The bull market in A-shares basically occurs when the economy is bad!!
Since 98 years, there have been four times in China in which the PPI has been significantly negative and the CPI has continued to decline;
In these four periods of economic pressure, A-shares have walked out of the bull market under the stimulation of positive policies!
From 97 to 99, the domestic PPI and CPI continued to be negative, and at that time it was a double dilemma of internal and external,
When the Asian financial crisis broke out in '97, mainland exports were hit hard, internal capacity was overcapacity, state-owned enterprises were in trouble, and the catastrophic flood in '98 hit domestic demand.
In order to stabilize the economy, the central bank has cut interest rates five times in a row and cut the reserve requirement twice
Fiscal issuance of more treasury bonds, increased investment in infrastructure, adjusted the tax structure, and expanded domestic demand
Real estate reform has become a new economic growth point, and WTO accession has brought export prosperity;
Supply-side reform eliminated backward production capacity and upgraded industries;
Finally, under the combined force of multiple policies, A-shares walked out of the famous "519" market;
Under the background of the global financial crisis in 2008, domestic PPI/CPI turned negative rapidly;
The United States opened QE, the domestic launched the "four trillion" investment plan, and the real estate policy was relaxed
A series of policies promoted the bullish trend of A-shares in 2009;
In 2012, the PPI continued to be negative, and the CPI continued to decline.
During this period there were problems of overcapacity in upstream coal, oil and metallurgy, as well as tight real estate policies and the impact of the European debt crisis
In 2014, macro policy turned loose
The real estate policy implements the monetization of shed reform,
The reform of state-owned enterprises was carried out in a classified manner, focusing on mixed reform, supply-side reform and the "Belt and Road" to solve the problem of production capacity.
Driven by a variety of policies, A-shares have come out of the "reform cow"
In 2020, the impact of the epidemic caused PPI/CPI to turn negative rapidly, and the global economic demand was affected both internally and externally.
Domestic RRR cuts, interest rate cuts, issuance of special government bonds, stable economic growth,
After the policy "combination box", A-shares began to rise, especially track stocks out of the super bull market;
At present, PPI is significantly negative, CPI continues to decline, and the corresponding stimulus policies are increasing.
A-shares are also likely to come out of the bull market in the future, after all, the A stock market is a typical policy market.