"Spring restlessness" will not be absent

The data show that there has been a phenomenon of "spring restlessness" in the stock market since 2010. Among them, 2010, 2011, 2014, 2015 and 2016 all showed "falling first and then restless". The stock market adjustment at the beginning of the year does not mean that there is no "spring restlessness" in that year. According to the data, most of the spring restlessness covers February, and the probability of an increase in February since 2010 is 67%.

In this regard, Xingshi Investment believes that although the stock market did not perform well at the beginning of this year, there are no major negative factors in macro fundamentals, and the market is beginning to stabilize, and the restlessness in spring may be late but will not be absent.

Xingshi investment analysis said that "spring restlessness" can be understood as A-share market driven by liquidity and emotional aspects, the opening date is uncertain. The main drivers of restlessness in spring are as follows:

First of all, liquidity is relatively abundant before and after the Spring Festival.Among them, the phenomenon of liquidity contributing to "spring restlessness" in 2012 and 2019 is more obvious. At the end of December 2011, the Monetary Policy Committee of the people's Bank of China held a regular meeting in the fourth quarter of 2011 to propose that "continue to give full play to the counter-cyclical adjustment function of macro-prudential policy measures. Maintaining a reasonable total amount of monetary credit and the total scale of social financing" aroused market easing expectations, followed by a 0.5 percentage point reduction in the required reserve ratio on February 18, 2012. Monetary policy easing is the main reason for this round of "spring restlessness". On January 2, 2019, the central bank took the lead in relaxing the assessment criteria for targeted RRR cuts for small and micro enterprises in inclusive finance. On January 4, 2019, the central bank announced a 1 percentage point reduction in the required reserve ratio, which started restlessness in the spring of that year.

Secondly, the market usually has certain policy expectations at the beginning of the year. Important meetings are intensive at the end of the year and the beginning of the year, and the two sessions will be held in March, and the work plan put forward by the Central Economic Conference at the end of last year will be landed in the government work report, so market expectations for policies are on the high side, and the risk appetite will pick up.

Thirdly, the upside logic of data vacuum performance is difficult to falsify.January 31 is the deadline for the disclosure of the annual forecast.From the historical data, the overall number of companies reporting good news in the annual report is on the high side, the logic of upward performance is difficult to falsify, and the market risk preference will also increase.

In addition, systemic risks have emerged in years where there has been a major adjustment or early end in the spring market over the past decade, such as 2016, 2018 and 2020.

With regard to this problem, Xingshi Investment believes that the volatility of the stock market at the beginning of this year is mainly due to two temporary factors:

On the one hand, the extremely differentiated market converged in 2021, and the adjustment of stock funds caused temporary fluctuations.From the perspective of market performance, the characteristics ofhighness and low switching are obvious. As of January 20, the Shenwan high price-to-earnings index fell 8.48%, the Shenwan low price-to-earnings index rose 4.15%, and Wanderquan A fell 3.65% over the same period.

On the other hand, the policy tone began to warm up, but the physical workload has not yet been obviously formed, and some investors in the market are skeptical about the strength and effectiveness of the growth stabilization policy.

Looking back, there has been no major change in macro fundamentals, the stock market does not have the basis for continuous adjustment, and the drivers of this year's "spring restlessness" are still there.

In terms of liquidity, the tone of loose monetary policy has confirmed thatmonetary ivity will remain abundant for some time to come. Since 2022, the central bank has successively carried out a series of easing operations: on January 1, the central bank implemented the successive conversion of two direct tools, namely, the loan extension support tool for inclusive small and micro enterprises and the credit loan support program for inclusive small and micro enterprises, to increase support for small and micro enterprises; on January 17, it lowered the policy interest rate in the case of additional sequels; and on January 20, it cut 1-year and 5-year LPR. At the same time, at the 2021 financial data press conference on January 18, the central bank proposed "sufficient force", "accurate force" and "forward force", saying that monetary policy would be "more proactive" and "focus on the front".