Interest rate hit a two-and-a-half-month high stock market welcomes technical bull market

 Interest rate hit a two-and-a-half-month high stock market welcomes technical bull market

Wind market shows that since June, the reverse repurchase of treasury bonds of various maturities has increased. On June 19, the maximum annual interest rate in reverse repurchase of treasury bonds of all maturities had exceeded 2%, significantly higher than that in the previous period.

Compared with the end of each month, in terms of the 1-day, 2-day, 3-day, 4-day, 7-day, 14-day and 28 day periods of the above exchange (the medium and long-term 91 day and 182 day exchanges are not active, which is less affected by the monthly impact), wind data shows that, on the whole, at the end of January this year, namely before the Spring Festival, the annual interest rate base of each period is the highest, and the highest interest rate is more than 3%. In addition, the interest rate at the end of March is not low, but there is a large difference in each term, and the annual interest rate varies from 2% to 4%. With the development of the epidemic, the interest rate began to decline gradually after the central bank cut the interest rate and gave liquidity support. The interest rate was the lowest at the end of April, and most of the highest annual interest rate was only below 2%. Since May, under the less frequent operation of the central banks open market, the reverse repo rate of treasury bonds has risen slowly. At present, it has been significantly higher than the previous two months in the middle of June. It can be seen that the end of June meets the middle of the year, and the cost of capital goes up or is unavoidable.

Treasury bond futures are still falling

Since May, all treasury bond futures have been adjusted, especially the main contracts of 5-year and 10-year maturities have dropped significantly. For a 10-year period, wind data shows that the first round of decline was from April 30 to May 19, with eight falls in 11 trading days, and the intraday low of May 19 hit a new two-and-a-half-month low.

After a small rebound, a new round of decline was opened again on May 25, until the intraday low of 99.725 yuan on June 8, a new low of three and a half months. One week after the short-term rebound, it rose and fell on Monday, fell again on Tuesday and Wednesday, and rebounded after reaching below 100 yuan again on Friday, only a step away from the previous low. Since the stage high, this round of decline has been adjusted for 35 trading days, down more than 3%, but there is still no sign of stabilizing the rally.

The stock market is hot

This week (June 15 to June 19), a share highlights, popular. The inflow of foreign capital accelerated, and the actual net purchase of capital from the north on Friday was 18.23 billion yuan, the highest in history.

It is worth mentioning that the gem index rose 5.11% this week, reaching a new high of more than four years. The growth enterprise market index has become the leading indicator of the market. After the growth enterprise market index, the Shenzhen composite index has entered the technical bull market, and other core indexes are expected to follow up.

How about the fund in the later period?

Qi Zongchao, an analyst at Xiangcai securities, believes that the gap between M2 and M1 growth rate narrowed in May. The recovery of monetary growth overall reflects that in the face of weak demand and production disconnection caused by the epidemic, monetary policy is gradually expanding to credit. The growth scissors of M2 and M1 began to narrow, reflecting that with the gradual recovery of downstream demand, the actual production demand of enterprises began to recover, and the situation that funds were used by enterprises for idle arbitrage was eased. Generally speaking, the tone of monetary policy will not change. The broad monetary policy is gradually transmitted to the broad credit policy, and the credit activities of enterprises are expected to recover gradually. In the case that the epidemic remains uncertain, the possibility of a significant tightening of the financial sector is unlikely, and monetary policy as a whole will remain loose.

Wang Han and Wang Lianqing of Societe Generale Securities believe that the downward pressure of the economy and the need to stabilize the economy mean that monetary policy may remain loose. However, the easing of monetary policy no longer relies on total amount tools such as interest rate reduction and standard reduction. In 2015 / 2016, the loosening of monetary policy brought about problems such as arbitrage and separation from the real economy. Therefore, in recent years, monetary policy has focused more on targeted policies.

The purpose of loose monetary policy is to reduce the burden on the real economy and promote the recovery of the real economy. The tools used in monetary and financial sectors will pay more attention to the support of the real economy, which means that we may not rely too much on total liquidity easing. For financial markets, total liquidity may not be as loose as previously expected.

How should assets be allocated?

According to the statistics of risks and returns of various assets, investors with different risk preferences can be allocated according to the following proportion, with the attached table as follows:

The index center will continue to rise in the third quarter. On the one hand, regardless of the long-term impact of the epidemic on the economy, the pattern of the epidemic in the third quarter will not be changed, with the economy recovering slowly. On the other hand, the funds brought about by the continuous easing of interest rates may be transmitted to the stock market. Whether the epidemic will bring long-term problems to the global economy will not have a great impact on the market in the third quarter, but will have an impact on the market in q4-2021 in 2020.

Wang Hui team of CICC thinks: 1) bonds: pressure is greater than opportunity. The short-term interest rate bottoms out and the term spread slows down. The return of growth to normality is not achieved overnight. It is expected that differentiation will bring trading opportunities. Credit debt is better than interest-rate debt. High-grade debt looks for opportunities from the relative attraction of interest margin. High-yield debt looks at default risk. In the medium and long term, the long-term interest rate center will move down.

2) Stock: the contribution of liquidity slows down. Historically, the price of stock assets will be restrained in the period of fast upward interest rate and the next one month or so. However, when the interest rate is stable, the stock assets will mainly increase. As growth picks up, growth is expected to contribute positively to equity asset prices. We will continue to make structural arrangements around the resumption of work. The relative attraction of stock and bond is still in favor of stock.

3) Alternative and overseas: the role of gold in risk diversification was more prominent in the second half of the year. Crude oil benefits from a global resonance recovery, with the risk that supply will increase faster than demand will improve. Over matching overseas to expand the source of income, overseas return to work and production in China, but the policy is more relaxed than in China, and the risk assets may be more flexible and volatile.

Source: Yang Qian, editor in charge of wind information_ NF4425