Institution: U.S. stocks enter the accumulation zone, with three steps to increase positions

Key Point: Accelerated Growth in US Retail Sales Data in March

On April 15th, the latest US retail sales data was released. The year-on-year retail sales increased by +4% (previously +2.1%), and month-on-month by +0.7% (consensus +0.4%, previously +0.9%); while the control group retail sales increased by +1.1% month-on-month (previously +0.3%, consensus +0.4%).

In detail, the sub-items with strong growth include non-store retail (+2.7% month-on-month), miscellaneous (+2.1% month-on-month), gasoline stations (+2.1% month-on-month), and general merchandise stores (+1.1% month-on-month); while the weaker performing sub-items include sporting goods (-1.8% month-on-month), clothing (-1.6% month-on-month), furniture and home appliances (-0.7%), and motor vehicles and parts (-0.7%).

Stock Price Performance: Overall Retracement, Defensive and Value Sectors Leading

This week, against the backdrop of a pessimistic monetary policy outlook and rising risk aversion, the S&P 500 fell for 5 consecutive trading days, with a total decline of 3%, confirming a retracement phase. In terms of style, large-cap value (Russell 1000 Value -0.7%) > small-cap value (Russell 2000 Value -1.6%) > small-cap growth (Russell 2000 Growth -4%) > large-cap growth (Russell 1000 Growth -4.9%).

In terms of sectors, 7 industries rose this week, while 17 industries declined. The rising industries mainly include food, beverage, and tobacco (+3.1%), household and personal products (+2.5%), banks (+2.3%), insurance (+2%), and utilities (+1.8%); while the industries with significant declines include automobiles and auto parts (-11.7%), semiconductors and semiconductor manufacturing equipment (-11.1%), technology hardware and equipment (-5.9%), software and services (-4.5%), and retail (-4.2%).

Volume and Price Performance: Funds Flowing Out of Technology Industries into Traditional Industries

This week, the daily average fund intensity of the S&P 500 (daily average change x daily average volume) was -$2.61 billion per day, compared to -$0.71 billion per day last week, indicating a significant acceleration of fund outflows in the US stock market. The 4-week average is +$0.22 billion per day, and the 13-week average is +$0.48 billion per day.

Industries that saw funds inflow mainly include healthcare equipment and services (+$64.40 million per day), transportation (+$38.60 million per day), banks (+$37.30 million per day), food, beverage, and tobacco (+$31.00 million per day), and insurance (+$26.10 million per day); while industries with significant outflows include semiconductors and semiconductor manufacturing equipment (-$1.42 billion per day), technology hardware and equipment (-$0.41 billion per day), automobiles and auto parts (-$0.36 billion per day), software and services (-$0.29 billion per day), and retail (-$88.70 million per day).

Investment Recommendation: S&P 500 Enters Accumulation Zone, Following a Three-step Approach

With the S&P 500 falling for three consecutive weeks, it has confirmed a retracement pattern. Last week, we suggested that the S&P 500 should be slowly accumulated once it falls below 5050. This week, the S&P 500 closed at 4967 points, already entering the recommended accumulation range Next, we believe there are three additional positions to increase holdings, they are:

1. 120-day moving average (approximately 4900 points, highly probable to reach);

2. 200-day moving average (approximately 4700 points, moderately probable to reach);

3. Intrinsic earnings support line (approximately 4500 points, the fundamental bottom line). If the S&P 500 confirms a rebound in advance, consider adding positions on the right.

Risk Warning: Uncertainty in economic fundamentals, uncertainty in international political situation, uncertainty in US fiscal policy, uncertainty in US Federal Reserve monetary policy