Although it is a pity that the Spring Festival holiday is drawing to a close, the first trading day after the holiday is also coming. For investors, this may be worth looking forward to, and many are looking forward to a new "good start" for the stock market after the Spring Festival.

Since the beginning of 2022, the performance of the stock market in the first month has been dismal, with the main index basically falling unilaterally, during which the brief rebound was very weak. Since the beginning of the year, the CSI has fallen by more than 9%. The Shanghai Composite Index fell more than 7%. Affected by the large-cap heavyweights, the Shanghai 50 stock market rebounded briefly, but it also fell by more than 6%. The Shenzhen index fell by nearly 10%. Gem knuckles before Ningde era performance forecast led by although there is a slight rebound, but also fell by more than 12%. The CSI 300 index, which represents large-cap stocks, fell more than 7%. The CSI 500, a mid-cap stock, fell even worse, falling nearly 10%. The Kechuang 50 index and the mass entrepreneurship and innovation 50 index fell similar to the gem, falling more than 12%, of which the mass entrepreneurship and innovation 50 index fell the most, down more than 13% year-to-date.

Although the performance of the stock market before the Spring Festival is really dismal, but for the post-holiday market, the majority of investors can have a certain optimism.

Judging from the pre-and post-holiday trend of the A-share market over the past decade, if there are no major unexpected negative events during the Spring Festival, there is a higher probability of rising in the first week after the festival. Of course, there are many special cases, for example, in 2020, because of the outbreak of the COVID-19 epidemic, although the opening time of the post-holiday market has been repeatedly delayed, the stock market is still greatly affected by the epidemic, and the main indexes all showed a "golden pit" in March 2020. When this produces a large negative factor during the holiday, it will generally get relatively sufficient or even excessive feedback in the first few trading days after the holiday, so the market will be repaired more quickly in the later period.

According to statistics, during the Spring Festival from 2000 to 2020, in the week after the festival (calculated on the basis of five trading days), the Shanghai Composite Index rose more than 2 times, and the probability of rising was more than 65%. The average increase is also more than 1%.

The reasons are as follows:

The first is the significant difference in institutional capital inflows.For the expectation and demand of consumption during the Spring Festival, before the festival is generally a period when investors need a lot of capital, unless a few are in a relatively bull market, otherwise most of them are also a cold period for the issuance of public funds. The decrease in the number of new funds to a certain extent leads to the shortage of new funds to enter the market. After the end of the holiday, many institutions will also increase the marketing and publicity of their products to attract new funds into the room, resulting in a large difference in the amount of new funds before and after the festival.

The second is to avoid the negative factors during the holiday period.Every holiday, the domestic A-share market will have discussion and analysis on "holding shares" or "holding money". No matter what the result is, many people will choose to hold money for the holidays, which will lead to a significant reduction in pre-holiday trading volume. Therefore, before the advent of long holidays such as National Day and Spring Festival, the stock market trading volume before the holiday is very obvious. When individual industries may have greater uncertainty during the holidays, the impact on transaction risk factors to avoid consideration is more obvious.

The third is the income level.During the two to three trading days before the long holiday, it has always been a period when the reverse repurchase of treasury bonds has a higher yield. in many cases, the yield of one-or two-day reverse repurchase of treasury bonds may be more than 1.5 times that of the usual, or even as high as two or three times. At the same time, as long as we grasp the date and do an one-day or two-day reverse repurchase of treasury bonds, we can enjoy a return of eight to ten days. On the one hand, many investors are trying to avoid the influence of negative factors during the holiday period, on the other hand, using this part of the funds to do reverse repurchase can indeed get several times the return of the "risk-free rate of return." Returning from the long holiday, this part of the funds re-enter the market, is also a very important factor.

Finally, the most important annual "two sessions" in China will be ushered in soon after the Spring Festival. The two sessions held in early March every year are held immediately after the Spring Festival, and the market may form some policy expectations for the two sessions during the Spring Festival, and some investors will choose to lay out in advance sectors and stocks that meet policy expectations.

Therefore, under the combination of these factors, in most cases, after the Spring Festival can usher in a relatively good "good start" market.