Q4 stock market outlook｜Moderate monetary easing or continuation, market forecast for the fourth quarter is stable and positive

The overall market judgment: volatile upward

1. Global economic situation

At the end of September, the United States The first presidential debate is over, and Biden’s approval rating is rising again. On October 6, Biden delivered a speech titled "Fighting for the Soul of the Nation" at Gettysburg, calling on citizens across the United States to unite and reject division. Many media outlets, including the Washington Post, evaluated this speech as the best speech of Biden's career, and Biden's support rate further increased. As Biden's probability of victory increases, Wall Street has begun trading on policies that Biden may implement after taking office, such as new energy and other stimulus policies.

The United States has a strong influence on the global economy, and there are huge differences in political opinions between the two parties in the United States. Therefore, this election will have a huge impact on the future direction of the global economy.

Considering that we are currently in the liquidity easing stage under the influence of the COVID-19 epidemic, investors are highly sensitive. We expect that the market will remain volatile due to the impact of the election.

2. Domestic Economic Situation

In the third quarter, the domestic economy was in a stable recovery stage after the epidemic; during the National Day, consumer industries such as tourism and movies recovered one after another, and the economic trend was stable. Looking forward to the fourth quarter, the economy will most likely continue to recover along the trajectory of the third quarter.

Although the domestic economy is in a state of steady recovery, there are still certain internal and external disturbances. That is to say, domestically, the new crown epidemic may recur in the colder winter, which will inhibit the economic growth; and in the US election, whether Trump or Biden is elected, there are differences in their attitudes towards China. Certainty.

These concerns have caused companies to have concerns about capital expenditures and recruitment, and have also made the momentum of economic recovery not strong enough.

Therefore, in the fourth quarter, we believe that domestic monetary policy will also fully consider its role in countercyclical adjustment of the economy and remain moderately loose. This will allow the economy to recover more smoothly in the fourth quarter without disruption, or even slightly exceed expectations.

3. Stock Market Judgment

In October, the "Third Quarterly Report", "Biden-New Energy" policy expectations, and the "Fifth Plenary Session of the 14th CPC Central Committee" are about to be held. Under the triple expectations, the market is expected to perform well, especially the photovoltaic and new energy sectors, which have gained great recognition from the market.

Looking forward to the entire fourth quarter, we believe that the COVID-19 epidemic and the US election are still major uncertainties affecting the market. At the same time, the moderately loose liquidity in the fourth quarter may be more moderate than in the second quarter. Judging from the trading volume of the two cities, the single-day peak in July was close to 1.8 trillion, and there were a large number of hold-up orders near the 3,400 point of the Shanghai Composite Index.

Therefore, we believe that both economic certainty and investor confidence are under certain pressure near the 3,400 point level of the Shanghai Composite Index, which will make the rise in October less sustainable. , is expected to show a concussive upward trend with large fluctuations.

4. Configuration suggestions

Based on the above predictions, the potential investment opportunities we are optimistic about are:

1) Benefit from the technology field driven by government policies. For example, new energy vehicles, semiconductors, cloud computing, etc.;

2) Infrastructure that benefits from government investment, including traditional machinery such as construction and engineering machinery, as well as new infrastructure such as IT, 5G, and electrical equipment;

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3) According to the "one city, one policy", as the downward pressure on the economy increases, real estate and related industries are expected to be marginally relaxed.