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Market Overview
The U.S. ISM manufacturing index shrank for three consecutive months in June, and the price indicator fell by the most in more than a year, confirming the market's bets on two interest rate cuts this year. Markets are focused on Fed Chair Powell's speech on Tuesday and June nonfarm payrolls on Friday. The U.S. Supreme Court's favorable ruling on Trump's presidential candidacy pushed the dollar and long-term Treasury yields higher, and Wall Street suggested a plan for the prospects of Trump's election.
The Dow closed up in late trading, the Nasdaq closed at a new high, Apple and Microsoft hit a new high, Tesla rose more than 6% to lead the technology "Seven Sisters", Nvidia fell 3.8% and then turned up, and the chip index fell 1.8% in early trading but closed up after midday. The yield on the 10-year Treasury note rose 15 basis points to a new one-month high, and the yield curve in the bond market steepened.
European stocks rose 2.5% intraday as France's far-right primaries fell short of expectations, and the 10-year German bond yield rose about 11 basis points as safe-haven demand cooled, with the 10-year French bond yield reaching its highest in seven months.
The dollar turned lower after updating its daily high, with the euro rising 0.6% to a two-week high and the yen falling to 161.74, its lowest since 1986.
Oil prices rose about 2% to a two-month high. Bitcoin rose above $63,000.
In the Chinese market, during the U.S. stock market, the China Concept Index rose 1.6% and then halved, NIO and Li Auto rose 6.7%, Xpeng Motors rose more than 5%, and the offshore yuan fell 100 points. The Shanghai Composite Index rose nearly 1% as Treasury bonds took the lead in diving during the Asian session on Monday afternoon.
News
The People's Bank of China (PBOC) has decided to launch treasury bond borrowing operations for some primary dealers in the open market in the near future. Treasury futures dived in the afternoon, with 30-year Treasury futures falling 1%.
New energy vehicle companies in June delivery qualifying: NIO, ZEEKR reached new highs, Xiaomi exceeded 10,000, and Wenjie's monthly delivery exceeded 40,000. Report: BYD's electric car sales hit a record high in the second quarter, and it is expected to surpass Tesla to return to the first place in the world. Driven by the rise of Chinese electric vehicle peers such as NIO and Ideal, Tesla rose more than 7% on Monday.
The U.S. Supreme Court ruled in Trump's favor on immunity, and the dollar jumped to daily highs.
Hedge funds are selling and shorting U.S. stocks at the fastest pace in two years.
The ISM manufacturing sector in the United States shrank for three consecutive months, and the price index fell by the most in more than a year.
France's antitrust regulator plans to bring charges of anticompetitive conduct against Nvidia, becoming the first country to take antitrust action against Nvidia.
The market closes
U.S. stocks: The Dow rose 0.13%, the S&P 500 rose 0.27%, and the Nasdaq rose 0.83%.
European stocks: The European STOXX 600 index closed up 0.31%. Germany's DAX 30 index closed up 0.30%. France's CAC 40 index closed up 1.09%. Britain's FTSE 100 index closed up 0.03%.
A-shares: The Shanghai Composite Index rose 0.92%, the Shenzhen Component Index rose 0.57%, and the ChiNext Index fell 0.04%.
Bond market: The yield on the benchmark US 10-year Treasury rose 8.31 basis points to 4.4791%. The yield on the two-year Treasury note rose 1.46 basis points to 4.7681%.
Commodities: WTI crude oil futures for August delivery closed up $1.84, or 2.26%, at $83.38 a barrel. Brent crude futures for September delivery closed up $1.60, or 1.88%, at $86.60 a barrel. Spot gold rose 0.22% to $2,331.90 an ounce. London copper closed down more than 0.3%, and London rose about 0.5%.
Highlights
Global blockbuster
The People's Bank of China (PBOC) has decided to launch treasury bond borrowing operations for some primary dealers in the open market in the near future.
- Ming Ming, chief economist of CITIC Securities, said that this move means that the sale of treasury bonds may be carried out in the open market this week. At a time when the yield on 10-year Treasury bonds has fallen to a record low, selling Treasury bonds is conducive to stabilizing long-term bond interest rates and guarding against interest rate risks.
- Treasury futures dived in the afternoon, with 30-year Treasury futures falling 1%, after rising more than 0.39% and hitting a record high. Stocks rebounded, with the Shanghai Composite up nearly 1%.
New energy vehicle companies in June delivery qualifying: NIO, ZEEKR reached a new high, Xiaomi exceeded 10,000, and Wenjie delivered more than 40,000 in a single month; Report: BYD's electric car sales hit a record high in the second quarter, and it is expected to surpass Tesla to return to the first place in the world
- Li Auto delivered more than 40,000 yuan in a single month, returning to the top of the new force's sales; The monthly delivery of Cialis surged by 372% year-on-year, and the monthly deliveries of NIO and ZEEKR both exceeded 20,000, hitting a record high; Xiaomi, the latest new force to enter the game, delivered more than 10,000 in a single month, and it is expected that the delivery volume will continue to exceed 10,000 in July.
- Media data shows that in the second quarter of this year, BYD sold nearly 1 million pure electric and hybrid vehicles, setting a new historical record. In comparison, Tesla's electric car sales were 441,000 units, down 5.4% year-on-year, which would be Tesla's second consecutive quarter of sales decline. According to the analysis, the cooling of the electric vehicle market and the fact that the models are too old may be the reason for the decline in Tesla's deliveries.
- However, driven by the gratifying delivery of Chinese electric vehicle peers such as NIO and Ideal, and the rise in stock prices, Tesla's stock price rose more than 7% on Monday.
The U.S. Supreme Court ruled in Trump's favor on immunity, and the dollar jumped to daily highs. The Supreme Court ruled on Monday that Mr. Trump could be partially exempted from criminal charges for allegedly trying to overturn the results of the 2020 election, a result that all but ensured that he would not be tried by a court until the U.S. presidential election in November.
Hedge funds are selling and shorting U.S. stocks at the fastest pace in two years. U.S. retail investors are still buying tech stocks such as Nvidia, but Wall Street's "smart money" has begun to sell off most of its semiconductor-based stocks.
The ISM manufacturing sector in the United States shrank for three consecutive months, and the price index fell by the most in more than a year. According to the analysis, the U.S. manufacturing industry is still struggling. However, there are bright spots in the data - the new orders index has rebounded. Medium- and long-term Treasury yields rose by at least 8 basis points after the ISM data. Earlier in the same day, the Markit manufacturing PMI showed that the final value of the Markit manufacturing PMI in the United States in June was 51.6, and unlike ISM, S&P Global pointed out that input prices rose further significantly.
France's antitrust regulator plans to bring charges of anticompetitive conduct against Nvidia, becoming the first country to take antitrust action against Nvidia. France launched a raid on Nvidia in September last year. If found to have monopolistic behavior, Nvidia could be fined 10% of its annual revenue. Nvidia shares fell as much as 3.8% in early trading on Monday, but then recovered losses and turned higher.
Domestic macro
China's Caixin manufacturing PMI rose to 51.8 in June, the highest since June 2021. The export price index stood on the line of prosperity and withering for the first time this year, the growth rate of output hit a two-year high, and the optimism of entrepreneurs dropped significantly.
The UN General Assembly adopted a resolution on strengthening international cooperation on AI capacity building proposed by China, which was co-signed by more than 140 countries.
Non-Chinese permanent residents of Hong Kong and Macao can apply for Mainland Travel Permits from 10 July.
Domestic companies
The capital expenditure of the chip industry chain is fierce, and TSMC and Hynix have expanded production on a large scale; ASML's performance may also be revised upward.
- TSMC's capital expenditure in 2025 is expected to reach $36 billion, the second highest in history, mainly for the R&D and capacity expansion of the most advanced processes such as 2nm. South Korea's SK hynix plans to invest up to $74.8 billion by 2028, 80% of which will be used for the R&D and production of HBM chips. Two major positive news raided ASML, and the market naturally thought about whether ASML's performance was going to be raised.
Overseas macro
"New Fed News Agency": Even if employment cools slowly, the United States will recession. According to Timiraos, the biggest challenge for the Fed now is finding a balance between controlling inflation and maintaining healthy employment. The seemingly gradual equalization of labor market data is not driven by employment gains, but by fewer job openings.
Germany's preliminary CPI fell to 2.2% year-on-year in June, a new low in more than three years. Bundesbank President Nagel, a member of the ECB's Governing Council, said he saw "some glimmers of hope" in the German economy. At the same time, he pointed out that Germany needs more investment to boost economic growth.
Israel threatens to "send Lebanon back to the Stone Age". Since the outbreak of the Israeli-Palestinian conflict last October, the conflict between Israel and Allah has escalated and the risks have intensified. According to foreign media analysis, the two sides are in a dilemma where they can neither give in to weakness nor retreat, and the conflict continues to escalate.
India's final manufacturing PMI in June was 58.3, which was in the expansion range for three consecutive years. The final value of the HSBC India manufacturing PMI rose to 58.3 in June, slightly lower than the preliminary value of 58.5 and a significant rebound from the previous value of 57.5. Upbeat demand boosted India's manufacturing output and new orders in June, extending the duration of the expansion to three years.
AI demand is strong, and South Korea's chip exports hit a record high in June. South Korea's semiconductor shipments in June were $13.4 billion, up 50.9% year-on-year, a record high, thanks to strong semiconductor demand.
In the past, the largest exchange in the currency circle, Mt. Gox will return users to sky-high bitcoins this month, and a $9 billion smash may be coming. Bitcoin fell 10% in the second quarter, the "ETF mania" subsided, and the tech bigwigs have "run away". After hitting an all-time high of $73,000 in March, Bitcoin has been on the decline, with inflows into Bitcoin ETFs falling 80% QoQ to just $2.6 billion in Q2. Even the PayPal founders sold most of their Bitcoin positions.
Overseas companies
Mustafa Suleyman, CEO of Microsoft AI: By the end of the year, we will have a real-time voice interface that allows for completely dynamic interactions. The development of AI will have a lasting impact, and the future will be an era when the cost of knowledge production is close to zero. A global governance mechanism is needed to ensure that AI technology benefits society.
The EU wields the anti-monopoly stick again, pointing at Meta's "pay or agree" model, and the fine may exceed 10 billion US dollars!
The "big brother of retail investors" bought Chewy, a pet concept stock, and sued the storm for a reversal. Keith Gill was sued by the plaintiffs for trying to manipulate GME's share price, but the case was soon voluntarily dropped on Monday. On the same day, after Gill's 6.6% stake in Chewy was revealed, Chewy soared 10% at one point, but turned down 6.6% at the close. It's unclear whether Gill sold GME shares to fund the purchase of Chewy, which fell more than 5% on Monday.
Industry/Concept
1. Low-orbit satellites According to China Mobile, recently, China Mobile, together with ZTE and UNISOC, completed the world's first mobile phone directly connected to high-orbit satellite-based operator network IOT-NTN IMS (Satellite Internet of Things IP Multimedia Subsystem) voice call laboratory verification. High-orbit satellite communication has the advantages of wide coverage and high industrial maturity, and real-time voice communication in high-orbit satellite scenarios can effectively meet the voice communication needs of people in remote environments such as oceans and forests, and provide a more solid guarantee for emergency communication.
Comments: CICC Research Institute believes that direct mobile phone connection is the focus of satellite Internet competition, and it is also the core scenario that affects the commercial value of satellite Internet systems. The direct connection of mobile phones is expected to reconstruct the satellite-to-ground communication system, and the satellite communication module and on-board payload are expected to benefit. Specifically, dual-mode terminals add miniaturized satellite communication modules to mobile phones, and the penetration rate of high-end models is increased; Large-scale phased array is one of the key technologies to realize the direct connection of existing terminals. Referring to the capital expenditure of 5G construction, the construction of satellite-ground integrated network may leverage the demand for hundreds of billions of equipment.
2. Vitamins| Baichuan Yingfu data shows that on July 1, the average market price of vitamin D3 was 97 yuan/kg, an increase of 14.12% from June 30, and a cumulative increase of 67% in the past month.
Comments: Hua Chuang Securities Research Institute believes that the vitamin market is a typical high-concentration industry, and the industry has been overhauled frequently recently. Overseas DSM VA and VE have been in a state of shutdown since the third quarter of 2023, BASF will start overhauling VA and VE from the end of March 2023, and the VE plant in Xinhecheng Shandong is also scheduled to be overhauled from early July to early September.
3. Sodium battery According to Jiemian News, on June 30, the world's largest sodium-ion battery energy storage project, Datang Hubei 100 MW/200 MWh sodium ion new energy storage power station science and technology innovation demonstration project, the first phase of the scientific and technological innovation demonstration project, was completed and put into operation, with a production scale of 50 MW/100 MWh. This project marks a new stage of large-scale commercial application of sodium-ion battery energy storage technology.
Comments: Media reports point out that with the continuous development of the energy sector, from lithium-ion batteries to photovoltaic power generation to energy storage systems, sodium-ion batteries are seen as the next promising technology. Although sodium-ion batteries have a low energy density, their cost advantages, safety, and high and low temperature performance bring potential application prospects. Compared with lithium-ion batteries, sodium-ion batteries have the advantages of abundant resource reserves, low cost, and fast charging. Theoretically, the cost of sodium battery materials can be 30%-40% lower than that of lithium batteries. However, it lags behind lithium-ion batteries in terms of energy density, and is suitable for market segments such as electric two-wheelers, energy storage, and low-speed electric vehicles.
4. The Belt and Road Initiative According to Shangguan News, the Council of Heads of State of the Shanghai Cooperation Organization will be held in Astana, the capital of Kazakhstan. After 23 years of joint efforts, the SCO has become a security barrier, a bridge of cooperation, a bond of friendship and a constructive force in the region. According to the memorandum signed at last year's SCO summit, Belarus will join the SCO as a full member at the Astana summit, bringing the number of SCO member states to double digits, a "historic breakthrough" and a sign that the SCO is gradually becoming the most influential regional international organization.
Comments: Analysts believe that this meeting will emphasize the strengthening of trade, investment and infrastructure construction, and consider the development of a unified map of transport connectivity, which has great geo-economic and political value in terms of transport connectivity, and will promote the deep integration of China and the international markets of Central Asia, South Asia, West Asia and Europe, and become a landmark project for interconnection and mutual benefit between China and the countries covered by the SCO under the framework of the "Belt and Road". It will not only build the southern access road of the new Eurasian land bridge and broaden the transportation scope, but also change the traffic pattern in the western part of the mainland.
5. Non-ferrous lead According to the terminal, as of June 30, the Shanghai Lead 2409 futures contract (code: PB2409) listed on the Shanghai Futures Exchange has risen for four consecutive months, with a cumulative increase of 22.34% this year. In the past, the first half of the year was the off-season for lead consumption, but now there is a pattern of off-season.
Comments: Industry insiders said that the supply of lead concentrate is tight, the operating rate of recycled lead production capacity is low, and overseas demand is strong, and it is expected that lead prices are expected to rise further when the regular peak season arrives in the second half of the year.
Today's news preview
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