Fundamentally speaking, the core logic currently affecting the market trend is that for hawks, inflation must show a downward trend, thereby ending the strong US dollar tide cycle. Domestically, the real estate sector must at least hit bottom and move sideways, if not rebound.
The reason is that the US stock market is filled with many technology growth stocks, which require a low interest rate environment to freely burn cash, while also providing high valuation space, benefiting growth stocks. Therefore, the overall trend of the US stock market is extremely sensitive to interest rates. However, looking at the current divergence between the Dow and Nasdaq, the last time this occurred was in the year 2000, which is actually the impact of interest rate hikes.
During the interest rate hiking process, the impact is actually not significant, it only suppresses liquidity valuations. The discomfort for US-listed companies comes after interest rate hikes when the yield continues to run at high levels, which is a substantial lagging effect. Therefore, the significant decline in the Nasdaq this year is just pushing down valuations. It is expected that in the first half of next year, the decline will be due to deteriorating fundamentals.
Therefore, personally I feel that the US stock market will eventually experience a major decline to catch the bottom. Currently, the Dow is actually a market's dead-cat bounce in anticipation of the shift by the Fed. If the market does not recognize the Fed's shift, it means substantial fundamental deterioration is true, and there is a high likelihood that the market will continue to decline under pessimistic expectations even if there is an interest rate cut.
As for A-shares, due to the market's industry distribution issue, there is too much dependence on the real estate chain. If the real estate sector does not perform well, the real estate sector itself is a heavyweight stock, which will drag down the entire fundamentals from upstream finance to downstream building materials, household appliances, home furnishings, and many others that all show poor fundamental performance, many of which are heavyweight stocks.
While the market wants...