How To Explain The Opportunities When The Stock Market Bottoms Up?

Under the condition of abundant liquidity and molecular L, the key variables of future market are denominator risk-free interest rate reduction and risk appetite repair.

The continued growth of macro level economic growth means the continued downward trend of return on assets at the micro level.

The continued decline of risk-free interest rates makes the return on competitive assets such as stocks, bonds and financial assets rise and fall.

Considering that stocks are risky assets, the risk-free interest rate fall is a sufficient condition for debt cattle, but it is only a necessary condition for stock cattle. The future stock market variables are the restoration of risk preference.

In the backdrop of liquidity but lack of high-yield assets, the stock market needs a reason for optimism again.

Recently, the Fed's interest rate easing is expected to ease, the domestic currency is loose, the exchange rate has stabilized, the fifth plenary session is approaching, and the reform of state-owned enterprises has been introduced.

However, a substantial increase in risk appetite depends on reform and confirmation of such heavy events. Therefore, risk appetite repair requires a process, and the market may gradually build up. The bottom is an interval, not a point.

In the process of market bottoming, there are no trend opportunities in the short term, but there are structural opportunities. Opportunities come from dividend rate opportunities and risk appetite repair brought about by risk-free interest rate decline.

The strength of the opportunity depends on the risk reduction rate and the degree of risk appetite repair.

Can be concerned: 13th Five-Year plan, a new round of micro stimulus plan, mixed pformation pilot, military reform, bulk rebound, new Tongzhou, new Beijing, new Olympic Games.

We forecast 5000 points at 2000 points, 5000 points indicate risks, and 615 later cautiously did not give any recommendations.

825 double adjustment for the first time: "after a sharp fall, the stock market rebounded in the short term, and the debt cow continued". "Several key issues in the current market" put forward "stock market deleveraging bubble is entering the safety zone, too pessimistic is unnecessary".

In September 13th, "where is the bottom of the question?" the 1000 people teleconference judged that "the five big profits will be exhausted, and the stock market will gradually build a bottom and focus on structural opportunities". (the five big profits will be exhausted: the Federal Reserve will not raise interest rates temporarily, the stock market crash will start to dissipate the negative economic feedback, the state-owned enterprise reform plan is introduced, the deleveraging will enter the safety zone, and the bubble will fall out of value).

In October 7th, "where to ask the way" the 1000 people's conference call renewed the view that "five major benefits emerge, the road is underfoot, and the stock market has structural opportunities" (five major advantages: the United States is below the expected rate of increase in interest rates, the global stock market is rising, the PMI of the major economies is slowing down * China is not so bad, the external pressure is better than expected, the pressure of outflow of funds is eased, the new round of micro stimulation and the 13th Five-Year plan, and the fall of the autumn grain harvest pig price).

In the second half of 2014, the bull market in the first half of -2015 was "pforming cattle + reforming cattle + buffalo + leveraged cattle". It started from the bottom to top micro pformation and from top to bottom government reform, and was matched by funds, showing the denominator drive of risk-free interest rate decline and risk appetite enhancement.

What exactly happened before June 15th and triggered a huge stock market shock?

Is monetary policy turning? No.

In early June, due to the central bank's directional repo and pig price rise, the market once worried about the monetary policy shift and caused a miscarriage of justice, but soon 628 and 825 two double down were falsified, monetary policy has been easing.

Is liquidity tight? No, it is.

After the emergence of the mayor's turning point, the asset allocation of residents has changed.

Because of the decline in the ability of the real economy to absorb money, the large amount of money launched by the loose policy has shifted to the asset class such as stock market, bond market, and first tier housing market. It has repeatedly pushed up asset prices, and financial institutions have seen "asset shortage", forming a "barrier lake". What is missing is not capital but high yield assets.

yes

Has interest rates rebounded? No.

Liquidity "dammed lake", a wave of wave to lower the yield of fixed income market, the yield of ten year treasury bonds declined from 3.67% in June 15th to 3.16% in October 10th. It is just around the corner to enter the 2 era, and bonds have gone through a wave of bull market.

Is it a big deterioration in economic stall? No.

The three quarter

There has been a downward trend, but overall it is steadily declining.

Moreover, the bull market is mainly driven by denominator, and the market has not reported too much expectation to the molecule.

615, the core reason for the huge earthquake may be a decline in risk appetite.

The increase in leverage based on the expected pformation of the pformation magnified the ability of high risk investors to express their opinions. In May, a series of events led to a market readjustment of the reform, and the expected adjustment and deleveraging led to a sharp decline in market risk preference.

615-826 the huge earthquake in stock market is the release and vent of the declining factors of risk preference.

Therefore, the task facing the market is to restore risk appetite, which depends on the reform of trust reconstruction and effective deleveraging.

With the introduction of state-owned enterprise reform plan and deleveraging into the security zone, the profits will be exhausted. The risk preference may have been bottomed out, and the stock market will gradually be bottomed out.