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Fall to doubt life, is there still hope for a reversal in the desperate market? input: ====== 请问有什么可以帮助您的吗? ====== output: May I help you with anything? input: ====== 那个海豚君分析得真透彻啊! ====== output: The Dolphin Analyst analyzes so thoroughly!

Hello everyone, I am Dolphin Analyst!

1. Another violent plummet

In the latest portfolio weekly report, Dolphin Analyst mentioned "Did the violent inflation of the Federal Reserve lead to increased domestic consumption?" The recovery of the US stock market is likely to be short-lived. The US stock market has once again fallen to the point where one doubts the meaning of life. The triggering factor is the August CPI announced by the US last week, which exceeded the market's expected limit again. After two months of respite, last week was a "high-risk" period approaching this week's interest rate hike, and funds have fled again.

The average weekly drop of the main indices that Dolphin Analyst closely tracks is basically around 4%. As we head into 2022, which is shrouded in the shadow of a US interest rate hike and balance sheet reduction, and has already passed three quarters of the year, except for the UK and Japanese markets whose decline is slightly better in single digits, the decline of absolute majority of markets is over 20%.

Among China's assets, although Hong Kong stocks and domestic internet assets are plummeting, the southward funds have begun to flow in significantly, but due to the fact that the majority of Chinese concept stocks are held by US dollar funds, and last week, in the case of already low valuations, they have followed the sharp decline in the US stock market. At present, the KWEB index has reached the level of the panic fall in mid-March.

As for A shares last week, with the RMB breaking seven, the expectation of an interest rate hike increasing, and northward capital outflows intensifying again, the US inflation act and the European act prohibiting the sale of products using forced labor have put significant pressure on high-valuation electronic new and photovoltaic sectors in China.

Fortunately, social retail data last week showed a marginal recovery in consumption (see "Despite the eye-catching growth rate, social retail is only weakly recovering"), especially in the growth of necessary consumption, which has relative resilience.

Therefore, last week, only necessary consumption performed slightly better, as well as a small repair in social services due to the relaxation of epidemic control in certain regions. But overall, all sectors mainly fell, and the difference was only the extent of the decline.

Four. Domestic: Consumption Repair, Real Estate in Dire Straits

If we have a look at the data released since August, it can be seen that the overall situation in China is gradually improving: the fixed asset investment acceleration rebounded in August, the year-on-year growth rate of industrial added value accelerated, and the new order index of both the manufacturing and non-manufacturing PMI, although still in a contraction zone, is also showing improvement.

Meanwhile, although the August social retail data can only be described as a weak recovery, positive signals can be observed in terms of the online shopping resilience, and offline accommodation and catering have also recovered relatively quickly (see Don't Be Fooled by the Bright Growth Rate, Social Retail is Only Weakly Rebounding).

Currently, only the real estate sector remains a daunting challenge: new construction area is still falling sharply on the basis of the low base of last year, with a significant drop in August.

Moreover, although the liquidity crisis facing real estate developers is still relatively high, the stabilized average house prices and the small recovery in new home sales area decline suggest that the completion area is improving.

These two points - the acceleration of new construction area decline, the beginning of improvement in completion area, and the recovery of transaction price - seem to point to one direction: the most important thing at the end of the year is to ensure delivery rather than new construction. Overall, the real estate sector is still poor, but it seems to be at its worst state, showing signs of bottoming out.

Overall, without taking into account the external factors that have caused the drastic market plunge, there are some signs of marginal recovery in China, although it remains weak. Meanwhile, in the context of continuous valuation and performance killing overseas, Chinese assets may finally have hope of turning things around.

Furthermore, in the weak recovery environment in China and with overseas interest rate pressures suppressing resource prices, it is highly likely that defensive consumption will have greater certainty in marginal recovery in the future. On the one hand, because they are currently relatively fairly valued, and on the other hand, because they are indispensable and have higher growth resilience in the weak consumption recovery, and the decline in raw materials under the interest rate environment is helpful to continue easing their cost pressures.

Four, Alpha Dolphin Portfolio Returns

Based on this, the Dolphin Analyst has already made significant adjustments to the holdings of the virtual Alpha Dolphin portfolio before the big drop last week (Reference: The Fed is Hammering Inflation, and Chinese Consumption is Coming Back?

channel = t3442815&invite-code = 276530) - Adjusting Portfolio against Market Dips

Alpha Dolphin's portfolio experienced a -3.7% decline last week, which was better than Shanghai Composite Index (-3.9%), Hang Seng TECH Index (-5.4%), and S&P500 (-4.8%).

The team reduced the weight of new energy holdings and increased the weight of consumer goods while increasing the cash position to mitigate the market's impact.

Due to the stock positions in Chinese and US assets not being significantly reduced, Alpha Dolphin's portfolio only outperformed the aforementioned indexes by a small margin.

Throughout the testing to last week, the portfolio's absolute earnings were 4.7%, and its relative earnings compared to the S&P500 were 16.1%.

VI. NIO, an Outstanding Candidate Amidst the Market Turmoil

As the market suffered a plunge, Alpha Dolphin's mock portfolio saw an appreciable decline. However, NIO, which took the place of Lixiang in the portfolio just before the market dip, made significant gains and contributed the most to positive earnings for the week, with a gain of over 15%.

While Alpha Dolphin didn't thoroughly explain NIO's logic besides its decision to include NIO in its updated lineup, a more detailed analysis can be found in the financial report analysis 《Do not be scared by the loss, NIO is getting closer to a brighter day》.

While observing the companies held in Alpha Dolphin's portfolio, as well as those monitored, the market environment of plummeting valuations affected companies with either high valuations or lacking market confidence.

VII. Portfolio Asset Distribution

Since Alpha Dolphin's internal testing on March 1st, the portfolio's overall profit reached 4.9% (including dividend income), while the earnings from stock holdings reached nearly 7%.

Alpha Dolphin's portfolio currently comprises 31 stocks, with only five being standard, and the remaining 26 being low-end stocks.

As of last Friday, the allocated asset distribution and equity asset holding ratio for Alpha Dolphin's portfolio were as follows:

Refer to the recent Dolphin Combination Weekly:

"Federal Reserve violently hammers inflation, but domestic consumption has come instead?"

"The world has fallen again, and the root cause of America's labor shortage is?"

"The Federal Reserve becomes the number one short seller, and the global market collapses"

"The bloodbath triggered by a rumor: Risk remains uncertain, looking for sugar in glass slag"

"The United States moves to the left while China moves to the right, and the cost-effectiveness of US assets is back"

"Layoffs are too slow and insufficiently acquired. The United States still has to continue to 'decline'"

"US stocks are "funeral celebrations": recession is a good thing, the most aggressive rate hikes are called bearish"

"Entering the second half of interest rate hikes, the opening of the "performance thunder""

"The epidemic will fight back, the United States will decline, and the money will change its mind" 《Chinese Assets at Present: No News is Good News in the US Stock Market》

《Is Growth Already a Frenzy or Is the US Definitely Declining?》

《Will the United States Suffer Decline or Stagnation in 2023?》

《US Oil Inflation: Will China's New Energy Cars Strengthen?》

《As the Fed Increases Interest Rates, Opportunities for Chinese Assets Arise》

《US Stock Market Inflation: How Far Can the Rebound Go?》

《Dolphin Investment Portfolio: Down-to-earth Investment》

Risk Disclosures and Policies for This Article: Dolphin Analyst Disclaimer and General Disclosures

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