Fan Jituo: Will A shares repeat the market in the second half of 2021?

Zhongxin Jingwei August 1st Question: Will A shares repeat the market in the second half of 2021?

Author Fan Jituo Cinda Securities Chief Strategy Analyst

The recent market performance, from the perspective of marginal changes, some similar to the situation in the second half of 2021. After the overall rebound, the economic expectation declines, the Shanghai Stock Exchange 50 has weakened in advance, and the growth is the strongest. After the Spring Festival in 2021, the stock market was adjusted violently, and then rebounded from April to May. Although the new energy is the strongest during the rebound, consumption and other sectors also have good performance. Until June 2021, due to the weakening of the economy, the economically closely related consumption and bank real estate began to weaken, but due to the new new consumption, bank real estate, etc., due to the new consumption, bank real estate, etc., due to the new consumption, bank real estate, etc., due to the new consumption, bank real estate, etc., due to the new consumption, bank real estate, etc., but due to the new consumption, bank real estate, etc., due to the New The strong performance of the energy and other sectors, the overall index is still strong. Wan De Quan A Index continued to maintain a high level of shock in the second half of 2021, and it did not emerge until early 2022.

The reason why this situation occurs is: (1) 2019-2021 is a period of better growth stocks. The strongest track is semiconductor and new energy. The impact of the index is often weak, unless it is an extreme economic fluctuation (similar to the epidemic), it will only affect the local. (2) Although the economic data declined in the second half of 2021, the interest rate began to turn down and down, and the macro -funded environment was better.

The subsequent possible interpretation process is that after the economic expectation declines, the market may still rise to a period of time until the existing funds are exhausted. According to the experience of the second half of 2021, the decline in economic expectations will lead to the adjustment of value stocks of Shanghai Stock Exchange 50, but there will still be local investment opportunities. Since July, market adjustments may be similar to the pattern of the second half of 2021, and the index will maintain a high level of shock as a whole. Given that the Shanghai Stock 50 has fallen back during the May-June rebound period, even if the economy is still weak, the impact on the index will passivation. We have always believed that since May, the main force of market rising comes from the replenishment of stock funds, and the secondary force comes from changes in economic expectations. From the point of view of private equity positions, there is a high probability that there is a possibility of slightly replenishing positions, thereby supporting the August-September September index to continue to rebound.

We believe that since it is now in the late stages of economic downside, most of the concerns about the decline in the economy have been concerned about the current valuation level. Although the weak economic data will still have a negative impact on the stock market, as long as the speed of decline is not fast, the reaction of the stock market is generally mild. After the end of 2018, the stock market rebounded in early 2019. After the rebound, the economic recovery did not appear. It is much slow, so there is no second bottom.

In the short term, A shares may return to the rise in August to September, and there may be large twists and turns in the fourth quarter. The current status of the stock market is very similar to 2019. The profit has not yet improved. However, due to the early fall in the valuation, the stock market will first have a valuation repair, and then wait to verify the logic of profitability. The market will usher in a large rebound after every economic expectation (first quarter, August-September), and whether the profit can be improved will be lower than expected. In April and July 2019, In October, the disclosure period of the three quarters, the stock market was weak. Looking forward to the market outlook, the adjustment of July is mainly from the disclosure of the interim reported performance, the funds of overlooking the overlook, and the decline in real estate data has enlarged this fluctuation. From August to September, the market still had a motivation to rise. After the fourth quarter, as the steady growth effect and the recovery effect after the epidemic, the market may enter the real adjustment. (Zhongxin Jingwei APP)

(The views in the article are for reference only, do not constitute investment suggestions, have risks in investment, and need to be cautious to enter the market.)

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