protection.
The long- and short-end yields of U.S. Treasuries are inverted. Since 1976, there have been 6 inversions of US Treasury yields, most of which have occurred in the tightening stage of monetary policy, and then there have been US recessions and even economic crises.
The U.S. non-farm payrolls rose 431,000 in March, the unemployment rate was 3.6 percent down 0.2 percent from 3.8 percent in February, and the labor market was strong. The Fed's policy rate needs to return to the long-term policy rate level as soon as possible, otherwise the labor market may overheat.
The core logic of the U.S. economy is the promotion of the employment-to-consumption cycle. The current U.S. job market, while tight, is unhealthy. Too low unemployment combined with high levels of inflation can put considerable pressure on the economy.
Recent Fed interest rate hikes and anti-inflation expectations have been rapidly fermenting, and there are expectations of a 50bp rate hike at the May and June interest rate meetings, which will suppress the market as a whole and technology growth stocks.
The stock markets of the world's major economies have returned to where they were before the Russo-Ukrainian War. In contrast, the rebound of A shares is weak, in essence, it is still a fundamental difference, and the valuation is close to the limit low.
Technically
The CSI 300 shrank slightly at a low level, and the market participation was not high. The epidemic in Shanghai is still climbing, the impact on the economy to the depth, according to the natural law of the virus, out of the epidemic is expected to be 1 month, the future market will be sorted out at a low level.
The ChiNext board is even weaker, and growth stocks are difficult to sustain under the expectation of interest rate hikes.