Here is the translation of the provided text into English: As the Federal Reserve initiates an easing cycle for the first time in four years, has the stock market's playbook for rate cuts changed?

Generally, when the Federal Reserve lowers interest rates to stimulate the economy, investors, driven by a need for safety, tend to opt for defensive stocks and high-dividend stocks, steering clear of growth stocks that are susceptible to macroeconomic influences, including the technology sector.

However, during this rate cut, the U.S. economy still showed resilience, and the subsequent effects were technology stocks leading the charge, the stock market reaching new highs, the economy continuing its growth trend, and corporate earnings prospects improving.

Looking at the post-rate cut capital flows, investors are shifting from defensive stocks to cyclical stocks.

According to data from Goldman Sachs Group's prime brokerage business, last week, hedge funds bought TMT stocks (Technology, Media, Telecommunications) for the third consecutive week, with net positions reaching their highest in four months.

Meanwhile, defensive stocks saw their largest net sell-off in over two months, with utilities experiencing the largest capital outflow in more than five years.

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Antimo's Senior Portfolio Manager, Frank Monkam, stated, "The Federal Reserve's decision to significantly cut rates in a financial environment that is quite loose is a clear signal to the market that an aggressive stance on holdings should be taken."

"Traditional defensive stocks, such as utilities or consumer stocks, may not be very attractive."

Why is this rate cut referred to as a "non-recessionary rate cut"?

According to data from Bank of America, out of the nine easing cycles since 1970, eight occurred during a slowdown in corporate earnings.

However, the bank's head of equity and quantitative strategy, Savita Subramanian, wrote in a report to clients: "The current situation is that earnings are expanding, which is favorable for cyclical stocks and large-cap stocks."

This implies that the Federal Reserve is not cutting rates due to an economic recession.

Subramanian said, "The Federal Reserve has no script—each easing cycle is different."

However, looking at historical rate cut cycles, each time the Federal Reserve cuts rates, it often leads to an overall rise in the market.

Bank of America data shows that, in the absence of a recession, the S&P has averaged a 21% increase within one year after the Federal Reserve's first rate cut since 1970.

So, what kind of investment style does the Federal Reserve's "non-recessionary rate cut" bring?

As Subramanian put it, investors are turning to cyclical stocks, large-cap stocks, and other sectors that are currently in growth.

Industries such as real estate and automobiles are also expected to grow, benefiting from the stimulative effect of the loose environment on consumption.

Phil Blancato, CEO of Ladenburg Thalmann Asset Management, said, "You will see excited consumers—the decline in mortgage interest rates will stimulate consumption, whether it's in the housing market or the automotive market."

Traditional utility stocks in the trading strategy continue to be hot, as the AI investment boom increases the attractiveness of the sector.

In fact, utility stocks have risen by 26% this year, making them the second-best performing sector in the S&P.