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The first half of 2020 passed and the "historical concentration" of the financial market was too high. More magical in the second half of the year?
Jul 1,2020 08:04CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM News: unwittingly, 2020 has passed halfway. In half a year, the Xinguan pneumonia epidemic has spread around the world, and we have witnessed too much history: four circuit breakers in US stocks and an overnight "negative" in international oil prices. The absolute price fluctuations and spreads of many varieties have exceeded investors' previous perceptions. Can your little heart stand it? With the collective release of water by central banks around the world and the recovery of demand, many varieties have come out of the trough and out of the "V" market. What are the investment opportunities in the market in the second half of the year, and will the magic market happen again?

The stock index is out of the "V" market.

Yesterday was the last trading day in the first half of 2020. A shares opened higher in early trading and repeatedly consolidated at high levels after oscillating upward. Both the Shenzhen Composite Index and the gem Index reached new highs in the past four and a half years, and continued to oscillate at high levels in the afternoon. On yesterday's market, securities firms and insurance companies forced the market, while electronic manufacturing, consumer retail, park development and semiconductor industry chain showed a strong performance, while only the automobile industry chain fell into adjustment. At the technical level, analysts believe that Prev forcefully broke through the 3000-point mark under the cover of weight, the chips above the heavy pressure area were loosened, the follow-up efforts of funds were not strong, the amount could not be effectively magnified, and multi-party strength was not enough to support a breakthrough. short-term high fall will be a high probability event.

Looking back at the first half of 2020, as the new crown pneumonia epidemic spread rapidly around the world, the global economy was seriously affected, and central banks and governments of major economies implemented a large number of unprecedented loose stimulus policies. Between late February and mid-March, huge uncertainty caused by the epidemic hit global stock markets, with the US Dow and the S & P 500 tumbling more than 35 per cent, both hitting their lowest levels since the fourth quarter of 2016 and the only five circuit breakers on record, four of which occurred in March this year.

As of yesterday's close, the Shanghai Composite Index fell 2.15% in the first half of the year, the Shenzhen Composite Index rose 14.97%, the gem Index rose 35.60%, and the small and medium-sized Index rose 20.85%. In the case of the spread of the new crown pneumonia epidemic around the world, A shares have stepped out of the leading global market, drawing a perfect full stop for the first half of the year.

Generally speaking, the stock index has gone out of the "V" market, and the characteristics of global market differentiation are becoming more and more obvious. "in fact, the market offered a lot of investment opportunities in the first half of the year." Yongan futures analyst Hua Xiang said. Judging from the half-year trend of the global stock index, A shares are on the strong side. In the course of the decline in March, compared with the nearly 30% decline in the European and American stock markets, the domestic stock index was more resistant, with the Shanghai 50 index and the CSI 300 index falling by about 10%, while the CSI 500 index fell even less. The main reason is that the domestic measures to prevent and control the epidemic are more powerful and effective, and the overall valuation of the domestic stock index is lower than that of other stock indexes in the world.

With regard to the differentiation of the domestic stock index itself, Huaxiang said that the CSI 500 has performed better than the other two stock indexes this year, mainly because the industry distribution of the CSI 500 has a relatively high content of science and technology and medicine. It has benefited more from the science and technology theme since 2019 and the medicine theme since this year. In addition, the CSI 500 futures spot discount is relatively deep, there is a better safety pad, and the weakness of the CSI 500 in the previous two years makes its valuation is also in a more attractive position.

He believes that the rebound in global stock indices is justified because economic data from April to June support the recovery of the global economy from a heavy blow, and the Fed's asset purchases provide sufficient liquidity for the market. "but it should also be noted that US stocks are currently in a state of high valuations, and that the uncertainty of the epidemic and the slowdown in Fed expansion will pose risks to them." Given the linkage of global stock indices, this is the main source of the downward drive of domestic stock indices, he said. The domestic stock index will continue to be stronger than overseas in the future, and it is still optimistic about the main line of science and technology for a long time. If it falls due to overseas involvement, it is a good time for layout.

Crude oil is the "most historical commodity" in the first half of the year.

Crude oil won the title of "most historical commodity" in the first half of 2020 because of its strength. In the second quarter, under the influence of the epidemic and reservoir expansion, superimposed the "forcing more" effect produced by the market trading structure, the contract price of WTI crude oil futures 2005 fell to-37.63 US dollars per barrel on April 20, opening up an unprecedented negative oil price in human history.

"in the first half of the year, crude oil went out of an obvious digging market, with an overall trend of falling first and then rising." Wang Wenlin, a senior analyst at Zheshang Futures Chemical Industry, said that the epidemic is an important variable that caused crude oil to "fall into the sinkhole" this year. According to him, a new crown pneumonia outbreak broke out in China in January, and measures were taken to close the city. By late February, the epidemic broke out overseas, and home orders were implemented in Europe and the United States. China, Europe and the United States successively fell into economic stagnation, and refinery starts plummeted. Falling demand led to lower crude oil prices. Subsequently, the crude oil market entered a double negative stage of supply and demand. In March, the OPEC+ production reduction negotiations broke down, Saudi Arabia increased production and lowered the protection share of official sales prices, and prices continued to fall under the double negative pressure of supply and demand. In April, OPEC+ reached a three-stage production reduction agreement, the first stage is to cut production by 9.7 million b / d, of which Saudi Arabia will cut production by an additional 1 million b / d, which will be implemented in May, but continued high production from March to April led to rapid filling of global storage capacity, concerns about insufficient tank capacity led to continued downward oil prices, and WTI showed a rare negative price due to insufficient Cushing deliverable capacity. After May, oil prices began to pick up at a low level due to cuts in OPEC+ and shale oil production on the supply side, large purchases from China on the demand side and expectations of a resumption of the economy in Europe and the United States.

"overall, the main line of the market in the first half of the year has been around the development of the epidemic, with absolute price fluctuations and price spreads exceeding previous perceptions." Wang Wenlin said that for the second half of the year, he tends to continue to oscillate upward in oil prices.

According to him, from the supply side, although OPEC+ will enter the second stage of 7.7 million b / d production reduction in August, and the excess production reduction in Saudi Arabia and other countries will also return in July, judging from the current production reduction situation, OPEC and 10 non-OPEC countries still need to reduce production by an additional 1.55 million b / d in June to fully comply with the OPEC+ agreement, so OPEC production will not increase significantly in the second half of the year compared with the current level. It is still expected to maintain a relatively high rate of production reduction.

At the same time, the growth of crude oil production in the United States is not optimistic. the current output has dropped by 2.1 million barrels per day from its high. although shale oil has the characteristics of rapid production, the current price level does not have the power of large-scale production, and judging from the number of drilling rigs, the number of active drilling rigs has dropped to the lowest level in 10 years, and it will take some time from production input to real output, and insufficient fracturing in new wells may lead to further decline in future production. Therefore, it is difficult to see a substantial increase in production in the second half of the year compared with the current level

As far as the demand side is concerned, Wang Wenlin believes that the epidemic is still the biggest factor affecting demand. Judging from the current number of new pneumonia cases around the world, the number of new confirmed cases overseas in a single day is still at a relatively high level, and the subsequent governments of various countries are expected to alleviate the epidemic to a certain extent under strengthened control and high summer temperatures, and the current economy cannot afford a second stagnation, and the worst stage of demand has passed, focusing on the extent of improvement in the future.

Precious metals are the best performers in the commodity market.

Gold has always been one of the most "actors" in the commodity market, and its experience in the first half of 2020 is also very rich. Gold prices have experienced huge ups and downs since the first quarter, especially after a deep "V" reversal after hitting a nearly seven-year high of $1704 an ounce in early March. "the logic of the sharp decline in early March lies in deflationary expectations and liquidity runs caused by the overseas epidemic and the collapse in crude oil, while the V-shaped reversal in the second ten days is more from the structural spot pressure in the COMEX market." Wang Rong, chief researcher of non-ferrous and precious metals in Guotai Junan Futures.

In the second quarter, gold prices fell into high consolidation after hitting a year-on-year high of $1788.8 an ounce at the beginning of the season. Wang Rong said that in terms of interest rate pricing, real interest rates in the United States continue to fall, which is supposed to provide an upward drive for gold prices, but the actual performance of gold prices is different from it. "behind this differentiation, the core disturbance factor is the squeeze of asset allocation funds." She explained that with the rebound in the US stock market in the second quarter under the expectation of resuming work and production, asset allocation funds began to re-embrace risky assets, abandoning safe-haven assets, and gold was given the cold shoulder. Therefore, even though the interest rate drive still provides upward impetus for gold, the demand for capital allocation suppresses the rise of gold prices, resulting in gold finally showing a dilemma.

For the future, "Gold gets technical support in the short term, and the medium-term upward trend remains unchanged." Wang Rong believes that, first of all, the global epidemic, including China, is still in a repeated stage, and there is still a need to be wary of renewed risk aversion in the market. There is support at the bottom of gold and silver in the absence of another outbreak of a dollar liquidity run, such as the US dollar liquidity run in March this year, which has recently remained loose supply of offshore dollar liquidity. Second, she said, judging from the pricing of real interest rates, the downward trend of nominal interest rates remains certain, and as long as inflation expectations do not turn to deep deflation, the direction of precious metals remains upward. At present, the Fed has not confirmed the issue of managing (YCC) on the yield curve, but it is difficult for nominal interest rates to be driven upward until the US economy fully recovers. If the market speculation at this stage is expected to resume work and production, gold and silver prices should be supported upward. Finally, short-term market expectations of "negative interest rates" remain calm, but "negative interest rates" may still be an option for the Fed. At present, the demand for medium-term gold allocation is still determined, but we still need to pay attention to the risk of periodic decline.

Du Fei, a futures researcher at Jinrui, also believes that the Fed is expected to maintain a long-term QE and low interest rate environment. The government debt ratio has broken through an all-time high, and the leverage ratio of the corporate sector has reached 75%, exceeding the all-time high in 2009. In order to reduce debt risk and ensure refinancing of the government and corporate sectors, the Fed is expected to cooperate with the Treasury to make a move similar to long-term low QE+ interest rates after 2008, which will be good for gold prices in the long run.

"the growing discussion of the control of the US bond yield curve will also be good for the price of gold." Du Fei mentioned that Federal Reserve Chairman Colin Powell said in a speech in mid-June that he would discuss the management of the yield curve in the future. " In short, the yield curve control is that the Fed keeps long-term interest rates low through long-term purchases of long-term Treasuries. This interferes with the yield curve through the means of the central bank, although it can prevent the yield curve from being upside down, but it will make the trading attractiveness of US bonds less attractive and will continue to boost investment demand for US stocks and other assets such as gold. it will also be good for the price of gold on the other hand. Overall, du Fei believes that the price of precious metals can continue to be bullish, and the price of London gold may reach 1850 US dollars per ounce this year. But watch out for the risk of a periodic repair of the US economy that temporarily depresses the price of precious metals.

Non-ferrous metals are still the "most IN" commodities.

For the big "V" type of "trend" trend, non-ferrous metals are not absent, falling collectively in the first quarter and rising collectively in the second quarter. Non-ferrous metals are still one of the "most IN" sectors of the commodity market.

"the overall trend of non-ferrous metals in the first half of 2020 also showed a'V 'shape." Zheng Jingyang, an analyst at South China Futures, told Futures Daily that the collective drop in non-ferrous metals in the first quarter was mainly due to concerns about the outbreak of the liquidity crisis. The sharp rise in non-ferrous metals in the second quarter, on the one hand, was to repair the previous sharp decline caused by tight liquidity, on the other hand, a strong recovery in domestic demand led to higher-than-expected destocking.

Zheng Jingyang said that the outbreak of Xinguan pneumonia in January led to growing concerns about economic growth in the market. Moreover, with the accelerated spread of the epidemic overseas, pessimistic demand expectations led to the overall weakening of non-ferrous metals, but the real collapse occurred after the collapse in oil prices and stock markets, when dollar liquidity was most tight.

After the sharp fall in US stocks in March, the Fed adopted an extremely loose monetary policy, cutting its benchmark interest rate directly to zero and adopting a crisis-time response model, which opened an unlimited amount of QE, to expand substantially in just two months. As a result, the liquidity squeeze was significantly alleviated. And after the relief of the epidemic in China, economic activities gradually returned to normal, infrastructure and real estate showed strong resilience, and non-ferrous metals rebounded collectively.

Among them, copper rose a lot because of its strong financial attribute. In addition, the increase in aluminium is not small, mainly because as housing completion continues to pick up, real estate back-end demand has increased consumption of copper and aluminum, and inventory demolitions of copper and aluminum in the first half of the year are much higher than in the same period in previous years. " Zheng Jingyang said.

For the second half of the year, in the face of the recurrence of the new crown pneumonia epidemic, the Fed is likely to continue its previous loose monetary policy. In Zheng Jingyang's view, in the context of a weak dollar, the promotion of overseas funds will lead to the rise and fall of non-ferrous metals as a whole. Among them, copper and aluminum still have a lot of upside, mainly because of the strong economic recovery in China, the largest consumer of non-ferrous metals, and the demand resilience of copper and aluminum is expected to be maintained.

He explained that in the face of the impact of the new crown pneumonia epidemic and the downward pressure on the economy, infrastructure investment has become an important starting point for stabilizing the economy. It is mentioned in this year's government work report that increasing the issuance of special bonds and the proportion of special bonds used in infrastructure construction will provide sufficient sources of funds for infrastructure investment, so infrastructure growth is expected to remain high throughout the year, and consumption in the power sector is expected to be better.

Since 2019, real estate enterprises have changed from "rush construction" to "rush delivery". From 2018 to 2019, the proportion of short-term housing behind the sales area of real estate enterprises continues to reach a new high. there will be a large number of short-term houses waiting to be delivered in these two years, driving the continuous recovery of real estate completion, and real estate-related consumption is also expected to benefit, including air conditioning. Therefore, copper and aluminum are expected to perform strongly in the second half of the year against the backdrop of low inventories and strong demand.

Nickel and zinc are still relatively weak. Zheng Jingyang said that although Indonesia's early mining ban led to a relatively tight supply of nickel ore, the release of new nickel iron in Indonesia and the increase in shipments of Philippine nickel mines will lead to a relative surplus of domestic nickel iron supply, superimposed by the current poor profits of stainless steel mills, which will also limit the rise of nickel prices, so there is limited room for nickel prices to rise in the second half of the year. The upward momentum of zinc prices is also weak, mainly because in the mine-end expansion cycle, the overall oversupply of overseas zinc mines has been slowed down by the epidemic, but it is expected to still occur.

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