Likes ReceivedMorning strategy for 2024.9.19: The Fed cuts interest rates by 50 basis points!! Focus on lithography machines/overseas expansion/Huawei
The shoe has finally dropped. Early this morning, the Federal Reserve announced a 50 basis point rate cut, lowering the federal funds rate target range from 5.25%-5.5% to 4.75%-5%.
Rate cuts are positive for emerging markets - the bigger the cut, the greater the positive impact.
The logic here is that after over four years of consecutive Fed rate hikes stimulating capital flows from global markets to the US, allowing America to reap benefits, rate cuts change the game as capital may flow back to emerging markets.
Therefore, today's expectation is a rise! A rebound! Today we'll see if the A-share market has the guts to perform!
But long-term, the iron must be struck while it's hot. Whether the index can sustain a rebound depends on trading volume - rebounds without volume are meaningless.
With limited trading days before National Day and yesterday's extreme low volume of just 480 billion yuan across both markets, significant volume expansion before the holiday is unlikely, so don't expect too much from the rebound's height.
Strategically, if the index opens much higher, it's actually an opportunity for short-term profit-taking. If it opens lower or flat, consider adding positions for day trading.
Now let's look at sectors and stocks:
1. Lithography machines
On the news front, MIIT promoted domestic DUV lithography machines with overlay accuracy ≤8nm, but market reaction was muted. Actually this news came out on September 9th - the weekend hype was clearly meant for exits.
However, this profit-taking appears relatively healthy. As long as it doesn't crash (A-shape pattern) and maintains the trend, there's still potential for fluctuations.
2. Overseas expansion
This sector rose earlier this year producing many star stocks. With adjustments complete, technical indicators show buying opportunities re-emerging.
3. Big tech/Huawei (HarmonyOS + venture capital)
CNIPA patents show Xiaomi obtained an exterior design patent for "phone and its body" showcasing a tri-fold phone design.
For consumer electronics, software upgrades will embrace AI while hardware embraces foldable screens - both directions deserve attention.
Additionally, the 2024 China Computing Power Conference will be held September 27-29, officially showcasing China's latest computing power achievements.
Therefore, if thematic and state-owned reform sectors continue diverging today, capital may return to tech, especially HarmonyOS/IT innovation.
Upcoming Huawei-related catalysts include:
September 19: Huawei Connect where HarmonyOS and Ascend will likely be discussed
September 24: At the 2024 CIFTIS forum, Huawei's HarmonyOS Solutions GM Chen Xinxin revealed the fully self-developed, natively secure and intelligent "pure-blood" HarmonyOS NEXT will launch its official version by end-September
Final timeline: The Mate70 launching October/November will be the first with pure HarmonyOS
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