Prospects for trade talks, prudent technology stocks, heavy losses in A-shares, good policy, and the fourth quarter market is still optimistic

On the first day of the National Day holiday, the A-shares rose first, and the Sino-US trade negotiations continued to plague the market performance

Among them, the Shanghai Composite Index and Shenzhen Composite Index rose 0.29% and 0.3% respectively; the GEM Index fell 0.67%. The analysis estimates that the performance of A-shares may remain sluggish this month, but believes that in the global central bank’s loose tide and the efforts to refuel the Chinese economy, the RRR cuts, potential interest rate cuts and continued favorable policies are expected to be optimistic in the fourth quarter.

On the one hand, the PMI of the newly announced Caixin service industry recorded a 7-month low, and the market will introduce more stimulus measures in China; on the other hand, the United States will join 8 Chinese companies in the trade blacklist, which will soon be launched by China-US trade. The consultation added a haze. The Shanghai Composite Index and Shenzhen Composite Index rose 0.96% and 1.17% in the early session, and the closing gains narrowed, closing at 2,913.57 and 9474.75 points respectively. On the GEM, Hikvision and Dahua were suspended from the US blacklist on the trade, and many technology stocks fell in the afternoon. The index also rose by 0.69% to close at 0.67%.

Foreign capital continued to flow into 2.5 billion sweeps

In terms of transactions, the transaction volume of the two cities yesterday rose 6% to the last trading day before the holiday, to 373.56 billion yuan (RMB, the same below). On the same day, the net inflow of funds from the north was 25.17 billion yuan. The net inflow of Shanghai Stock Connect and Shenzhen Stock Connect was 730 million and 1.787 billion yuan respectively.

Hu Xiaohui, the chief investment officer of the Federal Reserve Securities, said that the current macro environment is very complicated. Internationally, the US election process is confusing and will inevitably affect the US stock market; the UK’s Brexit, US-European trade war has increased uncertainties. Whether the Fed will continue to cut interest rates in October, whether China will follow up, and the gradual proliferation of the US technology blockade against China are worthy of attention. Domestically, from the semi-annual report, only a few industries have seen positive earnings growth, and both the growth rate of both import-dependent and non-dependent enterprises have declined. The profit prospects of enterprises are also worrying and the pressure on the market has increased. “A-shares are expected to be in a downturn in October, and investors are advised to wait for the opportunity to lower their positions."

Shannon Capital Shen Meng is also concerned. In October, there were several important economic and trade events and conferences, including the 13th round of China-US high-level economic and trade consultations and the 19th Fourth Plenary Session. The impact on the market is large, and the A-share trend may also be Will fluctuate as the relevant events progress.

Global loose tide risk appetite improvement

However, Yuanda Investment believes that in the fourth quarter, under the conditions of the US interest rate cut cycle, it is expected to further promote the global central bank’s loose tide, China’s domestic policy will refuel, and under the conditions of deepening reform, A shares are expected to usher in profit and capital. And improvement in risk appetite. The short-term market can consider further returning to the fundamentals after the risk preference is cooled down. The structural market is still there, and the red October is expected.

Pacific Securities is optimistic about the fourth quarter market for three reasons. First, after the phasing of trade negotiations and the rebound of the economic accident index, the global asset allocation risk appetite has increased; second, the marginal improvement of corporate earnings expectations after the inflation expectations rebound; thirdly, the RRR cuts, potential interest rate cuts, and market policy levels are positive.

From the perspective of liquidity, CITIC Securities’ research team pointed out that the overall liquidity easing in the world has been determined, and the consensus on liquidity easing in the Mainland will be re-aggregated; from a policy perspective, the need for policies to stabilize growth in 2020 is still rising. The next one to two months is still a good investment window.

Huachuang Securities also believes that under the conditions of the US interest rate cut cycle, it is expected to further promote the global central bank’s loosening tide, China’s domestic policy will refuel, and under the conditions of deepening reform, A shares are expected to usher in a triple improvement in profitability, capital and risk appetite expectations. . Entering the fourth quarter, the intermediate rebound market can be expected.

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