The interest rate cut is coming, and combined with the correction and shock in the past six months, the main force is approaching the end of its accumulation.
The second correction on September 6 has confirmed that the market has stopped falling, so the correction in the past few days may be misleading, giving the market the illusion of a big drop.
The market seems to have forgotten the feeling of a sharp rise, and often tends to expect a correction after the rise. In this case, the possibility of a sharp rise is increased.
My opinion is:
1. A 25 basis point interest rate cut belongs to the conventional route. If the market interprets it reasonably, the market will continue to improve. Although there may be a small negative in the short term, it is beneficial to the subsequent rise.
2. A 50 basis point interest rate cut is a newer option. If it is not interpreted properly, it may lead to a market decline because it shows that the government recognizes the economic recession.
If it is interpreted properly, actively supporting the economy and avoiding recession, it may bring about an increase.