Hong Kong Stock Concept Tracking | U.S. Federal Reserve Cuts Interest Rates by 50 basis points, Exceeding Expectations, Slight Improvement in Domestic Real Estate Data (with Concept Stocks)

The Federal Reserve's September FOMC meeting approved a 50 basis point rate cut with an 11:1 vote. The benchmark interest rate was lowered to 4.75%-5%. The decision statement, dot plot, and Powell's speech all indicated that the Fed hopes to adjust its monetary policy stance more quickly to prevent further weakening in the job market given the decrease in inflation risks. This information is consistent with Powell's speech at the Jackson Hole meeting. According to a CITIC SEC report, the Federal Reserve's September 2024 meeting is expected to cut rates by 50 basis points, exceeding market expectations. The statement from the meeting showed significant changes compared to the previous one, reflecting the Fed's confidence in inflation cooling down and its support for the job market. The dot plot for this meeting showed a target central rate for this year of 4.4%, lower than the 5.1% from the June 2024 meeting, and also lowered the target rate levels for next year. Powell stated that rate cuts are not on a pre-set path and decisions are made at each meeting. He emphasized policy flexibility and remained optimistic about the economic situation and job market, still describing a "soft landing" scenario. CITIC SEC believes that the Fed's 50 basis point rate cut this time is a proactive measure to maintain the current state of the economy and job market, while maintaining flexibility for future policies. They expect two more 25 basis point rate cuts before the end of the year. With the overnight rate cut expectations being met, the market is expected to potentially return to a "soft landing" trading in the short term. The downward space for US bond rates is limited, and US stocks may continue in a high volatility state. Biotechnology and real estate sectors tend to perform well in "soft landing" rate cut trading. Guotai Junan Securities released a report stating that based on statistics bureau data, there has been improvement in August real estate investment and construction area data, with smaller decreases in data compared to previous months. With August marking the end of the effects of policies introduced in May, there is anticipation for new policies to provide support. Xie Haoyu from Guojun Securities said that focusing on the clearance of existing projects will be a key concern going forward, aiming to prevent "dead inventory" from remaining stagnant as it is also a liability. In the past, the market had low attention on dead inventory because it mostly viewed the real estate industry from an incremental perspective. Real estate-related companies include: China Overseas (00688), C&D INTL GROUP (01908), Yuexiu Property (00123), Greentown China (03900), Sunac (01918), Longfor Group (00960), Sino-Ocean GP(03377), China Vanke(02202), China Res Land(01109), Xuhui Holdings(00884) etc. Property management companies: China Res MIXC(01209), Poly PPT SER(06049), China OVS PPT(02669), Midea Real Est(03990) etc. Real estate agents: BEKE-W(02423), CG SERVICES(06098)