洪灝：市场确认了一个重要的拐点（Market Inflection Point is C( 三 ) 原标题：洪灝

Macrovolatilitydisappearingacrosstheboard,exceptPPI.WeobservedthatVAI,CPI,GDP,earningsgrowthandmarketvolatilityhavebeendecliningacrosstheboardsincecirca2010-11,afterglobalmonetaryeasing.Wagegrowthlaggingbehindproductivitygaininducessocialinequityinincomeandthusunder-consumption.Oversupplyfromproductivitygainrelativetounder-consumptionfrominadequatelaborcompensationhassuppressedpricevolatility.

AsChina’shabitofsavingandinvestmentchanges,itsavesandinvestslesswhileconsumingmore.Pricestabilityensues.Asmoneysupplygrowthslowsandcreditexpansionisconfinedbythemantraofdeleveraging,anewsourceofliquidityisnecessaryfortheragingbulltochargeahead–eventuallyintoabubble.

AsymmetryinCPIandPPIvolatilitysuggestsalackofcorporatepricingpower;valuationtrumpsearningpowerindeterminingstockreturns–thekeytoprofitinChinesestocks.ThegapbetweenCPIandPPIisaproxyofcorporateprofitability.CPIbeinglessvolatilethanPPIsuggestscorporateslackpricingpower.Assuch,earningpowerisasecondaryfactorinstockreturns,asconfirmedbyouranalysis.Thatsaid,asthegapbetweenCPIandPPIexpands,asitisnow,profitabilityimprovesandhelpsstockperformance.

Monetarypolicy,adriverofchangesinvaluationmultiple,isthemostimportantinexplainingstockreturns.Assuch,themarketwillbecomemorespeculativeonpolicies,notless.Thereisnobullmarketbasedonfundamentals,but,instead,onsentiment,liquidityandleverage.Whenmonetarypolicyrules,markettimingpaysmorethanstockpicking.Butwhatisgivenbythecentralbankcanalsobeeasilytakenaway.Theseobservationsarecounter-intuitive.

USMZMgrowthclosetohistoricallows,andtendstocorrespondtoimportantinflectionpointsinChinesestocks.Additionalmarketliquiditycomesfromforeignbuyingandmargintrading,unlikelyfrommoneyandcreditgrowthasitusedto.Withstructuralmacrochanges,China’smoneysupplygrowthisunlikelytoacceleratesignificantlyasitdidin2009.Creditgrowth,confinedbythemantraofdeleverage,isunlikelytoexpandasitdidin2015.Otherliquidityingredientsarenecessarytoliftthemarketsubstantiallyhigher.