The performance pressure may be the main reason, and the market value is dominant in April, so pay attention to these economic directions

Finance Associated Press, April 18 (edited by Zilong), tomorrow (April 19), A-shares are about to usher in the test of the "419 curse". The so-called "419 curse" means that since 2007, the market has often fallen on April 19 and beyond, and in some years the decline is often larger. Although the "419 curse" has not been fulfilled in recent years, it is still widely circulated as one of the traditional "metaphysics" of A-shares, and investors often discuss the market before April 19.

Performance pressure catalyzes the curse, and effectiveness has declined sharply in recent years

In terms of specific data, in the 17 years from 2007 to 2023, the Shanghai Composite Index fell 11 times on April 19 (if it is a weekend, it will count the rise and fall of the previous/next trading day), and the "green market probability" is close to 60%. Among them, the Shanghai Composite Index fell three times in 2010, 2007 and 2008, reaching 4.8%, 4.5% and 4.0% respectively, but it also recorded a bright increase of 2.1% and 1.5% in 2013 and 2021. On the whole, the "419 Curse" was mostly concentrated before 2017, and its effectiveness has decreased significantly in recent years.

Note: The Shanghai Composite Index has risen and fallen on April 19 in the past 17 years (if April 19 is a weekend, the lower value of the before/next trading day will be counted)

However, if the market is counted on the next 5 days, the "green market probability" of the Shanghai Index is close to 70%, which is higher than that on April 19. Among them, the Shanghai Composite Index fell significantly in the market after April 19, 2022, with a cumulative retracement of nearly 9.6% in the next 5 days. However, in the same period in 2008 and 2007, the Shanghai Composite Index also achieved "brilliant results" of 15.0% and 9.7% respectively. On the whole, since 2016, the probability of the Shanghai Composite Index falling in the market in the five days after April 19 has increased significantly compared with before, and the decline in a few years has been relatively sharp.

Note: The Shanghai Composite Index has risen and fallen in the past 17 years in the last 5 trading days on April 19

Although from the data point of view, the "419 curse" part corresponds to the Shanghai index market, but its causes mainly come from the impact of the main line of performance. Generally speaking, April is the peak period for the disclosure of listed companies' performance reports, and the more poor the performance announcement, the later the disclosure is, so in late April, under the influence of a number of "performance thunder", the market index is often dragged down and underperforms. In addition, the sharp decline in the early years deepened investors' understanding of the "419 curse", and the psychological effect affected the market sentiment, especially in the weak market, the psychological effect of the "curse" was relatively greater.

A-shares have been in the market for more than 30 years, and during this period, many abnormal market movements have gradually evolved into market consensus, thus becoming the "metaphysics" of A-shares. In addition to the "419 curse", many "metaphysical" phenomena such as "five poor, six absolute and seven turnovers", "three curses of cattle but three", "two barrels of oil curse", "World Cup curse", "88 curse", "long holiday curse" and other "metaphysics" phenomena are also often talked about by investors. However, although these phenomena have a certain probability of matching historical data, the specific problems need to be analyzed in detail, and all kinds of so-called spells are still mostly carved for the sword.

Note: Market sector index year-to-year change (as of the close of trading on April 18)

For the direction that can be paid attention to, Cinda Securities recently pointed out in a research report that April is biased towards the value of the market, and the main line of the boom focuses on the upstream cycle and export chain. On the one hand, the main line of the boom can pay attention to the industries that are stable at a high level after the ROE center is lifted and are in the upward cycle of the boom, mainly including upstream cycles, such as coal, petroleum and petrochemical, and non-ferrous metals. On the other hand, we can pay attention to the export chain in which the performance is in an upward trend, mainly including automobile parts, textiles and garments, light manufacturing, home appliances, etc., as well as machinery and equipment, logistics and other sectors in the consumer sector.

(Finance Associated Press Zilong)