The capital markets have been surging recently, welcoming significant positive news. Federal Reserve Chairman Powell delivered dovish remarks at the Jackson Hole Global Central Bank Annual Conference, clearly indicating that the possibility of a rate cut in September is very high. Previously, Powell had been cautious and had not explicitly hinted at a September rate cut. However, current U.S. non-farm employment data has declined, and the U.S. Department of Labor significantly revised down employment data for May and June, which greatly angered Trump, who immediately fired the Labor Secretary. Additionally, Trump recently threatened to dismiss another Fed governor, attempting to replace them with a pro-rate cut official to pressure Powell.

Powell observed that the current U.S. CPI has fallen to 2.5%, inflation pressure is minimal, and economic data has shown significant decline. Not cutting rates at this time would seem unreasonable. Therefore, he made dovish statements, convincing the market that a 25 basis point rate cut by the Fed in September is almost certain. Moreover, there are two more rate meetings before year-end, with expectations of 25 basis point cuts each time, potentially totaling 75 basis points in cuts. The current U.S. federal funds rate is 4.25%-4.5%. A 75 basis point cut would bring it down to 3.5%-3.75%, entering the "three-handle" range.

This will significantly reduce debt servicing pressure for the U.S. government while creating a demonstration effect for global central banks. The Federal Reserve is viewed as the global central bank, and its every move influences actions by central banks worldwide. Once the Fed begins this year's rate-cutting cycle, it will encourage more central banks to cut rates. China's central bank will also have greater monetary policy space and may cut rates and reserve requirements again to boost the economy and stabilize the property and stock markets. This will bring even greater positive momentum to the stock market, which has already achieved a good start and confirmed its bull market trend.

This Monday, the stock market continued its strong advance. After breaking through 3,800 points, the index is approaching the 3,900-point mark, with even 4,000 points within reach. This shows that once market bullish sentiment is ignited, combined with external positive policies, it will greatly stimulate investors' enthusiasm for going long.

The Fed's September rate cut initiating this year's cutting cycle will impact major global assets. For instance, rate cuts will help drive U.S. Treasury bond rebounds and push gold prices higher, while also providing some support for commodity prices. Rate cuts reduce funding costs and boost commodity demand, creating positive effects for copper, aluminum, oil, and other commodity prices. Naturally, this also directly stimulates U.S. stocks. Although U.S. stock prices are already at historical highs, they surged again after rate cut certainty increased, demonstrating the significant impact of Fed rate cuts on global capital markets, particularly major assets.

Fed rate cuts will cause the dollar index to continue falling, non-dollar currencies to appreciate, and strengthen expectations for yuan appreciation. This will reduce concerns for China's central bank regarding rate and reserve requirement cuts, potentially leading to more decisive implementation of moderately loose monetary policy to stabilize economic growth and achieve the annual growth target of around 5%.

Recently, the A-share market has been surging, with the index continuously advancing upward, greatly boosting investor confidence and enthusiasm, with sentiment turning optimistic about future market prospects. During the second quarter market adjustment, particularly the sharp decline on April 7 due to tariff bond impact, I proposed that the second half's market performance would exceed everyone's expectations, with next year possibly operating above 4,000 points. At that time, many didn't believe there would be a bull market in the second half and even scoffed at the idea. But now the market has continuously risen, breaking through 3,800 points and approaching 3,900 points. Many investors have commented that I was too conservative, suggesting we might reach above 4,000 points before year-end. Once market momentum builds, everyone's emotions naturally rise with the tide.

Recently, I proposed that five streams of capital jointly drove this bull market. The first stream is the great migration of household savings from bank deposits, entering the market through stock or fund purchases. The second stream is institutional capital support, including insurance funds, public funds, private funds, social security, and other institutional investors increasing equity positions, boosting market capital volume. The third stream is capital flowing out of bond markets into stock markets. During the recent stock market surge, domestic bond markets fell sharply, with the stock-bond seesaw clearly favoring the stock market, consistent with the current economic recovery backdrop. During economic recovery periods, stocks perform better and bond bull markets end. The fourth stream is capital flowing from property markets to seek opportunities in stock markets. Currently, China's property market is generally sluggish, with changed expectations for housing price increases. Some discuss whether to sell properties to speculate in stocks, but houses are difficult to sell with low transaction volumes. However, some investors with multiple properties might sell some for cash, becoming stock market reinforcements. The fifth stream is capital exiting from overcapacity and traditional industries, seeking investment opportunities. The strengthening stock market has attracted these funds flowing out of traditional industries. For traditional industries, transformation is difficult, with most companies failing at transformation, especially under current economic slowdown conditions. Transformation through capital markets has become a shortcut. For example, if you're bullish on liquor, starting your own factory to compete with leading liquor companies has almost no chance of winning. But investing in good liquor companies through capital markets has much higher success rates, and after several years of decline, valuations are attractive with high dividend yields. Similarly, if you're bullish on semiconductors, self-investment success rates are low, but investing in good semiconductor companies through secondary markets might achieve transformation. Transformation through capital markets will become an important avenue for many traditional industries.

While we cannot predict specific point levels now, we can estimate through valuations. The CSI 300's current P/E ratio is about 14-15 times, with historical average P/E around 18 times, suggesting at least 20% upside potential relative to current valuations. A 20% rise would correspond to the Shanghai Composite above approximately 4,500 points. At 4,500 points, CSI 300 valuations would only reach historical averages, without obvious bubbles, only localized bubbles. Of course, markets won't stop at historical average valuations and will certainly create bubbles, with bubble size depending on subsequent capital inflows and investor enthusiasm. Therefore, further upward expansion after reaching 4,500 points is relatively certain. Even breaking through 2015's 5,000-point level or 2007's 6,000-point level is not impossible.

Over the past few years, China's stock market was severely undervalued, and investor bullish enthusiasm was suppressed. Now we have favorable timing, location, and people. From timing perspective, national fortune is in a new upward cycle, with policies strongly supporting capital market development and promoting long-term capital market entry. From location perspective, five streams of capital are entering. From people perspective, sentiment favors rises, as everyone needs a bull market to boost confidence, consumption, and improve lives. Local governments might also shift from land-based finance to equity-based finance. Favorable timing, location, and people jointly determine this bull market is a once-in-a-decade super bull market, not just an ordinary bull market. I believe this bull market is a slow, long bull market that, while potentially accelerating in some phases, will last 2-3 years overall, not a fast, crazy bull. From the beginning, off-exchange financing has been strictly monitored, preventing excessive investor leverage, with investors only able to leverage through on-exchange margin trading. Recent margin balances have exceeded the 2 trillion mark, but I consistently advise everyone to control positions and avoid leverage even in bull markets, because bull markets aren't smooth sailing either. There will be multiple major adjustments that could create significant position risks for leveraged accounts. If positions are liquidated and accounts are lost, subsequent bull markets become irrelevant. Investing is a lifelong career, not overnight success. Don't harbor get-rich-quick mentalities; learn to get rich slowly like Buffett. Buffett's annual investment performance wasn't the most outstanding, with about 20% annualized returns, but he achieved compound growth for 60 years, realizing unprecedented 55,000-fold returns and creating investment history legends. Everyone should adopt long-term, value investing mindsets, seize this market opportunity, learn to get rich slowly, and achieve real wealth growth. Only this way can it truly drive economic strength and consumption growth.

Comparing this major bull market with the 2006-2007 and 2014-2015 bull markets, commonalities include high-level market action and upward momentum potentially exceeding everyone's expectations. Investors will generally profit in this major bull market, with only very few losing money through chasing highs and selling lows or frequent trading, and many 10-bagger stocks will emerge. Differences lie in different upward logic. 2007 was mainly driven by economic fundamentals plus capital support, with steady market rise of several hundred points monthly. The 2014-2015 bull market saw no significant fundamental improvement but large capital inflows plus policy support, somewhat similar to this time. However, from fundamental perspectives this time, it's difficult for listed companies to achieve significant profit growth, with weak fundamental support. People can't find much confidence from real business either, but capital inflows and sentiment are high because much capital can't find other outlets, making the strengthening stock market an important inflow destination. Therefore, this is more like a capital-driven bull market, defined by some brokerages as a "liquidity bull." This bull market will be quite volatile because without fundamental support, everyone is very optimistic when rising, but once adjustments occur, much capital might rush for exits due to large divergences, potentially creating significant corrections. So this bull market will be difficult to sustain smoothly, with increased volatility. Investors should remain constant amid changes, positioning for medium-to-long term by selecting good industries and companies to handle market volatility. Importantly, maintain firm confidence, adopt bull market thinking, with each major adjustment potentially being an opportunity to add positions, and each adjustment followed by further rises, unless bubbles form, when caution is needed. Moreover, this is a bull market during economic transformation, with technology innovation companies becoming leading sectors, making the tech bull the most important characteristic of this bull market round.