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good news comes again!

in the morning trading today, a-shares showed obvious abnormal movement. the chinext index rose by more than 2% at one point, and the shanghai composite index rose by more than 1% at one point. the number of stocks that rose once exceeded 5,000, and the most important thing was that the transaction amount increased significantly. at the same time, hong kong stocks ushered in a big explosion, and a50 also pulled up from below the water level.

in addition, the rmb suddenly reversed and soared by more than 150 points.

after the fed cut interest rates, the market also received good news. on september 20, the september lpr quotation will be released. the current market expectation is that it may drop by about 20bp; in addition, the expectation of a reduction in the interest rate of existing mortgage loans is also constantly strengthening. there are also some rumors about economic stimulus and consumption stimulus. although there is no official confirmation at present, the market is obviously speculating on this as a good thing. according to the reporter of securities china, there is indeed a possibility of changes in the interest rate tomorrow.

a-share movement

in the morning trading today, a-shares fell sharply, but soon there was buying to go long. the shanghai composite index rose by more than 1% at one point, and the number of stocks that rose once exceeded 5,000. at the same time, there was also a very obvious change in the market, that is, the volume increased. as of the morning closing, the total market transaction amount exceeded 420 billion yuan, which was only nearly 50 billion yuan less than the whole day yesterday.

as of the morning close, the shanghai composite index rose 0.59% and the wind all a rose 1.29%. the overall consumption rebounded, with liquor, food, retail, and cultural tourism sectors booming together. the real estate industry chain remained active, the concept of state-owned enterprise reform resurfaced, and baobian electric once again staged a quasi-"ground-to-sky" board. only dividend-yielding assets saw a sell-off.

while a-shares were on the rebound, hong kong stocks performed better and more stably. the hang seng technology index rose by 3% at one point, while the hang seng index and the state-owned enterprise index rose by nearly 2%. haier smart home rose by more than 7%, leading the constituent stocks, while kuaishou rose by more than 5% and jd.com rose by more than 5%. the weighted stock price index of the taiwan stock exchange also rose by more than 1% from its once weak performance. the volatility of the a50 also increased significantly, and it rose straight from below the water level in the early trading.

the reason why a-shares have unusual movements may still be related to the favorable rumors. in the early trading today, there were suddenly multiple versions of short essays in the market, and the most consistent one was that lpr might move. september 20 is the time window for lpr adjustment. according to the reporter of securities china, there is indeed a possibility of adjustment in the interest rate.

galaxy securities said that since 1989, the united states has experienced six rounds of interest rate cuts. there is a certain degree of misalignment between the interest rate cut cycles of china and the united states. however, when the federal reserve cuts interest rates, china is often already in a rate cut cycle or is about to start a rate cut cycle. most of china's interest rate cut cycles correspond to periods of slowing domestic economic growth and falling inflation levels. china is still in a rate cut cycle. if the united states starts a new round of rate cuts from september to december 2024, china's room for rate cuts will be further opened.

regarding market expectations under the new situation, some securities analysts believe that if the domestic interest rate is cut by 25bp in september, a-shares are expected to usher in a "safe period" of at least one month of rebound; if the domestic interest rate is cut by 50bp in september, a-shares are expected to usher in a "safe period" of at least one quarter of rebound, and fully switch to "offense"; if there is no interest rate cut in september or it is lower than 25bp, a defensive strategy will be adopted.

improved liquidity

externally, the s&p 500 hit a record high overnight and closed slightly lower. but s&p futures rose 0.6% in the asian trading day, and nasdaq futures rose 0.9%. japan's nikkei rose 2%, and australian stocks hit a record high. u.s. interest rate futures also bet that the federal reserve will cut interest rates at its meeting on november 6-7, with a 64% probability of a 25bp cut and a 36% probability of a 50bp cut.

after the fed started its easing cycle by slashing interest rates, the us dollar rebounded, long-term bond yields rose, and asian stocks mostly rose. obviously, the fed has adopted a balanced policy outlook in order to keep the economy running smoothly. judging from the trend of the yen, the us dollar rate cut also left the market with enough breathing space. it can be said that the external liquidity environment of a-shares and hong kong stocks is changing in a positive direction.

from a fundamental perspective, we are currently in a period of gradual loss of momentum, but the fundamentals are still stable. the us economic development is significantly unbalanced, but it does not yet have the characteristics of a recession; europe's economic growth faces downside risks, and its internal performance is clearly differentiated; japan's overall economic performance is weak but has not changed the recovery trend. this basically means that the systemic risk of the equity market is still not too large, but the rate of return may converge.

haitong international believes that looking back at history, my country's economy is usually weak before the fed cuts interest rates, and my country's central bank often follows suit after the rate cuts are implemented. the domestic economy was also weak before the fed cut interest rates this time, but the difference is that this time my country's central bank started cutting interest rates before the fed. from the perspective of liquidity, the fed's rate cut may improve the macro and micro liquidity of a-shares in the short and medium term, helping a-shares to rise. from a fundamental perspective, the boost to the fundamentals of a-shares from the rate cut remains to be seen.

tianfeng securities believes that in the short term, the equity race is approaching, and attention should be paid to gold, while the risks of interest-rate bonds are rising; in the long term, high-dividend assets with monopoly and scarcity are expected to be revalued, and long-term style switching requires patience and waiting for more right-side signals. we still need to "remain patient" and wait for subsequent policies to take full effect, overseas policy shifts to be fully implemented, and the uncertainty of the us election to dissipate before a new cycle begins.