After the press conference of the Ministry of Finance, Morgan Stanley stated that the current fiscal and reform policies gradually coming into effect are in line with the policy shift framework that the bank has been predicting since mid-September. The bank pointed out that there has been a change in policy mindset, and decision-makers are actively seeking solutions to problems. The scale and implementation details of the debt swap plan are the focus of the market's attention. Considering that the press conference mentioned that approximately 34 trillion yuan of swap quotas have been arranged since 2022, it is reasonable to speculate that the future one-time expansion of quotas will be significantly higher than this number. Morgan Stanley estimates that this scale could reach around 60 trillion yuan and will be gradually utilized in the coming years. This scale will help to distribute the burden of local debt more evenly, allowing local governments, the financial system, and creditors to more fairly bear the pressure of deleveraging, thereby achieving the so-called "beautiful deleveraging". Morgan Stanley pointed out that to achieve China's re-inflation, it is necessary to restart debt, stimulate the economy, especially consumption, and reform confidence. After the meeting of the Ministry of Finance, if the promised policies can be implemented, some progress can be expected in restructuring debt and protecting entrepreneurial confidence in the next six months. The bank is willing to give a 60% to 80% progress in debt restructuring and a 50% to 60% progress in protecting entrepreneurial confidence. Although policies directly stimulating consumption have not yet been implemented, and even the swift resolution of problems through fiscal stimulus remains uncertain, the overall progress on the path to achieving re-inflation in China has accelerated significantly compared to a few months ago. Financial policies play an important role in the battle for re-inflation. On September 24th, three financial departments injected confidence into the market, indicating that financial policies are actively supporting economic growth and re-inflation. If other departments can also learn to communicate with the market in this manner, clarifying China's intention for re-inflation more clearly, it will help to form a united front and jointly promote economic growth. Although there may be some bumps and coordination issues in the early stages of the re-inflation battle, with the gradual implementation of policies and market adaptation, these difficulties are believed to be gradually overcome. As for the future direction of the market, Morgan Stanley believes that overall sentiment and fund flows are likely to trend towards stability, with more tools to expect from the fiscal side. This indicates the future policy space and focus. The market is more likely to gradually stabilize in terms of sentiment and fund flows. However, Morgan Stanley also emphasizes that this fund flow is not casting a wide net, but rather focusing on avoiding some downside risks in the short term, so focusing on opportunities in stocks with stable earnings expectations and high dividends. The bank suggests that investors focus on the impact of the progress of China's re-inflation process on consumer stocks. In previous trends, market expectations for China's re-inflation process drove the rise of consumer-related stocks. These stocks include not only narrowly defined consumer stocks but also industries broadly related to re-inflation and consumer goods, such as large-cap Internet, travel and tourism, and service industries. Although specific details of policy implementation have not been fully revealed, resulting in some market corrections and increased volatility, it does not mean that the rebound of consumer stocks is over. On the contrary, as policy implementation progresses gradually and market expectations become clearer, consumer stocks may continue to rebound. Therefore, Morgan Stanley advises investors to focus on consumer stocks with relatively low valuations and guaranteed quality. Particularly, stocks that have already announced stock buyback or dividend plans this year or recently are more likely to perform well in future trends. At the same time, Morgan Stanley believes that in the next few weeks, external risks are no less significant than domestic policy uncertainties. Specifically, it is necessary to closely monitor the complex and intricate geopolitical situation, which may have far-reaching impacts on global markets. In addition, the upcoming US election, the results of which will have a significant impact on the global economy and policy direction, as well as the Federal Reserve's interest rate decisions in the US, are aspects that need to be closely monitored as they will significantly affect global capital flows and financial markets. In this process, the movement of the US dollar will also have a series of impacts on the attractiveness of non-dollar-denominated assets. As the world's major reserve currency, fluctuations in the US dollar will directly affect the exchange rates and asset prices of other currencies. Therefore, it is important to closely monitor the movement of the US dollar and its potential impacts on global and Chinese market assets.