For over four years, the Federal Reserve has cut interest rates for the first time.

Several top-tier private equity institutions have indicated that the overall scale of the Fed's rate cut has exceeded the "average market expectation."

Following the Fed's entry into a rate-cutting cycle, the global liquidity outlook is expected to become more lenient on the margin, significantly easing the external liquidity pressure faced by Chinese assets.

The A-share market is expected to warm up marginally and gradually reach an important inflection point.

It is worth noting that although the overnight overseas market's reaction to the Fed's rate cut was lukewarm, both the A-share market and industrial commodity futures saw a significant rise on the 19th.

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The Fed is expected to cut rates twice more within the year, with a total reduction of 50 basis points.

In response to the Fed's first rate cut in four years, senior researcher Zhang Shiying from Shicheng Investment believes that the Fed's initial rate cut of 50 basis points exceeded the expectations of some investors.

However, Fed Chairman Powell's outlook on the subsequent rate-cutting path is hawkish, stating that "rate cuts will be accelerated, slowed down, or paused as needed" and "no one should think that a 50 basis point rate cut is a new speed."

He hinted that the future neutral interest rate will be significantly higher than the level four years ago.

Currently, according to the mainstream market expectation, the Fed is expected to conduct two more rate cuts within the year, each by 50 basis points.

Chen Meifeng, a fund manager at Mingyu Asset, said in an interview with China Securities Journal that the scale of the Fed's rate cut this time has exceeded the "average market expectation."

This mainly reflects the Fed's intention to focus more on risk management and avoid cooling down the job market.

For the U.S. stock market, the main stock indices have recently set new historical highs, and the relevant performance has to some extent factored in the rate cut expectations.

It is worth noting that the scale of this rate cut may trigger some investors' concerns that the U.S. economy is about to enter a recession.

Looking at the impact on inflation and other aspects, the private equity industry generally believes that the dollar may enter a downward channel, which may to some extent boost commodity prices, but will not drive a sustained bull market in global commodities.

Ma Kewei, the Managing Director of Mingze Investment, stated that the start of the Fed's rate cut cycle will theoretically reduce financing costs, stimulate investment and consumption, and provide a boost to the stock market.

At the same time, rate cuts will increase market liquidity, which may push up commodity prices.

Chen Meifeng further analyzed that for the commodity market, the Fed's rate cut of 50 basis points may bring some demand stimulation, but the foundation for the overall bull market in commodity markets is not solid, and the market hopes to see more stabilizing signals from the global economy in the future.

The dawn of A-shares may be "just around the corner."

After the Fed's September rate cut is settled, the private equity circle is currently forming a new consensus that Chinese stock assets are expected to warm up marginally and gradually reach an important inflection point.

Chen Meifeng stated that looking at the historical performance of emerging markets after each rate cut by the Fed since the 1990s, whether it was a "recessionary rate cut" or a "preventive rate cut," the MSCI Emerging Markets Index had varying degrees of fluctuating increases in the first half of the Fed's rate cut cycle.

Among them, the performance of emerging markets was stronger during the Fed's "recessionary rate cut" cycle.

At present, whether the A-share market can strengthen may depend on the further efforts of fiscal policy, the reversal of corporate performance expectations, and the repair of investor confidence.

In addition, the overall valuation level of A-shares has dropped to a low level, and many individual stocks have investment value.

With the subsequent implementation of incremental policies, it is believed that "the dawn of the market is just around the corner."

Chongyang Investment believes that with the Fed's rate cut in place, the renminbi exchange rate has also rebounded to a recent high, significantly easing the external liquidity pressure faced by Chinese stock assets.

The further strengthening of Chinese stock assets in the next stage may still require the continuous efforts of domestic macro policies.

Recently, the intensity of domestic macro counter-cyclical adjustments has been continuously increasing, and the A-share market is expected to gradually usher in a turning point.

Fang Lei, Deputy General Manager and Chief Strategy Investment Officer of Xing Shi Investment, said that after the Fed opened the rate cut channel, global liquidity and expectations will become more lenient on the margin, and rate cut transactions may become an important influencing factor in various capital markets, with asset valuations in some markets possibly increasing.

For the Chinese market, the country is currently in an important window for further efforts in counter-cyclical policies, and the Fed's rate cut is expected to open up space for domestic easing policies.

Ma Kewei further stated that if there can be more significant economic policies continuously introduced in the future to boost domestic economic expectations, the A-share market is expected to rise.

Overall, it is highly likely that the A-share market will see inflection points and turning points in the future.

In the context of the A-share market's gradual repair, many private equity firms interviewed suggest that investors seize the market's structural opportunities, with technology growth, high dividends, resource stocks, innovative drugs, and overseas themes being widely favored by current private equity firms.

Luyong Assets stated that it will currently focus on four aspects of structural opportunities: first, deep value directions with good business models and strong certainty, such as energy and electricity, internet Chinese concept stocks, etc.

; second, the high-tech industry track, including domestic industry leaders in artificial intelligence (AI) and digitalization, semiconductor industry chains, etc.

; third, resource directions that will benefit from the global macroeconomic upturn in the future; fourth, medical equipment and medical device companies with high overseas business ratios, as well as some consumer goods companies with good business models.

The current market may have factored in a more cautious expectation in pricing.

From the semi-annual report data of listed companies in 2024, the structural repair has been basically confirmed, and the performance of the consumer and technology sectors is relatively superior, which means that some sectors may be over-adjusted, especially the quality companies within the sectors.

In the short to medium term, the Fed's rate cut has been implemented, and domestic policies continue to exert efforts, which will help repair the valuations of high-quality growth stocks that have seen significant price adjustments and significant deviations from their fundamentals.

Currently, four investment opportunities can be focused on: first, while focusing on domestic demand, seize the investment opportunities of companies related to the overseas theme; second, focus on the medical and health sector represented by innovative drugs; third, adhere to the upstream resource-related industries; fourth, continue to explore new quality production force sub-segments.