Rising rally, rising interest rate
The US Federal Reserve is showing a more hawkish policy stance on confidence in the economic recovery, and the stock market has begun to show the burden of a steep rise in interest rates.
Although the central banks are expected to maintain their monetary easing or monetary policy normalization, the stock market is expected to become more aggressive due to rising interest rates for the time being.
◆ Despite recent rally, investors are looking for risk factors. Especially recently
The stock price rally is mainly due to the surge in valuations, so I feel uneasy.
We recommend a re-rating in 1 and 2 and 3 and risk management in 4.
There will be no meaningful adjustment (more than 10%) until 3Q to sell shares.
However, we believe that the share price will fluctuate due to the rise in interest rates in February ~ March.
Up until now, unlike expected inflation, rising interest rates are likely to be due to increased risk.
And this is a negative factor in the recent surge in valuations.
We present three strategies for responding to these risks. Stock fluctuations can occur frequently in February and March.
We should pay attention to KOSDAQÊs P / B (net asset value) ratio, which has skyrocketed. It is necessary to cope with low PBR rather than high PBR.
We also look at financial shares, which are interpreted as favorable among low-PBR shares.
This stock price correction is a good buying opportunity. Investors who have missed the timing of funding or failed to hold growth stocks such as the KOSDAQ bio should utilize the fluctuations in share prices.
◆ The market considers 3% interest rate as a critical point, and is wary of interest rates at the moment when it surpassed the 2.7% level due to a rapid uptrend.
One of them is that stock prices of US homebuyers are showing a sharp decline.
DR Horton, Rena, NVR, and others are engaged in businesses such as housing construction, rental, and mortgage in the United States.
Their stock prices have plummeted since the 10-year US Treasury yields peaked in the first half of last year. The housing market, where a steep rise in interest rates is a burden, seems to be a warning about interest rates.
The Federal Reserve is showing a more hawkish policy stance based on confidence in the recovery of inflation, and the market has begun to partially reveal the burden of a steep rise in interest rates.
This suggests that the market's sensitivity to the FOMC meeting in February and the FOMC's pre-March FOMC policy and interest rates are likely to increase.
Given that expectations for a gradual increase in interest rates were on the rise, we believe that the sensitivity of the stock market to interest rate fluctuations may increase for the time being
◆ The recent surge in interest rates seems to have exerted excessive reaction to investors' risk appetite due to the global economic upturn.
The BOJ, ECB, Fed, and other major central banks have shown their intention to maintain the current monetary easing or monetary policy normalization trend, so the possibility of a surge in interest rates is unlikely.
It is necessary to keep an eye on the interest rate level in the course of the global bond yield growth.
A sharp rise in interest rates can be a threat to stock investment.
Traditionally, bond yields have put investors at a premium by lowering the stock market premium.
In particular, the higher the valuation, the higher the burden.