In the short span of two trading days, A-shares have witnessed a "double explosion" market trend:
Short-term surge. Yesterday, the Shanghai Composite Index (SCI) surged by 4.15%, setting a new high for a single-day increase in four years. Building on this, today the SCI opened significantly higher, rising by 3% at one point, with a two-day increase of over 7%, and a near 200-point surge. If we look at the six consecutive days of gains since the bottom on September 18th, the index has surged by nearly 270 points in the short term.
Short-term explosive volume. Yesterday's market transaction volume broke through 900 billion yuan, and this morning it approached 800 billion yuan. The full-day transaction volume nearly reached 1.2 trillion yuan, the first time since May 6th that it has broken through the trillion-yuan transaction milestone. Both the half-day and full-day transactions set new phase highs, with the short-term explosive volume fully demonstrating the market's surging enthusiasm for short-term trading.
Thus, under the release of significant policy combinations, the market has seen a short-term surge in volume and prices. So, for the market, is this upward movement a rebound or a reversal?
Advertisement
We proposed yesterday that there is a certain time lag between the market's policy bottom and market bottom, and the formation of the ultimate market bottom requires attention to the strength of the macro fundamentals and whether stock market confidence is rising. On this basis, although the short-term market has continued to rise, it is still considered a rebound at present.
Firstly, the short-term rebound is mainly due to the unexpected boost under the consolidation of the policy bottom. The recent market fluctuations are mainly due to the unexpected combination of policies, and under the expectation of the release of real liquidity, the market's short-term sentiment has been boosted, and expectations have improved. However, as with many previous policy stimuli, the market will rebound under the policy bottom, but the size and sustainability of the rebound still need to be further judged in conjunction with other attributes. The boost and stimulus from policies alone are mostly just a rebound.
Secondly, whether it is a rebound or a reversal mainly depends on the expectation of a fundamental recovery. Under the consolidation of the policy bottom, whether the market's upward movement is a rebound or a reversal, or how sustainable the rebound is, it is important to focus on the expectation of fundamental repair. According to the latest data, the current domestic fundamental repair is still weak, and there are no obvious signs of improvement in micro enterprise profits. Monetary policy can bring some stimulus to the economy to a certain extent, but better stimulus still requires fiscal policy to take effect. However, with low expectations for fiscal policy to take effect, the expectation of a rapid economic recovery may still need to be verified. Under this, the market is still mainly judged as a rebound for the time being.
Thirdly, with the big direction established, strategic allocation is timely. Although the nature of the short-term upward movement has not yet been finally determined, under the overall economic recovery and the continuous policy effort, as well as the annual economic and social development goals, the overall trend of economic recovery and continuous policy effort is relatively established. For A-shares, whether from the overall valuation level or the cash dividend return rate, they have entered the value investment area, and investors can gradually start strategic allocation.
Finally, under the release of significant policies, investors can pay attention to three opportunities at this stage: first, financial institutions that benefit from the release of the central bank's policy combination; second, the trend of reducing existing mortgage interest rates, combined with the benefits of going overseas for industries such as home appliances and automobiles; third, under the stimulus of interest rate cuts, the real estate industry chain that has previously adjusted deeply.
