Core Viewpoint - The probability of a Federal Reserve interest rate cut has surged to 99% following the release of September economic data, indicating a potential influx of capital into global markets next week [1] Economic Data Summary - The Consumer Price Index (CPI) rose by 0.3% month-on-month in September, down from 0.4% the previous month, suggesting a cooling inflation environment [1] - Energy prices have seen a slight increase, but housing costs and core prices are declining, easing financial pressure on consumers [1] - The current market sentiment is heavily leaning towards a rate cut, with over $100 billion in bets placed on this outcome [1] Employment and Market Dynamics - The unemployment figure for September stands at 227,000, but the unemployment rate remains high, indicating a need for economic stimulus through rate cuts [3] - Historical context shows that a previous rate cut led to a significant rally in the A-share market, but the current market conditions differ, with the Shanghai Composite Index hovering around 4000 points [3][5] Market Sentiment and Investment Strategy - The market is currently characterized by rapid sector rotation and a lack of new capital inflow, making it challenging to replicate past bullish trends solely based on rate cut announcements [5] - Key sectors to watch include gold, commodities, and technology stocks, which are sensitive to interest rate changes, with gold prices recently reaching $2400 per ounce [7] - Investors are advised to focus on undervalued consumer and pharmaceutical stocks, as well as technology firms with strong performance metrics, while avoiding high-priced stocks [7] Valuation and Investment Outlook - There is a notable valuation gap between U.S. and A-share ETFs, with the Nasdaq ETF priced at approximately 1.8 yuan per share compared to the CSI 300 ETF at 3.6 yuan per share, suggesting a potential preference for U.S. assets [8] - While a rate cut may provide a short-term boost to market sentiment, long-term economic fundamentals will ultimately dictate market performance [8]