In recent days, China's super stimulus policies have swept the globe. Goldman Sachs has coined a fresh term: tactical investment, but the signals seem somewhat unclear. Wu Xiaobo raised a question: how long can the stock market remain hot? This is also a question many people want to ask.

Some say it might be another two-day tour. Is it a two-day tour or a long-term bull market? There are three very important questions here.

Let's first look at the recent market trends, which have become increasingly frantic.

On September 27th, the bullish sentiment of funds erupted completely. That day, the Shanghai Stock Exchange experienced a historic crash, with investors reporting multiple accidents throughout the day. Experts analyzed that this is a typical phenomenon of trading congestion.

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The ChiNext Index rose by 10% that day, setting a historical single-day record increase, with a transaction volume close to 440 billion yuan, also setting a historical record; the Shenzhen Component Index transaction volume approached 1 trillion yuan.

This week, the ChiNext Index has accumulated an increase of 22.71%, leading the global stock market; the Shanghai Composite Index has accumulated an increase of 12.81%, and the Shenzhen Component Index has accumulated an increase of 17.83%. These are all very exaggerated market trends.

The market has soared, and many people are still talking about a two-day tour, which reflects the long-term emotions and confidence of the Chinese stock market, and the repair requires a certain amount of time and the support of sustained market trends.

Wu Xiaobo analyzed two similar market trends in history, which lasted 12 months in 2014 and only 4 months in 2019.

So, is it a two-day tour or a long-term bull market? There are three very important questions here.

The first question is, how much foreign capital can the new financial policies that drive the Chinese capital market to soar actually mobilize?In recent days, various signs have indicated that U.S. dollar capital is rushing into the market, and Chinese capital is being snapped up frantically.

Although we have not yet seen exact data, there are two important pieces of information that can substantiate this.

The first piece of information is that the appreciation of the Chinese yuan started at the end of July and has already broken through the 7.0 mark. This morning, it even reached a high of 6.9687.

There are many factors contributing to the appreciation of the yuan, and one important reason is that U.S. dollar capital is buying up yuan-denominated assets, creating a supply shortage in the offshore market.

The timing here is very clever. In July, expectations for a U.S. interest rate cut rose sharply. On August 21, the U.S. revised down the number of non-farm employment figures for the past year by 818,000 people. On September 19, Powell said at the interest rate decision press conference that the interest rate cut should have happened in July.

These pieces of information were already known to the big U.S. capital players, who started to enter the market in July. Therefore, the yuan started to rise at the end of July and, after the U.S. interest rate cut on September 19, it broke through the 7 mark in one fell swoop.

The second piece of information is that Wall Street in the U.S. is cheering and frantically buying up Chinese assets.

Goldman Sachs is known for being conservative and has put up the sign of tactical investment. This does not mean that it is to be done as a short-term rebound, but rather compared to strategic investment, the global capital environment still needs to be observed, especially the uncertainty of the U.S. dollar interest rate cut rhythm.

Even so, Goldman Sachs expert Scott Rubner still believes in an interview with Bloomberg that this bull market for Chinese assets will be very long-lasting because it is not only a monetary easing policy but also a comprehensive stimulus to the economy. He loudly calls for all-in on China!

U.S. hedge fund big shot David Tepper said that the current idea is to look towards China and buy everything. He believes that U.S. stocks are no longer the best investment choice, and China is.In an interview, Tepper stated that he has sold a significant amount of his holdings in Nvidia stocks and has instead invested in Chinese stocks. It is evident that global capital is reveling in an epic feast of Chinese assets. Since the introduction of new financial policies on September 24th, the transaction volume of Northbound capital in A-shares has increased significantly, and the intensity of foreign capital buying Chinese assets and participating in Chinese transactions is strengthening.

Combining the information from both aspects, we can conclude that dollar capital is rushing into the market, and Chinese assets are being snapped up frantically.

The second question is, can the continuous adjustment and reform, driven by the capital market, promote the sustained improvement of China's economy? Wu Xiaobo said that when the economy is under pressure, the stock market experiences a counterintuitive surge, which is referred to as a "water bull" in the industry. The essence of a water bull is an upward trend driven by policy incentives.

Everyone knows that the economy is the fundamental base of the stock market and the fundamental guarantee for its sustained bull market.

Of course, currently, China's economy needs external forces to enter a positive cycle. A booming capital market and a stable real estate market may be the forces urgently needed at present.

The third question is, the current market trend is directly related to the dollar entering a rate-cutting cycle. Then, the pace of dollar rate cuts will have a significant impact on global capital flows and investment mentality.

Before this, some experts believed that the dollar rate cut for this year is determined, which is 100 basis points, meaning that the two interest rate meetings in November and December are expected to each reduce by 25 basis points.

However, the current surge in Chinese assets, could it disrupt the pace of dollar rate cuts? This is very possible because it is a situation that the U.S. officials do not want to see at all.In summary, the subsequent market trends and economic developments remain highly complex, with the situation being far from clear.

However, it can be affirmed that China has currently taken the initiative, and the determination and strength with which we implement policies are the most crucial determinants.