Fangzheng Securities: In the scenario of preemptive interest rate cuts by the US Federal Reserve, stocks are better than bonds.

On September 16, the research report released by Founder Securities stated that in the scenario of a preemptive rate cut by the Federal Reserve, stocks are better than bonds, and Hong Kong stocks have a higher potential for a rise. Firstly, because the market generally expects the Federal Reserve to start a new round of rate cuts, and this round of rate cuts is likely to be preemptive: as of the end of August, the risk of recession is still relatively controllable. Secondly, because historically, when preemptive rate cuts are implemented, stocks perform better than bonds, and Hong Kong stocks have higher elasticity: based on historical experience, after preemptive rate cuts are implemented, stocks, including U.S. stocks, generally benefit, and the resilience of Hong Kong stocks is particularly worth noting. Bond gains are likely to narrow marginally, a weak U.S. dollar environment usually sees a reversal, and returns on commodities tend to lag behind.