Rate cut tomorrow or not! The Chinese Yuan surges, and 4,800 A-shares rise

Although the Federal Reserve made its first interest rate cut in the early hours today, and it was a substantial 50 basis points, this is not the main reason for the rise in A-shares.

In fact, A-shares plunged after the market opened, and then the national team started buying again.

Yesterday, it was mainly focused on the CSI 300 and SSE 50, but today it expanded to the ChiNext, STAR 50, CSI 1000, and CSI 500, covering all small and medium-sized innovative companies.

Additionally, according to a report by Securities China, there is news today that the LPR will cut rates by 20 basis points tomorrow, and the existing mortgage interest rates will also be adjusted soon.

As a result, the real estate chain and consumer sectors have performed strongly.

In fact, this news was already circulating yesterday.

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Before the Fed cut rates, the central bank was cautious about cutting rates to protect the exchange rate.

However, after the Fed's rate cut, the central bank has more room to operate.

In fact, the central bank has already signaled that it will cut reserves and interest rates, and tomorrow happens to be the LPR quotation day.

After the market closed, the National Development and Reform Commission also released some significant positive news.

Affected by the Fed's rate cut, the US dollar index weakened, and non-US currencies strengthened collectively.

Today, the offshore RMB surged, rising from 7.11 to 7.06.

Therefore, the central bank no longer needs to consider protecting the exchange rate and can boldly cut interest rates.

From this perspective, the RMB may not continue to strengthen unless the domestic economy significantly warms up.

Looking at today's significant news: it does not mean that the Fed will continue to cut rates significantly in the future; adjustments will still be based on employment and inflation data.

Historically, it often takes three months to observe changes in employment data after a rate cut to reach a consensus on whether the US economy is in recession or has had a soft landing.

Therefore, economic data over the next three months will have a significant impact on the US stock market.

If it's a soft landing, the US stock market still has upward momentum.

If the risk of recession increases, it will fall first and then rise when the recovery occurs.

Personally, I believe AI is the core of the US stock market.

As long as the AI narrative can continue, capital expenditure will also continue (the White House has already established an artificial intelligence data center infrastructure working group), making it difficult for the US economy to enter a recession, and the US stock market is also unlikely to fall.

The Hong Kong dollar is directly pegged to the US dollar, and as an offshore market, the Hong Kong stock market directly benefits from the Fed's rate cut.

During the holiday, the Hong Kong stock market rose for two consecutive days, and today, without the national team's purchase, it still significantly outperformed A-shares.

It can be seen that while A-shares hit a new low, the Hong Kong stock market has strengthened.

As for A-shares, the Fed's rate cut is more about improving external liquidity.

To reverse the trend, it is necessary to change the market's pessimistic view of the economy.

In the short term, tomorrow's LPR quotation is a key point.

Although a rate cut does not solve the problem, at least there will be a rebound, and then we will wait for the important meeting in October.

Recently, the management has strongly promoted restructuring, and yesterday's State Council meeting also carried out equity reforms.

Experienced investors should be able to smell a certain flavor; these are usually catalysts for a bull market.

In September, car sales were very good, and passenger cars have been growing positively this year.

The retail sales of new energy vehicles in the first half of September increased by 63% year-on-year, a strong growth rate that hasn't been seen for a long time, indicating that the replacement of old cars with new ones has played a role.

Finally, looking at today's market, as of the close, the Shanghai Composite Index rose by 0.69%, the ChiNext Index rose by 0.85%, the Hong Kong Hang Seng Index rose by 2.02%, and the Hang Seng Technology Index rose by 3.25%.

The turnover of the two markets significantly increased to 0.62 trillion yuan, with nearly 4,800 stocks rising.

Risk warning: The stock market is risky, and investment should be cautious.

This article does not constitute investment advice, and readers need to think independently.