With the Mid-Autumn Festival holiday over and the September Federal Reserve interest rate meeting approaching, how will the A-share market perform?
The surging news collected the views of 10 brokerages, most of which believe that during the Mid-Autumn Festival, Hong Kong stocks and major overseas markets have performed well, and the external environment has a positive impact on A-shares. Next, the market has reached a consensus on the start of the Fed's interest rate cut cycle, and the follow-up of domestic monetary and fiscal policies after the interest rate cut will become the key to whether the market can stabilize and recover.
CICC said that during the A-share market break during the Mid-Autumn Festival, the Hong Kong stock market performed better, with the Hang Seng China Enterprises Index rising nearly 2% in two trading days, and U.S. stocks also performing well. On the whole, Hong Kong stocks and major overseas markets performed well during the Mid-Autumn Festival, and the external environment had a positive impact on A-shares.
"The current A-share market has many bottom-biased characteristics: the turnover rate of A-shares calculated by free float market capitalization is at the historical bottom level of about 1.5%; In terms of valuation, the forward valuation of the CSI 300 Index is near one standard deviation of the historical bottom, and the market has a good valuation attractiveness. It is also a common phenomenon for strong stocks to cover losses in historical stages. CICC pointed out.
At the same time, China Securities said that the market has met the bottom conditions in terms of comprehensive profitability, valuation, transaction characteristics and other aspects. The turnover rate, as measured by the market capitalization, is close to or comparable to the levels of several historical bottoms; Sectors such as banks, which had a relatively strong performance in the early stage, have significantly made up for losses in the past two weeks, and strong stocks are often a common signal at the end of a market correction.
In the short term, Guotai Junan Securities pointed out that although the current market still has some differences on the extent of the Fed's interest rate cuts, there is a consensus on the start of the interest rate cut cycle. The follow-up of domestic monetary and fiscal policy after the Fed cut interest rates will be the key to whether the market can stabilize and recover.
In terms of allocation, the dividend strategy is still the direction that many institutions pay attention to. CITIC Securities pointed out that in the environment of declining long-term treasury bond interest rates, the bottom value of dividends still exists.
"The dividend sector has experienced a rebound in attractiveness after adjustment, and now it is necessary to pay more attention to the fundamentals of the molecular end and the sustainability of dividends." CICC said.
CITIC Securities: The grinding period is shortened
Since September, the inflow of funds has decreased, and the stock price has been accelerated to fully reflect market expectations, and the process of grinding the bottom is expected to be shortened.
First of all, from the perspective of the changes in the three major signals, in terms of price signals, the core CPI is close to the lowest level in history; In terms of external signals, the Fed may start a "risk management" interest rate cut in September.
Secondly, from the perspective of the stage of market bottoming, Central Huijin has continued to reduce the scale of equity ETFs purchased in the past two weeks, and the reduction in the inflow of funds in the nature of "bottoming" may accelerate the progress of stock prices fully reflecting market expectations and sentiment, and shorten the bottoming period of A-shares.
In terms of allocation, in the environment of declining long-term treasury bond interest rates, the bottom position value of dividends still exists, but in terms of structure, it is necessary to avoid varieties with fundamental volatility risks; At the same time, the outstanding companies in the overseas sector, which have fully reflected the risks of overseas recession and trade frictions, have allocation value.
CICC: The external environment is positive
During the Mid-Autumn Festival holiday, Hong Kong stocks and major overseas markets performed well, and the external environment had a positive impact on A-shares.
At present, the A-share market has many characteristics of being at the bottom: the turnover rate of A-shares calculated by free float market capitalization is at the historical bottom level of about 1.5%; In terms of valuation, the CSI 300 dividend yield is 1.1 percentage points higher than the 10-year treasury bond rate, and the forward valuation of the CSI 300 Index is near one standard deviation of the historical bottom, indicating that the market has good valuation attractiveness.
In terms of allocation, the dividend sector has experienced a rebound in attractiveness after adjustment, and it is now necessary to pay more attention to the fundamentals of the molecular end and the sustainability of dividends. Since mid-July, consumer electronics, semiconductors, etc. have been adjusted by more than 10%, and the valuation is not high. Export chains and globally priced resources may diverge after a short-term correction due to overseas fluctuations.
China Securities Securities: The bottom conditions have been met
On the whole, the market has met the bottom conditions. In September, the Federal Reserve is about to start cutting interest rates, the domestic monetary policy space is open, and the central bank has said that there is still some room for RRR cuts; At present, the sales of automobiles and home appliances have improved, considering the base and the effect of the policy, it is expected that the third quarter is the bottom of the profit, and the market will gradually include the year-on-year profit data improvement expectation in the fourth quarter at the end of the third quarter.
At the same time, the pessimistic expectations reflected by the short-term market have exceeded the beginning of February, on the one hand, the equity risk premium of Wind All A (non-financial petroleum and petrochemical) has exceeded the beginning of February, second only to the end of 2018, at the historical extreme level; On the other hand, the median and equal weight gains and losses of all A constituents have turned negative since the low point in early February.
In addition, there are also important bottom characteristics at the recent trading level, one is that the turnover rate measured by the circulating market value is close to or comparable to the level of several bottoms in history; Second, banks and other sectors with relatively strong performance in the early stage have obviously made up for the decline in the past two weeks, and strong stocks are often a common signal at the end of the market adjustment. In terms of comprehensive earnings, valuations, transaction characteristics, etc., the market has met the bottom conditions.
In terms of allocation, it is recommended that investors wait for the opportunity to lay out three clues: economic reality improvement, economic resilience, and valuation repair. First, the improvement of the economic reality of equipment renewal and consumer goods trade-in clues, focusing on the sustainability of the improvement of passenger cars/electric two-wheelers, home appliances and other sectors under the improvement of local trade-in subsidy standards; Second, in 2024, the resilience of domestic demand and strong related sectors will be resilient in the future, including education, insurance, jewelry, power equipment, etc., and the leading winning rate is higher at this stage, and it will further expand with the improvement of domestic demand; The third is the valuation repair that is expected to bottom out and has its own industrial logic, focusing on the military industry that has begun to release orders since the third quarter, the power battery that repairs the energy storage demand in the peak season, and the consumer electronics/semiconductors under the peak season of new product catalysis.
Galaxy Securities: Control positions
The important pre-holiday meeting was successfully concluded, but the market did not wait for the relevant stimulus policies to be introduced during the holiday, and the latest economic data released recently showed that the economy is still under great pressure. In terms of consumption during the Mid-Autumn Festival, from the perspective of grassroots research, consumption pressure also exists.
Overseas, the great power game is still the main theme, the overall macro environment has not changed much, and it is necessary to control positions and respond cautiously in the short term.
At the operational level, the short-term capital rotation is relatively fast, and it can be seen that the "export", "pharmaceutical" and "Huawei" directions continue to show the characteristics of strong rotation during the week, while the high-priced stocks concerned by active funds are also significantly diverged, and the short-term trading difficulty of the market is still "hell level", so it is recommended to participate cautiously. Considering that the tradable window in September is already very small, it is recommended to appropriately extend the time dimension of investment, screen the medium-term direction of low valuation + stable performance, retain some funds, and wait for the end of the "cold winter".
In terms of allocation, it is recommended that investors pay attention to household appliances, construction machinery and new energy (vehicles) related to "equipment renewal", "exports from friendly countries" and "consumption subsidies". The rebound at the bottom of the leading companies has doubled, once again suggesting a phased opportunity for innovative drugs.
Guotai Junan Securities: Be patient
Recently, the long-term interest rate has hit a new low this year, indicating that market demand expectations are weak and risk appetite is insufficient. From the perspective of expectations, in addition to the relative resilience of exports, inflation, credit, consumption, and investment in August all point to weak domestic demand, which urgently needs more incremental policy support. In September, the Standing Committee of the National People's Congress did not mention the incremental fiscal policy expected by the market, and the market's expectations for the economy and policy lacked upward momentum.
From the perspective of valuation and trading, affected by the downward revision of earnings expectations and the policy of stabilizing the capital market, the current price-earnings ratio quantile of the Shanghai Composite Index is still at the level of 26% since 2010, and the lowest turnover rate of all A is 0.75%, and the valuation and transaction structure still need to be digested and cleared. Therefore, it is important to be patient until you see enough progress at the expected level, or to give a sufficient margin of safety on the valuation of the stock.
Overseas, the Fed's interest rate meeting in September is undoubtedly the focus of attention this week, although the current market still has some differences on the extent of the Fed's interest rate cuts, but there is a consensus on the start of the interest rate cut cycle. At present, weak domestic demand expectations are still the core contradiction faced by China's assets, and the follow-up of domestic monetary and fiscal policies after the Fed cuts interest rates will become the key to whether the market can stabilize and recover.
Huatai Securities: Signals close to the support level have increased
Before the holiday, the Shanghai Composite Index hit a new low, but there were more signals close to the support level: first, the social finance and inflation data in August showed that the endogenous demand of the real sector still needs to be repaired, but investors reacted to the bearish information bluntly, indicating that the market may have been in the bottom range; Second, the degree of strong assets (dividend industry) to make up for the decline or is also one of the observation indicators at the bottom of the market, the current floating out of the clear or nearing the end, the cost performance of stocks and bonds has fallen to the bottom level of last year or indicates that the cost performance of dividend asset investment has rebounded; Third, the pressure of financing liquidation may be nearing the end, and the valuation differentiation coefficient has also fallen back to the level of 2018, but from the perspective of the bottom characteristics of the capital side, the net increase in industrial capital has not yet turned positive, and it may still be slightly lacking compared with the previous bottom construction.
Looking ahead, the current position at the bottom of the index is relatively solid, and the space bottom is initially available, but it is still necessary to pay attention to the new variable of incremental policy release at the end of the time.
In terms of allocation, it is recommended that investors continue the allocation ideas in the early stage: first, under the pressure of both ends of supply and demand, the ability to continue to exceed returns may be relatively limited, relying on their own ability to maintain a stable ROE center, but the market is priced along the ROE downward, A50 non-financial assets or still the bottom position choice for medium-term allocation; The second is the two-way improvement of supply and demand industry - general automation/shipbuilding/communication equipment/inverter/packaging and printing/papermaking, etc. Third, under the expectation of interest rate cuts, pharmaceuticals and Hong Kong stocks will benefit from interest rate cuts.
Everbright Securities: Short-term focus on opportunities for policy and economic data resonance
Historically, a market contraction has usually been followed by a turnaround. In the short term, we can focus on opportunities for policy to resonate with economic data. At present, there is still a certain disagreement between the future policy strength and the economic data, if the future policy further strengthens the efficiency and the economic data marginally improves, the market sentiment may improve, and A-shares are expected to rebound. Historically, however, medium-term market bottoms have typically required significant changes in fundamental expectations.
In terms of allocation, you can use the defensive style industry as the bottom position, and moderately participate in the growth market to be flexible. By scoring the industries screened out by market style and trading signals, in the defensive sector, it is recommended to focus on coal mining and power in September, while for large state-owned banks, white goods and other industries, we can continue to pay attention to the transaction congestion and choose opportunities for allocation. In the theme growth and independent prosperity style section, it is recommended to focus on industrial metals (copper), semiconductors, consumer electronics, military electronics, aviation equipment, and medical devices in September.
Zhongtai Securities: The rebound market still needs to be catalyzed
Looking back at historical experience, the reversal of market pessimistic expectations or the formation of a bull market in history mostly requires an improvement in economic fundamentals, or a strong reversal of economic fundamental expectations as support. Under the condition of keeping the current overall policy framework unchanged, the rebound above the intermediate (broad-based index rose by more than 10%) expected by the market generally occurs in the following two situations: first, strong liquidity injection, but the probability of a bailout before the market accelerates the decline is not large.
Second, at the policy level, strong economic policies have been introduced to reverse pessimistic economic expectations. Domestic economic policy is generally formulated mainly during the two major meetings in the middle of the year and at the end of the year, and other time periods are generally not easily changed, and it is difficult to have a large fiscal easing in the short term.
In terms of allocation, in the second half of this year, under the general direction of aggregate policy determination and strong financial supervision, the overall tone should still be steady. At this point in time, it is recommended that investors focus on the utility segments with the attributes of "new quality productivity": nuclear power, telecom operators, etc., in order to "attack and defend".
Huaan Securities: The Federal Reserve's interest rate cut has limited boost
Overseas, after the release of United States inflation data, the expectation of interest rate cut in September was revised down to 25BP, but the expectation of interest rate cut for the whole year was revised up to 125BP, and the market has given optimistic expectations for the Fed to cut interest rates, so the Fed's interest rate cut has limited boost to the market. The fundamentals of the domestic economy have not improved significantly, and data such as social zero, social finance, and inflation point to effective demand to be boosted. It is expected that the market will continue to fluctuate and continue to wait for the policy to exert force.
In terms of industry allocation, it is recommended to actively look for and grasp phased opportunities. Specific considerations: in the short term, catalytic events are the most important clues to thematic opportunities, and at the same time, the direction of sufficient adjustment in the early stage and the rebound of the economy or policy support is also expected to usher in a phased rebound; In the medium term, the direction with an upward trend or certainty is still the greatest common divisor of institutional consensus.
In terms of direction, it is recommended that investors focus on three main lines: first, the catalytic opportunities of the growth sector, focusing on electronics, AI (communications, media), and new productivity (low-altitude economy, equipment renewal). Second, the early adjustment fully superimposed the rebound opportunity brought by the economic rebound or policy support, focusing on household appliances, automobiles, real estate, agriculture, forestry, animal husbandry and fishery. Third, the business cycle is still the direction of high certainty in the medium term, focusing on non-ferrous metals (industrial metals and precious metals), utilities (electricity), and coal.
Soochow Securities: A shares are expected to enter a new round of upward range
In addition to the strong sectors covering losses, there are a number of characteristics that indicate that the market is already in a bottom range. "Land volume sees land price", and the trading activity of the A-share market has fallen back to a historical low range; All A's are experiencing earnings bottoms, and the bottom of the stock price tends to lead the bottom of earnings. There are multiple signs that the index is already in a state of over-falling at the bottom, and it may usher in a rebound in the short term. In the medium and long term, with the steady growth policy and the upward revision of the slope of economic recovery, A-shares are expected to enter a new round of upward range.
Historically, the bottom rally of the index is often accompanied by improved liquidity and the restoration of risk appetite, and the small-cap and growth styles are more resilient. From a fundamental point of view, the Federal Reserve's interest rate meeting is approaching, and the start of the interest rate cut cycle is conducive to the rebalancing of global funds and promoting the repair of growth valuations; In the context of weak economic recovery, branches with strong industrial logic are expected to be favored by funds.
In terms of allocation, it is recommended to screen investment opportunities based on four perspectives: first, the direction of high prosperity, second, areas where stock prices are over-falling and marginal improvement in fundamentals/fundamental expectations, third, sectors where industrial trends/industrial policy expectations are strengthened, and fourth, US dollar interest rate-sensitive assets.