I had thought that with the U.S. stock market soaring and A-shares with high dividends stabilizing, the stock market could rebound, but I didn't expect to be hit hard by the news that "mooncakes didn't sell well during the Mid-Autumn Festival," and the pessimism about the economy began to unfold again.

Today, high-dividend stocks did rebound, but the liquor sector plummeted, with Kweichow Moutai hitting a new low, and the new energy sector, which had just shown signs of recovery, was also dragged down. All three major indices dived and turned green. Today, global stock markets are rising. Last night, the U.S. Nasdaq rose more than 2% in a deep V, the Nikkei 225 index rose more than 3% today, the Taiwan Weighted Index rose nearly 3%, the South Korean Composite Index rose more than 2%, and even the Hang Seng Index in Hong Kong rose nearly 1%. A-shares are left behind again, which is very demoralizing.

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Isn't a weak economy expected? The 30-year Treasury futures have skyrocketed. I used to have some reservations about the bond bull market, but now I am completely convinced. If the liquidity trap is not resolved, domestic demand will not rise. However, I personally think that the medium and long-term expectations are already very pessimistic. The management has recognized the problem of deflation to a certain extent, and it is difficult to continue to be pessimistic on the margin. Is it necessary to go "crazy" over short-term Mid-Autumn Festival consumption?

Let's not digress and look at today's major news:

The U.S. CPI in August rose 2.5% year-on-year, a significant decrease from the previous 2.9%, marking the fifth consecutive month of deceleration and the lowest level since February 2021. The month-on-month increase was 0.2%, in line with expectations and the previous value. The core CPI rose 3.2% year-on-year, unchanged from the previous value, having slowed down for four consecutive months, with a month-on-month increase of 0.3%, slightly higher than the expected and previous 0.2%, marking the largest increase in four months. The stickiness of core inflation exceeded market expectations, and the expectation of a 50 basis point rate cut by the Federal Reserve next week has significantly cooled.

The well-known macro journalist Nick Timiraos, known as the "Fed's mouthpiece," wrote on Wednesday that the continued weakening trend of inflation has paved the way for the Federal Reserve to gradually lower interest rates next week. However, the unexpected rise in housing inflation makes it difficult for officials to push for a more substantial rate cut.

Actually, I personally believe that the Federal Reserve may still cut rates by 50 basis points because I believe in the power of trends. The U.S. economy has clearly cooled down, and once the trend reverses, the restrictive nature of high interest rates will be stronger. The ideal scenario is that after the Federal Reserve cuts rates, it will drive a recovery in U.S. manufacturing and real estate, offsetting the trend in consumption. However, in reality, the excess savings of ordinary U.S. residents will be exhausted, and credit card default rates will soar. Even if inflation comes down, it's just the growth rate that has come down, and the absolute price level is still very high, suppressing demand. In addition, this round of global economic misalignment is very severe, and even if the Federal Reserve cuts rates, it is difficult to form a resonant recovery.A soft landing is inherently a relatively demanding scenario, which sets high expectations for decision-makers in terms of expectation management and actual operations. If interest rate cuts are not timely, it is highly likely to enter a recession. Therefore, if the Federal Reserve lowers interest rates by 50 basis points, it would help to reduce the risk of recession. If the rate is only cut by 25 basis points, then the U.S. economy would still be in an awkward phase of being neither here nor there.

After the release of the U.S. CPI figures last night, the U.S. stock market plunged, but the remarks by Jensen Huang gave the market another AI boost, with NVIDIA surging by over 8%, leading a counterattack by technology stocks. The Nasdaq index made a deep V-shape recovery, rising from a drop of over 1% to a gain of over 2%. Technology is the primary productive force, and if AI can indeed spark a new round of technological revolution, then any economic predicament can be salvaged. The modern economy is built on credit, and confidence in future growth is the source of credit.

Buoyed by the strong performance of U.S. stocks last night, the A-share market also opened higher and strengthened today, but news of weak Mid-Autumn Festival liquor sales during the trading session, with industry estimates of a 20%-30% year-on-year decline, caused the liquor sector, along with the entire consumer and domestic demand sectors, to plunge, with Kweichow Moutai hitting a new low for the phase.

In fact, it's not just about liquor. Yesterday, when I was browsing short videos, I came across videos about unsold mooncakes. The topic of "insufficient domestic demand" has already sparked widespread discussion in recent days, and this has further intensified the market's pessimism.

A few days ago, I discussed the "liquidity trap" with everyone. The sectors I am optimistic about, such as CPO, inverters, energy storage, and transformers, are all export-oriented. Coincidentally, Harris's tariff policy is not as aggressive as Trump's. Regarding domestic demand, I believe that only a complete policy shift can reverse the situation; minor adjustments are no longer sufficient to change market expectations.

The China Securities Regulatory Commission stated that under the support of multiple policies, the mergers and acquisitions and restructuring in China's capital market are entering an "active period." Since May of this year, A-share listed companies have disclosed 46 major asset restructuring projects, and 7 share issuance restructurings have been submitted to the CSRC for registration. Remember that the bull market in the GEM board in 2015 was catalyzed by mergers and acquisitions and restructuring. I think the restructuring theme is worth looking at, but the current market sentiment is too low, and liquidity does not support it.

According to reports, informed sources say that the U.S. government is considering allowing NVIDIA to export advanced chips to Saudi Arabia.

Finally, a brief look at the market: by the close, the Shanghai Composite Index fell by 0.17%, the ChiNext Index fell by 0.42%, the Hang Seng Index in Hong Kong rose by 0.77%, and the Hang Seng Technology Index rose by 0.71%. The total turnover of the two markets slightly increased to 0.51 trillion, with more than 3,100 stocks falling.Looking at the industries, coal, banking, petroleum and petrochemicals, and environmental protection industries led the gains, while agriculture, forestry, animal husbandry, and fisheries, social services, automotive, defense and military, and light manufacturing industries led the declines.