The rebound has arrived, what conditions are missing for the reversal?

The three major A-share indexes also collectively closed in the red, but they all rose less than 1%, and the upward momentum was insufficient throughout the day, maintaining sideways shocks, and the shrinkage in the afternoon was more obvious. The transaction volume of the two cities was 993.2 billion yuan throughout the day, a month-on-month increase for three consecutive days, but the volume growth in the afternoon was obviously weak.

In terms of plates, there was an obvious switch between high and low on November 15, and low-level plates such as wind and solar lithium performed strongly throughout the day. Household appliances and insurance, which have been declining before, have rebounded. There is also a rotation within Big Tech, with computing power leasing, CPO, chips, and Huawei's HarmonyOS declining, but software, consumer electronics, and robots are outstanding.

Northbound funds saw a slight net inflow.

On November 15, Wind data showed that northbound funds bought a net of 3.626 billion yuan throughout the day, ending a net selling trend for 6 consecutive days, of which 2.315 billion yuan was bought through Shanghai-Hong Kong Stock Connect and 1.311 billion yuan was bought through Shenzhen-Hong Kong Stock Connect.

In terms of individual stocks, northbound funds prefer BYD, Hengrui Pharmaceutical and BOE, and stocks with large net sales include Ping An of China, Xin Yisheng and CATL.

Resonance of internal and external positive factors //

Domestically, the economic recovery is being verified.

On November 15, data released by the National Bureau of Statistics showed that from January to October, the national investment in fixed assets (excluding rural households) 419409 billion yuan, a year-on-year increase of 2.9% (calculated on a comparable basis). In October, the total retail sales of consumer goods reached 4,333.3 billion yuan, a year-on-year increase of 7.6 percent. In October, the added value of industrial enterprises above designated size increased by 4.6 percent year-on-year in real terms (the growth rate of added value is the real growth rate after deducting price factors). From January to October, the national real estate development investment was 9,592.2 billion yuan, a year-on-year decrease of 9.3% (calculated on a comparable basis).

The National Bureau of Statistics said that in October, the macroeconomic control policies continued to be effective, production and supply rose steadily, market demand continued to improve, employment prices were generally stable, transformation and upgrading were solidly promoted, and the national economy continued to recover and improve.

Bank of China Securities said that the data in October continued the upward trend. On the whole, the year-on-year growth rate of industrial added value and the year-on-year growth rate of social zero in October exceeded market expectations, and the cumulative year-on-year growth rate of fixed investment was lower than market expectations.

Overseas, the recent CPI data in the United States and the United Kingdom cooled more than expected, the interest rate hikes by the European and American central banks basically ended, and the tightening of global financial conditions eased.

CITIC Securities said that the current stickiness of U.S. inflation has weakened to a certain extent, and the overall inflationary pressure will be more controllable in the future. It is expected that the Federal Reserve may have completed this round of interest rate hikes, and the 10-year Treasury rate may weaken in the short term.

In terms of international trade, good news is expected to support the market.

Hualong Securities said that as of January to October, the United States was still China's third largest trading partner. The total value of trade between China and the United States was 3.86 trillion yuan, accounting for 11.2% of China's total foreign trade. From November 9, the number of direct passenger flights between China and the United States will increase to 70 per week, and people-to-people interaction is also expected to heat up. The recent meeting between the Chinese and US heads of state on the sidelines of the APE meeting is expected to raise the market's positive expectations for China-US relations and enhance the market's risk appetite.

The reversal hasn't come yet //

Despite the accumulation of positive internal and external factors, and the rebound has appeared, there is still no warm scene of "a big white line, thousands of troops coming to meet". Confidence restoration will not happen overnight, and the market is still waiting for more clarity.

First of all, the internal energy is in the early stage of recovery, and internal and external uncertainties still exist.

The National Bureau of Statistics said that there are still many external instability and uncertainties, domestic demand is still insufficient, and the foundation for economic recovery still needs to be consolidated. It is necessary to continue to adhere to the general tone of seeking progress while maintaining stability, solidly promote high-quality development, accurately and effectively implement macroeconomic regulation and control, focus on expanding domestic demand, boosting confidence, and preventing risks, and continuously promote the continuous improvement of economic operation, the continuous enhancement of endogenous momentum, the continuous improvement of social expectations, and the continuous resolution of risks and hidden dangers, so as to promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth.

Shanxi Securities commented that the current problem of overcapacity in the mainland still exists, the growth rate of actual inventories is not low, the economy is uneven, the internal energy is in the early stage of recovery, and the risk of recession in the United States still exists, and the recovery slope and sustainability of the domestic demand side is the key to whether the economy can finally achieve recovery.

Zhongtai Securities also believes that the inflation data in October returned to the downward range, mainly due to the decline in food prices and the slow recovery of endogenous demand, resulting in sluggish core inflation. The year-on-year decline in the PPI of durable goods and consumer goods widened to 2.0%, indicating that residents are still not willing to buy durable goods despite the negative wealth effect of real estate and unstable income expectations.

Second, U.S. interest rates are at a nearly 15-year high, and U.S. Treasury yields are still running high, which has suppressed the wind bias to a certain extent.

CITIC Securities believes that in the short term, the 10-year U.S. Treasury interest rate is expected to weaken with the economic slowdown, but it will still run at a high level of more than 4%.

According to the CICC research report, in recent years, unfavorable supply factors such as population aging, government intervention in the economy, frequent geopolitical conflicts, and anti-globalization have increased, which means that inflation will last longer, and the inflation center in the United States may rise systematically. The implication for monetary policy is that the Fed will have a harder time making trade-offs between growth and inflation, and may need to increase inflation tolerance next year in order to guide the economy to a soft landing. In the base case, the Fed will maintain the current level of interest rates in the first half of next year before turning to rate cuts in the second half of the year, with the first rate cut likely to be in September.

Third, the short-term stimulus policy expected by the market has not yet been implemented.

On November 15, the central bank launched an MLF operation of 1.45 trillion yuan, with an MLF maturity of 850 billion yuan this month, and the MLF operation interest rate this month was 2.50%, compared with 2.50% in the previous period.

Oriental Jincheng commented that it is currently in a critical stage of promoting the continuous recovery of economic recovery momentum, and it is necessary to maintain reasonable and abundant market liquidity and curb the rapid upward momentum of market interest rates. In addition to the flexible implementation of reverse repo operations, the large-scale increase in the continuation of MLF will help alleviate the liquidity pressure of the banking system. In November, the MLF continued to increase the amount of large-scale support for fiscal strength, and there is a possibility of a RRR cut before the end of the year, and interest rate cuts are also in the policy toolbox.

Guosheng Securities also believes that credit union financing in October was better than expected and better than seasonal, but the structure needs to be improved, especially the "deleveraging" of residents again. Looking ahead, the economy has stabilized month-on-month, but there may be twists and turns in the repair process, the slope should not be overestimated, and there is a high probability that there will be policies in the follow-up; monetary easing is still the general direction, and there is a high probability that the reserve requirement ratio will be cut again in the fourth quarter, and the interest rate cut window has not yet closed.

(Wind is synthesized from Wind financial terminal data, information on the official website of the National Bureau of Statistics, institutional research reports, etc.)

Enter the command in the Wind financial terminal

Place bulk orders online and manage multiple accounts easily

Portfolio asset penetration management, real-time monitoring of underlying positions

Purpose-built for institutions

One-stop fund investment research, trading and management platform