Hong Kong Stock Concept Tracking | The Federal Reserve cuts interest rates by 50 basis points, exceeding expectations, with slight improvement in domestic real estate data (including concept stocks)

The Federal Reserve's FOMC meeting in September approved a 50bp rate cut with an 11:1 vote, bringing the benchmark interest rate to 4.75%-5%. The decision statement, dot plot, and Powell's speech indicate that the Fed hopes to adjust its monetary policy stance more quickly to prevent further weakening of the job market amid decreasing inflation risks, consistent with Powell's speech at the Jackson Hole meeting.

A research report from CITIC Securities pointed out that the Fed is expected to cut rates by 50 basis points at its September 2024 meeting, exceeding market expectations.

The statement from the meeting showed significant changes compared to the previous one, demonstrating the Fed's confidence in cooling inflation and support for the job market. The dot plot for this meeting shows a central target rate of 4.4% for this year, lower than the 5.1% from the June 2024 meeting, while also lowering the rate target level for next year.

Powell stated that rate cuts are not on a preset path and decisions will continue to be made at each meeting, emphasizing policy flexibility. He remains optimistic about the economic situation and job market, still painting a picture of a "soft landing."

CITIC Securities believes that the Fed's 50bps rate cut this time is a preemptive move to maintain the current economic growth and job market status while keeping policy flexibility for the future. It is expected that there will be two more 25bps rate cuts later this year.

After the overnight trading rate cut expectations were met, the market is expected to potentially return to a "soft landing" trading in the short term. The downside room for US bond yields is limited, and US stocks may continue to exhibit high volatility. Sectors such as biotechnology and real estate tend to perform well in "soft landing" rate cut trading.

According to the financial news app Zhitong Finance, Guotai Junan Securities released a research report stating that based on data from the National Bureau of Statistics, August real estate investment and construction area data have improved, with a slight narrowing of the decline. All data performances have not shown significant fluctuations. Considering that August has entered the final stage of the impact of policies introduced in May, there is still an expectation for new policies to provide support.

Xie Haoyu from Guojun Securities stated that the focus will still be on the clearance of existing projects, making "dead inventory" no longer "dead" because it is also a liability, entering a time of stabilizing incremental growth and clearing existing inventory. In the past, the market paid less attention to dead inventory because it mostly viewed the real estate industry from an incremental market perspective.

Real Estate Related Industry Chain Companies:

China Overseas Development (00688), Agile Group (01908), Yuexiu Property (00123), Greenland Hong Kong (03900), Sunac China (01918), Longfor Group (00960), Oceanwide Holdings (03377), Vanke (02202), China Resources Land (01109), and Country Garden Holdings (00884), among others;

Property Management Companies: China Resources Mixc Lifestyle Services (01209), Poly Property Services (06049), China Overseas Property (02669), Midea Real Estate (03990), among others.

Real Estate Agencies: Beike-W (02423), Country Garden Services (06098)