[ad_1]
For stocks, see Golden Unicorn’s Authorized, Professional, Timely, and Comprehensive Analyst Research Report to help you seize potential thematic opportunities.
European and US markets remain weak and the outlook for stocks will be better next week
Source: Shanghai Securities News
Wang Youruo
On Friday, the A-share market rebounded and investors also sold US stocks overnight. Some market participants are beginning to worry: affected by the large-scale adjustment of global risk assets, whether A-shares can exit the independent market next week.
In this sense, the institutional analysis believes that changes in the global epidemic remain the central variable that dominates the trend of the main assets, but the risks abroad caused by the epidemic have a limited impact on A actions. The current market does not have the basis for a substantial adjustment in March of this year.
Judging from the three quarterly reports, the performance of A-share companies has improved significantly, and the focus of the future investment style remains the prosperity of the industry and the sustainability of performance growth.
Why did the external stock market crash?
In the shadow of the epidemic and concerns about general election uncertainty, US stocks closed across the board on Friday. Among them, the Nasdaq index fell the most, 2.45%, and some top-performing tech stocks also suffered a concentrated sell-off. Looking at the market throughout the week, the European and US equity markets have performed poorly under the double blow of the worsening epidemic and the desperate stimulus plan.
Zhongtai ValuesLiang Zhonghua’s macro team said global risk assets fell sharply this week, and even precious metals such as gold and silver were also affected. Changes in the global epidemic remain the central variable that dominates the trend of the main asset categories. In the case of the second outbreak of epidemics in major economies such as Europe and the United States, the process of “scaling the hole” from the bottom of the overseas economy faces challenges. If epidemics abroad cannot be effectively prevented and new monetary stimulus measures are difficult to produce, risk assets may still be under pressure. However, investment opportunities in high-quality assets often occur in volatility.
Yuekai Securities’ strategy team believes that the external market has fallen sharply recently, but the resistance of A-shares to external shocks is gradually increasing. From a liquidity perspective, whether in the primary or secondary market, the liquidity supply-demand ratio continued to improve in the fourth quarter, and the adjusted equilibrium pattern is expected to decline marginally. From a fundamental perspective, the national economy is recovering well and the driving force behind performance is steadily increasing.
Generally speaking, the current market does not have the basis for the market crash of March this year, and the impact of external risks on A shares is limited. The aftermarket can achieve a steady upward trend in valuation structural adjustment.
Third Quarterly A-Shares Report: Earnings Accelerate Higher
As of the evening of October 31st, the performance of the A-share listed company’s Q3 2020 report has basically been revealed. Overall, the recovery in demand has led to a rebound in performance, and the performance of A-share companies in the third quarter report has improved significantly.
China Merchants ValuesThe strategy team of Zhang Xia (Golden Unicorn Analyst) stated that the earnings of A-share companies in the third quarter accelerated for improvement, and the single-quarter earnings growth rate turned positive. Among them, the non-financial sector contributed more profits, while the fall in financial sector profits slowed. Zhang Xia believes that the factor driving the improvement in A-share earnings is further acceleration of economic production activities to drive revenue expansion.
CICCWang Hanfeng’s strategy team stated that from the performance of the three quarterly reports, it is recommended to pay attention to three main lines to improve performance: one is the middle and upper part of the cyclical industry that benefits from the upward recovery the economy, the deepening of the domestic resumption of production and production and the rebound in international prices of raw materials; the second is the industrial boom. In the new economic field, where the economic growth rate continues to improve or has increased a little, thirdly, in some pan-consumer industries, corporate performance is expected to continue to maintain constant growth.
The IACC further analyzed that the A-share non-financial sector profit margin continued to stabilize and recover in the third quarter, the average leverage ratio decreased slightly, corporate cash flow was still improving, inventory levels were still low and capital spending growth continued to increase. Earnings for A shares are expected to continue to improve in the fourth quarter, and it can achieve double-digit yield growth next year.
The investment approach should emphasize profitability.
Guotai JunanThe securities strategy team stated that it stands by its view that the Shanghai stock index fluctuates between 3100 and 3500. External uncertainties are about to fall and the market adjustment is approaching the lower limit. Investors are encouraged to actively deploy.
However, Guotai Junan Securities emphasized that in the next stage, the focus of the investment style should be shifted, from the end of the denominator to the end of the numerator, emphasizing profitability and sustainability of earnings, as well as the degree of match with the valuation.
It is recommended to capture the three main lines of profitability: one is the profitability sector driven by the innovation cycle, with the first to promote new energy and consumer electronics; the second is the improvement in domestic demand in the post-epidemic period and the increase in the marginal propensity to consume of residents, optional consumption is better than compulsory consumption; third is the future Export chains that are expected to benefit from the global recovery, such as machinery, transportation, petrochemicals and banks.
CITIC valuesThe strategy team believes that repeated epidemics in Europe and the United States will have a limited impact on A-stocks, and the internal fundamentals adjustment that is expected to correct is coming to an end. November A-shares are expected to enter a two-month void of internal and external shocks, which will be driven by continued fundamental improvement. Incremental funds enter the market, breaking the market’s weak liquidity pattern and restarting the slow-growing market in the medium term.
In terms of setup, CITIC Securities continued to recommend procyclical and undervalued sectors, including non-ferrous metals and chemicals that benefited from the global economic recovery and the weak US dollar, hotels, spirits, appliances, automobiles, home furnishings to be They benefited from the restoration of domestic consumption and Insurance and banks with absolutely low valuations.
Statement from Sina: Sina.com publishes this article for the purpose of conveying more information, and does not mean that I agree with their views or confirm their description. The content of the article is for reference only and does not constitute investment advice. Investors trade accordingly at their own risk.
Disclaimer: The content provided by Wemedia is derived from Wemedia and the copyright belongs to the original author. To reprint, contact the original author and obtain permission. Opinions in the article represent the author only, not Sina’s position. If the content involves investment advice, it is for reference only and should not be used as an investment basis. Investing is risky, so be careful when entering the market.
Massive information, accurate interpretation, all in the Sina Finance APP
Editor in charge: Chen Zhijie
