cookingmamacrypto| Heavy news came! This market is going crazy

The market launched by real estate may be beyond the imagination of the market!

Last FridayCookingmamacryptoReal estate continued to release, but the market once appeared a "domestic response, foreign positive response" situation, many people in the industry are still pessimistic. This morning, the China Financial Times, the media in charge of the central bank, once again said that there will be a significant drop in mortgage rates in the future.

China International Capital Corporation, the head brokerage, even said this morning that despite short-term game and event factors, the real estate market itself is moving in the direction of a slower downward slope, and the recent package of policies will help this cycle usher in a faster turnaround in the six-month cycle within the 12-month dimension.

The benefits of real estate also seem to be being passed on to physical objects. The consumer sector soared in early trading this morning. The futures market is even more crazy, with most of the main domestic futures contracts rising. Shanghai silver rose by more than 7%, soda ash and alumina by more than 4%, and Shanghai copper and nickel by more than 3%.

It is worth noting that the logic of inflation also began to show momentum at this time. This morning's data show that on May 20, pig prices in most parts of the country have risen to more than 8 yuan, with the highest price rising to 8.Cookingmamacrypto.3 yuan, the lowest price goes up to 7Cookingmamacrypto.3 yuan.

The deduction of real estate logic

The real estate logic lies in the blessing of the equity market is very obvious. Although the domestic response to the recent real estate policy is relatively lacklustre, from the perspective of foreign investment, it is heavy and positive. On May 17th, the net purchase of such funds was nearly 14 billion yuan.

In early trading this morning, we can see the outstanding performance of two types of real estate-related assets. From the perspective of the secondary market, consumer stocks are obviously stronger.

From the perspective of the futures market, the performance is even crazier. Among them, we have to say that soda ash, which is closely related to real estate, is up nearly 5% today, and Shanghai Bank and Shanghai Copper are also significantly stronger (although there are international factors, they are also closely related to the demand caused by domestic real estate policies).

Guotai Junan Securities released a research report saying that the strength of the current policy will help to improve the expectations of real estate fundamentals, and pay attention to the use of financial means and the promotion of local "trade-in". It is expected that the acquisition and storage of new houses will reduce the inventory of housing companies to the desired level within six months, which may require a capital scale of 2.6 trillion to 4.4 trillion, while the acquisition of the original price may require a financial discount of 0.8 percent.

China International Capital Corporation said that despite short-term game and event factors, the real estate market itself is moving in the direction of a slower downward slope, and the recent package of policies will help this cycle usher in a turnaround faster in the 12-month dimension of 6Mai. To end the rapid adjustment phase since 2021 and transition to a relatively stable phase. With the stabilization of the real estate cycle, the sector is expected to have a considerable revaluation market. Although there is a certain advance in recent trading, but the plate increase (cumulative about 40%) or has not yet overdrawn the potential height of the current round, you can maintain a positive attitude. If the subsequent stock price pullback consolidation, you can further increase the allocation.

According to an article issued by the China Financial Times, from the perspective of promoting the marketization of mortgage interest rates, the current situation is a better time window, the trend of economic recovery is increasing, and all parties have a deeper understanding of the major changes in the relationship between supply and demand in the real estate market. Further optimizing relevant policies is to comply with the trend. Brokerage Chinese reporters understand that many local governments have a strong desire to abolish the floor of local mortgage interest rates. Industry insiders judge that if the floor of mortgage interest rates is abolished in most cities across the country, there will be a significant decline in mortgage interest rates in the future, which will help to continue to release rigidity and improve the demand for housing purchases, and ease the pressure on real estate enterprises to pay back money.

The fulcrum of inflation logic

The logic of improving real estate will boost income expectations, and the reversal of income expectations is an important fulcrum for the strength of the price index. So this is also the starting point of the logic of inflation. The fulcrum of inflation logic is "pork". In early trading today, the pork index in the secondary market also rose sharply.

The logic of pork is to rise. The price of pigs in most parts of the country rose to more than 8 yuan on May 20, with the highest price rising to 8.3 yuan and the lowest price rising to 7.3 yuan, according to Agricultural production and Economic Information. Specific to various regions, the price of pigs in East China has risen to 7.8mur8.2 yuan, the price of pigs in southwest China has risen to 7.4mur7.9 yuan, the price of pigs in central China has increased to 7.6Mel 8.1 yuan, the price of pigs in North China has increased to 7.7Mel 8.0 yuan, the price of pigs in Northeast China has risen to 7.6mur8.0 yuan, and the price of pigs in South China has increased to 7.3Mel 8.3 yuan.

Data from Tianfeng Securities (601162) show that on the supply side, the previous pig fencing is basically over, and the current pig stock level is low (the trend in May 2024 is different from previous years, the price difference of standard fertilizer in mid-May is still positive, and pig prices are relatively strong), and last week they all fell back to 125.30kg (125.41kg the week before last week). On the demand side, due to the strong reproductive performance last Tuesday, there was a rush to buy pigs by second breeding and slaughtering enterprises for many days. The average weekly slaughtering capacity of sample enterprises decreased by 2.11% month-on-month, and the storage rate of frozen products in the slaughterhouse last week was 17.18%.

Huatai Securities believes that looking forward to the future, under the support of short-term (hurdle / Eryu continuous entry) and medium-term (tightening supply and demand pattern), pig prices are easy to rise and difficult to fall. Considering that pig prices continue to rise or drive stock prices, pork prices drive CPI or inflationary expectations, sow stocks are difficult to repair in the short term, or lead to opportunities for pig prices to exceed expectations.

How does the market interpretCookingmamacrypto?

At the moment, most money may not be aware of what the intensity of property policy means. The expectations of these policies may not be limited to the real estate sector, but to boost the overall level of the economy. This means that if the follow-up policy effect is less than expected, there will be stronger means. In this process, the equity market does not rule out that there will be a rising process.

Guotai Junan believes that expectations are no longer revised downwards and uncertainty is declining, which is the key driving force for China's stock market to rise. Different from the situation in 2023, when the stock market has high expectations and high positions but optimistic expectations continue to fall short, after years of adjustment and stock market fluctuations in early 2024, the stock market has shown the characteristics of low expectations, low expectations, and low positions. A low consensus implies potentially unexpected scope for return and a more positive response to marginal benefits. The key change in the current market is the decline in uncertainty in the economy, policies, and stock market, which will promote investors to improve risk acceptance, expected repair and position covering. Although there is still behavioral and thinking inertia despite the huge uncertainties in the past, it is manifested in weak data and stock market volatility. However, the marginal combination of stable RMB value + strong domestic demand policy + rising reform expectations has made China's asset logic smoother. In the middle of the year, investment opportunities dared to reverse layout, and the stock market fluctuated and rose.

Mou Yiling of Minsheng Securities said that resources should be more optimistic and opportunities in the large financial sector should increase. In the process of "moving away from the virtual into the real", China and the United States have jointly changed: in order to maintain financial stability, space has been given up for the rise in real asset prices. After resource stocks experienced a brief underperformance in relative earnings, the logic was strengthened: copper, coal, aluminum and precious metals, oil, resource transportation (oil transportation, dry bulk, etc.). In the "de-financialized" world of the financial sector, if tail risks are resolved, then the combination of rising earnings + killing valuations over the past decade will transform into opportunities for bottom earnings + valuation repair: banking, insurance and real estate.