Summary of Institutions' Views on Financial Markets on November 23

On November 23, the organization summarized its views on domestic and foreign stock markets, commodities, foreign exchange, and the central bank’s policy outlook.



1. Bank of America Securities predicts that gold will rebound;

①Bank of America Securities said that as the focus of the gold market shifts from the Fed's tightening of monetary policy to the restriction of interest rate hikes, gold should rebound;
②The Bank of America Commodity Research Group predicts that the price of gold will rise by 5.2% in 2022 to US$1925 per ounce and 10.4% in 2023 to US$2049 per ounce

2. Bank of America is short on stocks, saying that technology stocks are the "mother of all bubbles";

① Michael Hartnett, a strategist at Bank of America, led the release of a report saying that Bank of America is bearish on the stock market in the next year and said that capital preservation will become the theme. There will be an "interest rate shock" in 2022, following the "inflation shock" in 2021 and the "growth shock" in 2020. The financial environment will tighten, short-term interest rates will rise, quantitative easing will end, yield curve inversion will become a threat, and earnings per share growth will slow down sharply;
②The basic situational assumption of strategists is that after "cryptocurrency, credit and U.S. stocks have risen sharply for 18 consecutive months", the return on assets in 2022 will be low or negative and fluctuate greatly.

3. Nomura Securities: Powell's re-election as the chairman of the Federal Reserve can reduce market volatility;

Nomura Securities said that allowing Powell to continue as chairman of the Federal Reserve will provide continuity for the Federal Open Market Committee and the Federal Reserve's policies, which will help ease financial market volatility. Taking into account the current macroeconomic and political background, if moderates are allowed to replace Powell, it will cause great risks to the United States. It is expected that Powell won’t have any difficulty in getting nomination and confirmation in the Senate because he has broad bipartisan support.

4. Holland International: Powell's nomination eliminates certain uncertainties;

Padhraic Garvey, head of global debt and interest rate strategy at ING Groep NV, said that Biden’s decision to nominate Powell eliminates the uncertainty caused by Powell’s current term to the end of February. If the appointment of a new chairman is delayed due to lack of political support , It may cause serious tension in the financial market. Therefore, now that the market has gained continuity, it should be able to minimize the substantive impact

5. Brown Brothers Harriman Bank: If inflation rises, it may trigger the Fed to cut back and raise interest rates shortly after the end of quantitative easing;

The Brown Brothers Harriman Bank said that in view of the sharp net reduction in US jobs and the expected slowdown in inflation growth, most Fed officials believe that the Fed is not in a hurry to raise interest rates. However, some Fed officials may also make it clear that if there is an upside risk of inflation, it may trigger the Fed to raise interest rates shortly after the end of quantitative easing.

6. Deutsche Bank: The crude oil market continues to be tight, but the U.S. output will increase next month;

① The crude oil market is still tight in the short term, which will provide support for oil prices. However, since shale oil production is expected to hit a new high since April last year, the supply of US crude oil is about to increase. Last week Russia, Saudi Arabia and the UAE refused to increase production further. However, the U.S. Energy Information Administration (EIA) predicts that U.S. shale oil production in December will increase by 85,000 barrels/day to 8.32 million barrels/day, of which Permian Basin production is expected to increase by 67,000 barrels/day, a new single day. record;
②The increase in shale oil production in the Permian is the main reason for the increase in U.S. crude oil production predicted by EIA, but overall U.S. crude oil production is still low, which may prompt US President Biden to call on the domestic oil industry to increase production.

7. Bank of America strategists are bearish on the market and are expected to usher in an "interest rate shock" in 2022;

① Bank of America strategists are bearish on the market next year and call on investors to focus on keeping cash, because inflation and rising interest rates will lead to a reversal of global asset prices.
② Strategists such as Michael Hartnett listed macro trading recommendations in a report to clients, including long volatility indicators, oil, energy, U.S. dollars and physical assets. They wrote that after experiencing the "growth shock" in 2020 and the "inflation shock" in 2021, investors should prepare for the "interest rate shock" in 2022.
③ The above forecast of Bank of America is in sharp contrast with the bullish views of other Wall Street investment banks such as Goldman Sachs and JPMorgan Chase, which expects that the stock market will continue to rise at a more gradual pace next year.
④ The three major investment banks on Wall Street said that pandemic concerns will not hinder the stock market’s rally and should buy impacted stocks on dips. ⑤ Bank of America strategists warned that the current cycle is the most unconventional, and its end is "very unlikely." Follow the usual path". They believe that today's investment background is similar to the "early stagflation" of the late 1960s and early 1970s.
⑥ They wrote that if the Fed is determined to keep real interest rates deeply negative in the context of a positive stock market, asset prices may continue to rise

8. Huachuang Securities: Silicon materials still maintain a tight balance between supply and demand throughout the year, focusing on four main lines;

Huachuang Securities Research Report pointed out that in the medium and long term, under the goal of the dual-carbon policy, the new energy industry is in an overall upward cycle. It is expected that the demand for photovoltaic installations will maintain a rapid growth of about 20% in 2022. The profit of wafers is tilted towards the battery module segment, but the silicon material will still maintain a tight balance between supply and demand throughout the year. It is recommended to pay attention to 4 main lines: 1) The profit restoration logic of integrated module companies benefiting from the decline in silicon material prices; 2) May benefit from batteries Relevant links in the technological change of wafers or silicon materials; 3) Inverter link that continues export and superimposes energy storage logic; 4) Stable and better auxiliary materials link

9. Bank of America: U.S. medium-term Treasury bonds may be the strongest repricing of the Fed’s hawkish shift;

① Mark Cabana, director of US interest rate strategy at Bank of America, said that now that the leadership of the Fed has been finalized, the Fed may shift to a more hawkish stance. Bank of America recommends a tactical short duration, the middle of the yield curve will be the strongest repricing, but pointed out that the two-year part may change more. The break-even inflation rate and real interest rates will be repriced accordingly. They are still very, very low, but we do think that this may be the beginning of the Fed’s transformation that we will see, which should allow real interest rates to rise moderately and will be risky assets. Unfavorable factors
② Cabana pointed out that today's statement should allow the Fed to make changes, recognize the upside risks of inflation, and they can start talking about how they will respond. In many respects, the White House’s leadership choices for the Federal Reserve limited this transition to a certain extent, but it no longer exists and should allow a faster transition. The minutes of the FOMC meeting to be announced on Wednesday may include "increasing calls for accelerated code reduction."

10. Holland International: Position data does not reflect the strength of the US dollar;

① Francesco Pesole, a foreign exchange strategist at ING, explained that the foreign exchange position data of the US Commodity Futures Trading Commission (CFTC) still did not show the rise of the US dollar in November. These data continue to show that most G10 currencies have net positions against the US dollar. On the rise
②Netherlands International pointed out that November was a month when the U.S. dollar strengthened across the board, but this did not translate into an increase in U.S. dollar net positions as reported by the Commodity Futures Trading Commission.

11. Bank of Singapore: The U.S. dollar should remain flexible against low-yield currencies in 2022;

The Bank of Singapore stated that in the case of differences in economic growth and monetary policy, the U.S. dollar should be able to maintain flexibility in 2022 against low-yielding currencies such as the Japanese yen, the euro and the Swiss franc. The US economic growth is stronger than that of the Eurozone or Japan, and inflation is also higher. This is expected to increase the pressure on the Federal Reserve to force it to adopt a gradual but divergent approach to raise interest rates. Powell was nominated as the chairman of the Federal Reserve, and Brainard was nominated as the vice chairman of the Federal Reserve. This marked the continuity of the Fed’s policy, and Powell was more hawkish than Brainard