A Shares Uplink Resistance Appear &Nbsp; Grab Rebound Three Main Lines

Since October 24th,

Declining prices and economic performance continue to decline

According to the latest data released by China Federation of logistics and purchasing, PMI was 50.4% in October and 0.8 percentage points lower than that in the previous month.

Among them, the new export orders index, backlog order index, import index and purchase price index dropped significantly, especially the purchase price index, down 10.4 percentage points from last month, down to 46.2%.

This reflects that the expected export data in 7 and 8 months will be difficult to reproduce, and the process of enterprise going to inventory is still in progress.

The sharp decline in the purchase price index also reflects the fact that the cost pressures of enterprises are decreasing. On the whole, the PMI data still describe the economic expectation of sluggish demand, and China's economy is still in the process of "soft landing".

In terms of prices, the downward trend of CPI in the year has been clear, and the upward pressure on prices will be significantly smaller in the next two months.

From the point of view of inventory, when CPI starts to fall down, the operation of micro level enterprises will enter the stage of de stocking. The decline in the activity of the consumer side will cause many middle reaches enterprises to lose the ability to pfer high cost raw material costs, and the loss of profits will increase.

In the case of the A share market, the declining trend of manufacturing performance has been maintained throughout the year.

From the single quarter income and profit growth situation, after all A shares were eliminated from the financial sector, the growth rate of revenue fell from 29% in the first quarter to 25% in the three quarter, and net profit growth slowed from 21% in the first quarter to 6% in the three quarter.

In the current inventory stage, the performance of listed companies is expected to continue to decline rapidly in the four quarter.

Three mainline pulse overshoot rebound

In the short term, as security growth becomes the main contradiction of the fourth quarter, the fine-tuning of monetary policy will have a certain continuity. This will form positive feedback on the relaxation of policy expectations and enhance investor confidence. The excessive valuation discount of A shares is expected to be eased, but the time to relax policy is still not yet coming.

Although investors will shift the stock funds from the outfield to the capital under the guidance of policy expectations, if there is no floodgate operation of the total main valve, the pfer funds will tend to slow down and will eventually be unsustainable.

Of course, at present, confidence in the market continues to recover, although the policy easing expectations have not yet been fulfilled, the confidence premium caused by policy adjustment is still being deduced.

What needs to be reminded is that before the shift of policy keynote, the opportunity of trend is still hard to look forward to, but the opportunity of stage can still be grasped.

From the strength of supporting A shares to continue upward, credit easing is a necessary condition for the market to continue to run well.

Based on the judgment of overfall rebound, investors can take the opportunity to rebound from three angles.

First, based on the relaxation of policy expectations and the judgment of intermediate market rebound, valuation repair will become the main feature of the initial stage of the rebound. If the capital side continues to improve, there will still be room for repair.

At present, the valuation of blue chips is about 10 times, of which the valuation of financial stocks is lower than 8 times, while the valuation of small and medium board is still more than 30 times.

We believe that the undervalued sectors, such as banks, business and so on, are still worth the layout of the layout. Any loosening of the future policy will be seen as positive for the market, thus promoting the valuation of blue chip stocks represented by banks.

Second, in the context of continued policy easing, we can continue to focus on the possibility of cyclical rebound.

If the policy changes to relax, then the direct benefit industry is the investment goods industry. The issuance of Railway Bonds and the issuance of local bonds obviously have a certain role in promoting infrastructure projects. At the same time, the relaxation of credit for small and medium-sized enterprises also makes some periodical SMEs benefit, and it is suggested to pay attention to precision machinery and high-speed rail.

Third, we should pay close attention to emerging industries with favorable policies.

Starting from the goal of economic restructuring, the main direction of policy support will still be in the emerging industries. Although most of the emerging industries have a higher premium relative to the cyclical category, if the valuation recovery continues, the premium rate of emerging industries is expected to decrease. Meanwhile, the attention of the funds will also provide impetus for the active activities of new industries, and it is suggested to focus on intelligent pportation, energy saving and environmental protection.