The writer is Wei Fengchun, chief economist of Chuangjin Hexin Fund.
The trading opportunities brought by the new real estate policy came to an end, the strong return of the US dollar, the disturbance of geographical conflicts, and the noisy northward funds began to calm down. Bonds suppressed by real estate have rebounded, and extremely low bond yields have put an ambiguous mark on the economic recovery. A series of policy operations bring the reverie of debt expansion to the market, but under the constraint of insufficient overall demand, the effect of simple policy stimulus on expected improvement still needs to be observed. Before the third Plenary session of the CPC Central Committee in July, the market will shift from trading policy expectations to trading fundamentals, so it is a rational strategy to look for structural opportunities in the evolution of the market itself.
I. the market continues to fight hard.
The title of the asset allocation report of the Chuangjin Hexin Fund in the second quarter of 2024 is "standing Standard". The May monthly report puts forward the view of "changing with the time", clearly pointing out that the standard of new quality productivity has been set up, which is the strategic allocation direction of the transition period. However, tactically, we must admit that fierce battle is the basic feature of the short term. From the beginning of the year to the end of May, the same origin of stocks and bonds with low dividends affecting large-cap stocks, cliff adjustment and V-shaped rebound of micro-disk stocks, extremely low bond yields and digital economy, overseas expansion of external demand and revival of domestic demand for real estate, Hong Kong stocks' soaring peak twists and turns, the amplitude of gold and crude oil and silver stand out. The characteristics of the fierce competition in the market are very obvious. It seems that every theme has an opportunity beforehand, and later it is found that the layout opportunity that can last is fleeting, and it is impossible to do so in the midst of doubt and hesitation.
Second, the macro fundamental factors can still give a clear explanation.
From the annual data, silver, copper, gold and aluminum are still the highest-yielding asset allocation in large categories since the beginning of the year. This can be explained by the increasing demand for resources in the global Jugla cycle, as well as by increased global uncertainty and security-based transactions, it also makes sense from the perspective of the well-known Givens paradox that has to increase resource consumption because of energy conservation. The decline of North Securities 50 and Science and Technology 50 means that the new quality productivity has not been fully recognized by the capital market, which pushes out the difficulty of reform. The poor income of rebar is dragged down by the real estate industry chain. From the weekly data, the Hong Kong Hang Seng Index began to adjust, which is related to the return of a strong US dollar. The slight rebound in rebar is caused by the aftermath of the stimulus of the new real estate policy.
This means that the seemingly dazzling market trend has not deviated from the track of macro fundamentals, and growth, inflation and liquidity are still the basic elements that determine asset allocation. InWorldclasspokerIn our model, the policy factor plays a very important role in observing China's asset market, and the operation of real estate policy brings you a big wave of opportunities in May. The next important policy factor will be the reform dividend given by the third Plenary session of the CPC Central Committee.
Third, pay attention to the basic impact of the market trend
According to the analysis of the Macro Strategy allocation Department of the Fund, the changes in the following three fundamentals require special attention:
First, the impact of a strong dollar on the market. Us S & P Global Manufacturing PMI initial value 50 in MayWorldclasspoker.9, expected to be 49.9, with a previous value of 50; the initial PMI of the service sector was 54.8, expected to be 51.2, an one-year high; and the composite index 54.4, a 25-month high. The input price index rebounded significantly. The higher-than-expected PMI data further delayed the Fed's expectations of interest rate cuts. Not only that, the minutes of the Fed's interest rate meeting on May 1 were hawkish compared with the statement at the press conference. Fed officials generally believed that the policy interest rate was in a reasonable position, and some participants said they were willing to tighten policy if inflation rebounded further. With regard to the inflation path, participants believe that if there is no more progress in inflation, it is necessary to keep interest rates high for a longer time, but if the job market unexpectedly weakens, interest rates will be cut soon.
Secondly, the impact of rising pork prices on the market. Piglet prices have continued to rise since 2024, reflecting the tight supply of piglets at the beginning of the year. In the short term, the spot supply pressure of live pigs is relatively controllable, and a contraction in the second quarter is a positive factor. In the long run, the stock of breeding sows continues to decline, corresponding to the reduction of supply pressure in the third and fourth quarters, the momentum of decline in pig prices in the second half of the year is relatively small, investors need to pay close attention to the spot supply of live pigs and the changes of breeding sows.
Finally, there is still room for the market to expect interest rates to fall, which has an impact on the market. The long end of bond yields has been stable in the current range, although bond supply is facing volume in the second quarter, but the allocation pressure of all kinds of funds makes it difficult for long-end interest rates to break through the previous lows. and a substantial upward need to see an overall improvement on the molecular side (from strong expectations to strong reality). In the short term, there is still room for further decline. There will be marginal easing in monetary policy, while factors such as a reduction in high-interest deposits and deposit disintermediation will continue to drive demand for short-term bonds; the interest rate curve is expected to steepen in the second quarter: resilience at the long end and downward pressure at the short end.
In addition, the logic of asset shortage remains the same. The strong short-end performance of credit bonds last week is explained by the relatively limited impact of further easing of real estate policy on the bond market, which still maintains the logic of the asset shortage. Because the pressure on the debt side is small, the adjustment pressure of the short-and medium-end coupon varieties of credit debt is relatively controllable. In the environment of thin spreads, credit debt investment needs to improve portfolio liquidity and neutral duration.
In particular, investors should be reminded that trading products such as secondary capital bonds of banks may fluctuate when the market is volatile and institutional behavior is easily affected by market sentiment, and the middle and long end need to pay attention to the change of interest spread. pay attention to timing and band operation.