A-shares lost on Monday, with the Shanghai index falling more than 3% and falling below the 2700-point mark.

Most analyses point to the meltdown of US stock futures on the day, a "crime of war."

On March 23, Beijing time, the three major US stock index futures extended their declines after opening lower, all falling more than 5%, hitting the fuse limit. As of 9:30 on the day, Dow Jones futures fell 5.01%, S & P 500 futures fell 5%, and Nasdaq futures fell 4.88%.

Stock index futures, which is an important leading indicator for US stocks, triggered a fuse on the opening of the market on Monday. Although the decline has narrowed since then, it can not help but make people sweat tonight for US stocks. U.S. stocks posted their biggest weekly drop since the financial crisis in 2008. Has it fallen through? With the strengthening of the linkage between A-shares and the external market, will there be supplementary declines in A-shares in the future?

Many financial institutions have given their own judgments on these issues.

(Comic) Photo by Zhu Huiqing issued by China News Agency

How much more US stocks will fall?

Northeast Securities: US stocks have gradually become a major destabilizing factor in global stock markets

Northeast Securities analyst Shen Zhengyang said in an interview with the China Express News Agency that the A-share fell on the day was mainly affected by the external market, especially the US stock index futures melted again in early trading on Monday, making people more worried about the US stock market; plus crude Commodity prices have also plummeted, and concerns about the recurrence of the financial crisis have gradually heated up, making some investors who previously believed that A-shares can strengthen against the trend, turn to caution and leave the market to hedge.

Shen Zhengyang further pointed out that with the decline of overseas markets, domestic investors also tend to be conservative, and the independence of A shares has weakened. One of the core observations on whether A-shares and even global stock markets can stabilize in the future is whether the US stock market can stop falling. Recently, due to the repetition of US public policies, such as the shelving of fiscal stimulus plans, the volatility of the stock market has sharply increased. US stocks that have skyrocketed have gradually become a major destabilizing factor in global stock markets.

Yuekai Securities: Limited liquidity transmission, difficult to solve the US stock market dilemma

Yuekai Securities believes that despite the Federal Reserve ’s recent quantitative easing policy, the “Volcker Rule” inhibits the transfer of funds from the banking system to the market, and the tight liquidity situation of US stocks under quantitative easing has not been eased. The core content of the rule includes "prohibiting commercial banks from using their own funds for high-risk stock trading and other businesses, and prohibiting commercial banks from acquiring hedge funds and private equity funds." This rule draws lessons from the subprime crisis and blocks the transmission of financial market risks to the banking system, but it also prevents the flow of bank funds to the capital market, reduces the ability of bank funds to intervene in the stock market, and makes it difficult to alleviate the liquidity dilemma of US stocks.

Bank of Communications International: US stocks have not bottomed out

In response to the recent rapid decline in US stocks, Hong Ye, Managing Director of Bank of Communications International said:

First, there is no way to respond to the epidemic with monetary and fiscal policies, so even the Fed's easing policy is useless. If the market has no confidence in saving the market, it will choose to redeem its chips.

Second, the market's position is very concentrated, all concentrated in stocks such as Microsoft, Apple, Google. Once the plunge occurs, the sell-off will occur centrally.

Third, after 11 years of bull market in the US, the stock market valuation is at a high level, basically returning to the level of the 2000 Internet bubble.

Hong Yan believes that the US stocks have not yet bottomed out. According to past experience, the decline in bear markets can generally reach 50%. If it was a super bear market in 1929, it could reach 90%, and now it has fallen by less than 30%. The entire market is currently lacking in liquidity, and a landmark case similar to the collapse of Lehman Brothers is expected.

Will A shares make up for the future?

CICC: Expected A-share profit decline by 15% in 2020

CICC believes that the overseas epidemic situation continues to escalate. According to the latest situation, its equivalent impact on the economy may be similar to or even more than the equivalent impact of the 2008 financial crisis. Due to the impact of domestic and global "anti-epidemic", it is expected that the profit growth of A-shares will decline by 15% year-on-year in 2020. The first quarter's performance will be greatly affected by the domestic epidemic, and the impact of overseas epidemic fermentation will increase in the second quarter. .

CICC said that considering that China is currently encouraging full-scale resumption of work, and compared with overseas economies, China has relatively large space for monetary, fiscal and industrial policies. In addition, the current valuation of A shares is already close to the beginning of 2016 The low level caused by the meltdown and the devaluation of the RMB. Although historically, it is very difficult to accurately confirm the bottom, and the current medium-term and long-term attractiveness of valuations is already attractive.

China Merchants Securities: A shares currently have two new risks

China Merchants Securities believes that there are currently two major risks in A-shares. On the one hand, most countries around the world are actively adopting epidemic prevention and control measures. It is expected that the impact on China ’s external demand in the next one to two quarters will exceed previous market expectations. On the other hand, with the The impact of the epidemic on US stocks and the US economy, and the Trump administration's political tendency to shift the focus of conflicts, may become an important risk for A-shares in the future. At the same time, the market is also faced with good news including the acceleration of domestic resumption of work and resumption of production and continued construction of infrastructure. In general, the current market turnaround and risks coexist, and A shares will absorb negative and improve reflections in the future. "Pure domestic demand" is the main direction of the next phase of the layout.

Bank of America Merrill Lynch: Relative Hedging of Chinese Assets

Qiao Hong, chief economist at Bank of America Merrill Lynch Greater China, said the global economy is expected to fall into a full recession in 2020. It is predicted that the economic growth rate of the United States this year will be -0.8%, and the previous forecast was 1.2%, which is a very huge adjustment. At present in the asset market, downward pressure on asset prices must exist. Whether it is the epidemic resistance situation or the global economy is in recession, it is difficult for any country to survive alone. However, among different assets, the advantages of Chinese assets are relatively low in terms of valuation. From the point of outbreak and recovery, China is ahead of other countries and regions. At this time, Chinese assets may be relatively Said to be more hedged.

Bohai Securities: A shares fall out of price / performance ratio

Bohai Securities believes that the current external systemic risk is the main risk faced by A shares. Because A shares are also risk assets, it is also difficult for A shares to stand alone when global capital seeks liquidity and hedging. However, due to its low position, A shares are also in a period of falling out of cost performance. For investment, the current point of time tests the ability of risk management and control. If it is not due to factors such as leverage, redemption, risk control, etc., it may be considered to gradually increase the allocation.

New Times Securities: A-shares will have an absolute bottom in the second quarter

New Times Securities said that from the perspective of stock market valuations, A shares have entered the bottom area, and the stock market's price-performance ratio has reached the level of the fourth quarter of 2018 compared to bonds. But if you look at 1-2 quarters, you still need to make clear whether it is a V-shaped bottom or a shock bottom. The key to the V-shaped bottom is that everyone knows the negative impact and can "predict" it. At the same time, they can find at least one quarter of capital easing period or policy easing period to raise their valuation. The current pattern is the impact of the epidemic. Although everyone knows the impact on the economy is not predictable, especially the deterioration of price and inventory data may lag the epidemic. The negative impact of the epidemic on the Chinese economy must wait as long as three months. Quarter.

New Times Securities believes that the bottom of the stock market is between the bottom of the policy and the improvement of the economy, and the bottom of the market is expected to be in the second quarter. Of course, it may be too late to wait until the economy has improved significantly before participating in the stock market. The future period of A shares may be similar to the bottom of the shock in the fourth quarter of 2018, and the absolute bottom may be in the second quarter. It is recommended to pay attention to the strength of the steady growth policy before and after the two sessions. (Author: Chen Kangliang)