Today's A-shares are simply a day of great miracles. In the afternoon, the three major indexes rose in a straight line, among which the real estate sector, brokerages and banks all pulled up one after another, making the masses look dumbfounded and ask, what on earth has happened?

The three major indexes rose by more than 1%.Brokers and real estate companies collectively pull up in the afternoon.

Today's A shares opened low and went high, further pulled up in the afternoon, the three major indexes are all up more than 1%!

Foreign capital has also poured into more than 8 billion yuan northward.

The most eye-catching is the real estate stocks, Wantong development, high-tech development limit, Sunshine City approaching the limit.

The bull market flag-bearer brokerage plate is also driving up share prices. Xiangcai shares are up by the daily limit, Great Wall Securities are up 7.5%, and GF Securities Co., LTD. is up more than 6%.

The inner housing stocks of Hong Kong stocks are even more exaggerated.

Why pull up all of a sudden?

There is news from the market: today, the supervision held a meeting and informed all commercial banks to hold a meeting to require more development loans, which must be surfaced before the end of the year.

There is also news that a large bank has fully liberalized its mortgage loans.

Some investors also think that the money will have good news over the weekend or next week. a few days ago, Commerzbank predicted that in order to help small and medium-sized enterprises and support economic growth, China may cut the quoted interest rate in the one-year loan market by 5 basis points in November. Zhou Hao, a senior economist at Commerzbank in Singapore, said that reducing LPR means reducing corporate costs, but the central bank can still control the overall credit supply. Mr Zhou pointed out that Chinese authorities were unlikely to lower the five-year LPR because they "may not want to send too strong an incentive signal to the property market".

However, CITIC Mingming bond research team does not think so, clearly believe that the fourth quarter cut, GMLF interest rate cut expectations have failed, the lack of guidance to cut interest rates, LPR downward space is insufficient. At the same time, the biggest economic uncertainty lies in real estate, policy adjustment is limited to marginal easing of credit policy, and monetary policy prefers structural instruments. The probability of LPR downgrade in November is low, with the gradual emergence of fiscal strength and wide credit, LPR interest rate cut is not worth the game.

There is no cut in interest rates and reserve requirements, and there is insufficient room for LPR reduction. LPR is quoted by quotation banks at the medium-term lending convenience rate plus points. Historically, except in September 2019, one-year LPR cut 5BP in the context of no change in MLF interest rates, all other cases are LPR and MLF changes synchronously. The extent of the increase is related to many factors, such as the cost of capital, risk premium, market supply and demand, etc., and it is difficult to create enough space for the reduction of LPR simply. Cost reduction measures such as deposit benchmark interest rate reform have been continuously promoted in recent years, but have little impact on LPR.

An asymmetric reduction in LPR would depress bank spreads, which is not conducive to broad credit. Historically, the change of bank net interest margin has been ahead of the growth rate of loans and total bank assets. In the absence of reserve requirement and interest rate cuts, stable inter-bank liquidity and no obvious downward trend in debt-side costs, asymmetric LPR interest rate cuts will reduce the net interest margin of banks. In an environment where economic expectations are more pessimistic, banks are not willing to increase credit lending, the effect of LPR reduction may be very limited, and banks have no incentive to take the initiative to lower LPR.

Finally, I wish you all a good weekend!