Heavy news is appearing every day, but I can't understand it, in the context of the reality that the overall inflation rate is still high, the Federal Reserve has released a signal to cut interest rates, could it be that the A-share market is about to usher in a huge turnaround after the storm?
It must be said that as a large A-share shareholder, the real reason why we pay special attention to the Fed's macroeconomic control is to try to find out the direct impact of relevant policies on Wall Street, so as to effectively judge the future trend of the U.S. stock market. For a long time, I have maintained the view that the emergence of the A-share intermediate market must be based on the full adjustment of the US stocks, and there are two reasons for this conclusion, and let me go through them one by one.
First of all, the spatiotemporal data of this bull market in the U.S. stock market has long exceeded the historical median level, and frankly speaking, there is already a huge valuation bubble, and it is only a matter of time before it bursts. However, due to the unique characteristics of A-shares, which follow the rise and not fall, the internal incremental funds have always been deeply afraid of the high diving of U.S. stocks, so they have no choice but to temporarily stay still and quietly wait for the mean reversion of the external market. Secondly, we all know that the continuous evolution of a super bull market is usually a two-legged walk, that is, the result of the joint promotion of internal and external funds, and the deep adjustment of U.S. stocks will inevitably lead to the withdrawal of relevant funds, and then look for investment targets with a more reasonable valuation level.
Some people may say that the above analysis logic may be wrong, and it is clear that the Fed's interest rate cut is a huge positive for the U.S. stock market, but how can it cause a market crash? I think that friends who have this kind of question should have forgotten the most basic common sense of the market, that is, the good is the negative! Obviously, one of the most important factors supporting this round of U.S. stocks is the expectation of continuous interest rate cuts in the future.
There is no market in this world that only rises and falls, and the savage growth of the market will eventually come to an end. Looking closely at the Dow Jones Industrial Index in recent times, it is not difficult for us to find that all kinds of funds have been timid, although the trend has continuously hit new highs, but the trading volume has obviously continued to shrink, forming a typical volume-price divergence situation. In short, the landing of the Fed's interest rate cut boots may trigger a revaluation of the value of the A-share market, and it is very likely that there will be a rare huge turnaround.