Fed Cuts Rates: Is A-Share Bottom In, Liftoff Near?

The U.S. stock market has cut interest rates by 50 basis points, leading to a collective rise in A-shares.

The imagination of capital inflow has significantly increased.

However, capital is profit-driven, and the recent rate cut in the U.S. does not mean an immediate decline.

Therefore, whether capital can flow back to A-shares will depend on the performance of policies in the coming days to see if they are attractive.

The following policies would be most welcome if two or more are implemented: 1.

A reduction in the LPR, preferably by 20 basis points.

2.

Announcement of a reserve requirement ratio cut, preferably non-targeted.

3.

Announcement of the establishment of a stabilization fund, preferably over a trillion.

4.

A reduction in the interest rates of existing mortgages, preferably by 60 basis points.

If more than two of these policies are implemented, A-shares may experience a rebound similar to that before and after the Spring Festival.

However, if none of these policies are implemented, the market will continue on its old path, and it will be difficult for the market to rise.

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Sector Strategy: Baijiu stocks have suddenly surged today, driven by expectations of interest rate cuts.

However, there was a retreat at the end of the day.

Previously, one could guess whether it was the main force or retail investors reducing positions based on the flow of northbound capital.

But now, without data, it is impossible to judge.

Therefore, it is necessary to remain cautious, as Baijiu stocks tend to fall when they rise to the 20-day moving average.

If there are no major positive news in the next few days, Baijiu stocks may continue to adjust downward.

Today, semiconductors rose along with the market without a significant surge.

However, this is not a concern, as the main force's attention to this sector is high.

Once market sentiment warms up, there is a high probability of a surge.

I will continue to hold and wait.

Last night, the Federal Reserve announced a 50 basis point rate cut, officially starting the rate-cutting cycle.

Based on the trend of each rate-cutting cycle, the Nasdaq is prone to a downward trend.

Of course, it won't fall immediately but will continue to rise for a while due to inertia.

When the pace of rate cuts accelerates, it will officially adjust downward.

Therefore, I believe the Nasdaq may still rise in the future, but it is likely to be just a fishtail market.

The operation will be difficult, and it is best to participate with the idea of low absorption for a rebound.

The risk is expected to appear in November or December.

Hang Seng Technology surged in volume today, rising by 3.25%, indicating that my judgment is relatively correct.

As long as the U.S. and A-shares do not cause trouble, Hang Seng Technology is likely to rise.

My current thinking remains unchanged.

As long as the 20-day moving average is not effectively broken, the opportunity is greater than the risk, and I will continue to hold and look bullish.

Medical stocks rose along with the market today but did not break away from the downward trend.

I will continue to observe.

The military industry has bottomed out and rebounded, unable to fall further, and there has been no significant upward surge.

The difficulty of short-term operations is relatively high.

If you want to participate, you need to continue to use a long-term strategy to slowly layout.

Please note that the translation is done to the best of my ability, and some financial terms may have specific jargon that might be used differently in different contexts.