In the turbulent ten days, can A shares avoid a catastrophe?

01

Restless global capital markets

Ten days on the double festival, but the global capital market is very uncalm.

Gold tumbled 5 percent, oil prices tumbled 8 percent, and almost all major stock indexes in Asia-Pacific markets fell spared. U.S. Treasury prices tumbled, with the yield on one-year U.S. Treasuries rising to 5.4% (U.S. Treasury prices falling sharply = yields to maturity soaring). The reason for the sell-off of U.S. bonds has not yet been found, some say they are worried about economic growth, some say they are worried about the huge fiscal deficit, and some say that the spillover effect of the Bank of Japan selling Japanese bonds.

Large types of assets fluctuate sharply, but it is difficult to find direct triggers——

Someone turned up an interview with Howard Marks, founder of Oaktree Capital, and David Rubinstein, founder of Carlyle Investment Group, on September 5.

Core arguments include:

1. We made a lot of money because we experienced "the longest bull market, the longest economic recovery, and the lowest debt default environment";

2. Now that everything has changed, the economic environment of easy money is gone.

The investment performance of the old man in recent years is very good. Last year, the investment bosses were almost completely wiped out, and the old man bet on energy stocks and got a rare yield of 16.63%. But now, it has also begun to frequently mention "difficult, difficult, difficult".

In the previous low-interest rate environment, liquidity was abundant, and people had to endure dancing with bubbles.

Now, with high overseas interest rates and weak domestic demand, the cash flow of many companies has fallen into a cold winter. Even more turbulent by the geopolitical situation, asset prices fluctuate highly.

Some people laughed and said that according to the tradition of "you rise and I fall, you fall I fall even more" in A shares, fortunately these ten days of rest, otherwise it is estimated that they will all lie down.

However, will it be affected by the turbulent global situation after the opening, or will it avoid this disaster because of the seemingly bright November holiday consumption data?

02

Restore real consumption

Speaking of this longest November Golden Week in history, it seems that there are roaring crowds everywhere, which makes people can't help but look forward to whether consumption is finally about to recover.

The data is out -

On the one hand, travel intentions and travel data recovered well, and the number of trips during the two-holiday holiday recovered to the level of the same period in 2019: according to the data center of the Ministry of Culture and Tourism, the number of domestic tourism trips during the 8-day Mid-Autumn Festival and National Day holidays was 826 million, an increase of 71.3% year-on-year on a comparable basis and 4.1% on a comparable basis compared with 2019. Among them, the degree of recovery of civil aviation passenger traffic is relatively high, and the average daily passenger traffic of civil aviation, railway, highway and waterway has recovered to 113%, 123%, 52% and 61% respectively in 2019, and cross-border flights have recovered significantly.

On the other hand, everyone does not have much money in their bags, and per capita consumption is not as good as before the epidemic: according to the data center of the Ministry of Culture and Tourism, the domestic tourism revenue achieved 753.43 billion yuan in 8 days during the Mid-Autumn Festival and National Day holidays, an increase of 129.5% year-on-year on a comparable basis and 1.5% compared with 2019 on a comparable basis.

The 1.5% increase in income is higher than the 4.1% increase in people, which probably indicates that everyone is actually spending less money. According to the China Tourism Research Institute, per capita consumption recovered to 97.5% of the same period in 2019.

Now just after the holiday, some more detailed consumption data, such as shopping malls, restaurants, duty-free stores, sales data are still in the process of statistics. In the past two days, I have interviewed two companies that do quality tourism, and the common feeling is that this holiday tourism boom is quite a mirror.

Although in terms of travel data, in the circle of friends, everyone is checking in everywhere, flying everywhere inside and outside the country, and the public niche attractions are overcrowded. But when it comes to real consumption, what you see is:

1. Everyone is willing to go out and experience it;

2. Everyone consumes restrained and calm;

3. Consumption of the middle class has been significantly reduced.

A company that does quality tours in the western region feels particularly wronged - their company's main product is "travel customized services", that is, from pick-up, accommodation to various tours, shopping, parent-child activities... One-stop to provide high-quality customers with high-premium travel customization services. But unexpectedly, the middle class began to save money. Only stay in the hotel, what high-priced customized travel services are deleted. People come to this place, just live, eat, how to come cheaply, how to come without spending money - these standardized services are honestly a maintenance, without those non-standard high-profit customized services, it is difficult for the company to live as moisturized as before.

Yesterday, there was also an insight report on the cross-border consumption turnover of the mainland in a certain country (our team is still verifying the caliber), which is consistent with the intuitive feeling of the above two domestic tourism companies - now everyone spends every penny on the blade.

In addition to the cost of transportation, the sales of cosmetics, jewelry, and luxury goods are not as popular as before.

On the one hand, it is true that everyone has no money in their bags, reflecting the chill of the economy.

On the other hand, this generation's consumer culture also seems to be changing. The willingness to feel, escape, or even check in is much greater than to have it very pompously.

As Howard Marks, founder of Oaktree Capital, asserts, the world is "changing dramatically" and the portfolio of the future should be very different from the past.

Similarly, the consumer market is now undergoing "sea change".

Therefore, no opportunity is a false proposition - just consumer psychology to consumer market logic, which is very different from the past.

I'm researching more companies intensively to bring more insights to this year's "Where the Money Comes From 5" series, so you are also welcome to contribute and tell your insights and stories, and perhaps, we will meet at the tip of the pen. (If you want to express your own story or the story of the company, please leave a message to this article, or send an email to [email protected]).

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