May Market Or Enter The Shock Mode Valuation Repair Cycle To Switch To Growth Cycle

After a sharp rise in the first quarter, the A share market in April showed a high volatility pattern, and the paction volume also shrank. It has been the largest margin increment source of the A share market, and the purchasing power of the northbound capital has also weakened rapidly. In May, the market has entered into a concussion mode.

It is undeniable that the start up of the 2440 point market is largely driven by the strong driving force of valuation recovery.

On the one hand, the fourth quarter 2018 A shares callback is more obvious, the valuation data has been at a historic low.

On the other hand, after November 2018, the warming of market opinion is getting more and more obvious. It is not only the optimistic expectation of the upgrading of the capital market function caused by the launch of the science and technology board, but also the easing of liquidity policy, which makes the valuation recovery of the A share market strong.

Both domestic and foreign institutions actively take the initiative to raise positions, there is also a large increase in capital and large holdings in the north, which drives the A share market to appear in the first quarter of the general market, and also has the A stock first quarter valuation recovery market.

However, after a substantial rise in the first quarter, A shares have basically gained more than 30% of their share price.

This means that the valuation of A shares has been reasonable, and at least there is no serious underestimation.

This has also been corroborated by the relevant data, for example, the Shanghai and Shenzhen 300 index earnings return to around 18 times, for example, the difference between the dividend rate of the CSI 300 Index constituent stocks and the yield of the ten year treasury bond returns to normal level, for example, the A share and H-share premium rate once again returned to around 130%, and such data and related information show that the A share's further rise has weakened. This is also the inducement of the northward capital's net outflow in April, and also the inducement of the A share's high volatility and consolidation in April.

However, this does not mean that the A share market will fall sharply in May.

First, the medium-term trend of the A share market is not only the two direction of the rise and fall, but also one direction is sideways shocks.

Just like the three quarter of 2017 to the first quarter of 2018 has been around the 3200 point for the central repeatedly saw the trend of oscillation.

Therefore, after a quarter of the valuation recovery, the high volatility in early April, A shares in May is still expected to continue the pattern of high and volatile.

The two is that the background of monetary policy backed by the A share market is indeed contracted in the first quarter, but whether it is macroeconomic data or public opinion on the stock market, it is still more positive and optimistic, for example, information on the launch process of the science and technology board.

So, in May, the A shares weakened, but there was not enough energy to fall.

In addition, there will be a series of positive information stimulation in May.

For example, in April, net capital reduction in the North may also show a net inflow in May.

After all, the MSCI index increased the weight of A shares into the index factor from 5% to 20%, and May is the first time node.

Therefore, the net inflow of northbound capital is available, which will become a new marginal increment fund for A shares.

For example, the implementation of the value-added tax reduction policy, which began in April, will reflect the corresponding benefits in the April economic performance data released in mid May, which will bring new willingness to do more to A shares.

To sum up, for the trend of A shares in May, it is not pessimistic, mainly because the environment is acceptable.

Not optimistic, mainly because valuations are not too cheap, and lack of strong catalyst for ascension.

That is to say, the probability that the Shanghai Composite Index will continue to oscillate at 3200 points and one line still exists.

Among them, the new blue chip stocks may be leading the market. First, thanks to the fact that a quarterly report has been announced in 2019, all funds will excavate the industry that is expected to continue to grow rapidly in the first quarter from the quarterly quarterly reports. It is just like the quarterly report of the 5G and other stocks of the Internet of things, which is beyond expectations. We can also dig out the new dragon head stocks that the industry continues to lead, for example, the performance of Ping An Bank and China Merchants Bank in the bank shares is showing a trend of rising, which will inevitably lead to the continued increase of the new capital, and thus lead the stock prices of the stocks to oscillate forward and forward again and again. 5G

In May, the opportunities were mainly focused on the varieties that the performance is expected to continue to grow, especially those with new growth momentum in blue chips.

For example, the food and beverage industry's beer shares, snack food stocks and financial industry resources further focus on the top of the industry.

In addition, 5G, big data, cloud computing and other industrial structure are becoming stable, but the growth of performance will further enhance the share of the head.

These new blue chips will become the highlight of the May market and an important pillar of the A share market trend.