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Market Overview
As markets awaited Wednesday's Federal Reserve meeting minutes and Thursday's United States CPI inflation data, U.S. stocks rose, with the Nasdaq up 1.5% and Nvidia up 4% to a three-month high. The S&P broader rose about 1%.
A few days ago, the Chinese concept stocks rebounded, and the China Concept Index fell nearly 7%, the largest decline in a year and a half. Station B fell nearly 13%, and NIO, Li Auto and Tencent ADR fell more than 8%. European luxury stocks fell. The offshore yuan fell below 7.07 yuan.
United States bond yields stood above 4%, and 10-year Treasury yields hit their highest in nearly a decade. The U.S. dollar is hovering at a near eight-week high.
Commodities plummeted. U.S. oil fell more than $4.40 or 5.7% at its deepest, once falling below $73. Gold fell for five consecutive days, falling 1.4% intraday and approaching the $2,600 mark. Silver fell as much as 5% at one point. London copper fell nearly 2%.
During the Asian session, AH shares were released in large quantities. The trading volume of the Shanghai and Shenzhen markets exceeded 3.45 trillion yuan, hitting a record high, with the ChiNext index closing up more than 17% and the Shanghai Composite Index rising 4.6%. In terms of Hong Kong stocks, the market turnover was HK$620.4 billion, also a record high, Hong Kong stocks fell below the 930 closing point, and the Hang Seng Technology Index closed down 12.8%.
News
Li Qiang: Study and reserve a number of policy measures to stabilize the economy and promote development, and launch them in a timely manner according to changes in the economic situation. To enhance the consistency of macroeconomic policy orientation, all parties should actively introduce policies that are conducive to stabilizing growth and expectations.
National Development and Reform Commission: Next year, we will continue to issue ultra-long-term special treasury bonds to support the "two-fold" construction.
Nvidia surged more than 4% to a three-month high. Hon Hai said that the demand for Blackwell chips is too crazy, and it is building the world's largest GB200 factory, which is expected to be shipped in the fourth quarter. The NVIDIA summit advertised the energy efficiency of the Blackwell chip. TSMC applied the NVIDIA platform, 350 sets of H100 replaced 40,000 CPUs, and accelerated computing to set off a revolution in semiconductor manufacturing.
AI chip competition lagged behind, Samsung's Q3 operating profit fell 12.8% month-on-month, and the person in charge of the chip rarely apologized.
Reports that Israel is considering striking Iran's energy facilities have narrowed the decline in oil prices for a while.
2024年诺贝尔物理学奖颁给了两位AI教父:John Joseph Hopfield和Geoffrey E. Hinton。
The market closes
U.S. stocks: The Dow rose 0.3%, the S&P 500 rose 0.97%, and the Nasdaq rose 1.45%.
European stocks: Europe's STOXX 600 index closed down 0.55%. Germany's DAX 30 index closed down 0.11%. France's CAC 40 index closed down 0.72%. United Kingdom's FTSE 100 index closed down 1.37%.
A-shares: The Shanghai Composite Index rose 4.59%, the Shenzhen Component Index rose 9.17%, and the ChiNext Index rose 17.25%.
Bond market: The yield on the benchmark 10-year Treasury note in United States was largely flat at 4.0256%. The yield on the two-year Treasury note fell 2.86 basis points to 3.9666%.
Commodities: WTI crude oil futures for November delivery closed down $3.57, or 4.63%, at $73.57 a barrel. Brent crude oil futures for December delivery closed down $3.75, or 4.63%, at $77.18 a barrel. COMEX gold futures closed down 0.8% at $2,640.6 an ounce. COMEX silver futures closed down 3.29% at $30.89 an ounce. LME copper fell 1.89%.
Highlights
Global blockbuster
Li Qiang: Study and reserve a number of policy measures to stabilize the economy and promote development, and launch them in a timely manner according to changes in the economic situation. Li Qiang stressed that we should pay close attention to the implementation of a package of incremental policies, speed up the implementation of the policies that have been introduced, ensure early implementation and early results, and come up with specific plans for the policies being studied as soon as possible. Track and evaluate the effect of policy transmission, the optimization of the optimization, and the afterburner of the afterburner. At the same time, in combination with the planning of next year's economic work, we will study and reserve a number of policy measures to stabilize the economy and promote development, and launch them in a timely manner according to changes in the economic situation.
Li Qiang: To enhance the consistency of macroeconomic policy orientation, all parties should actively introduce policies that are conducive to stabilizing growth and stabilizing expectations. Li Qiang pointed out that it is necessary to accurately grasp the focus of the consistency of macroeconomic policy orientation. It is necessary to strengthen the coordination of policy objectives, and to determine the goals from the overall needs of economic and social development, consciously obey the overall situation, and serve the overall situation. In particular, under the circumstances of relatively strong downward pressure on the economy, all sectors should actively introduce policies conducive to stabilizing growth and stabilizing expectations, and prudently introduce policies that have contractionary and inhibitory effects.
National Development and Reform Commission: Next year, we will continue to issue ultra-long-term special treasury bonds to support the "two-fold" construction. Zheng Shajie, director of the National Development and Reform Commission, said that in response to the new situation and new problems in the current economic operation, the Party Central Committee and the State Council have stepped up to launch a package of incremental policies. In view of the lack of effective domestic demand and other problems, the focus of the policy of expanding domestic demand is more on benefiting people's livelihood and promoting consumption.
Hon Hai: The demand for Blackwell chips is too crazy, and the world's largest GB200 factory is being built, which is expected to be shipped in the fourth quarter. Liu Yangwei, chairman of Hon Hai, said that the market demand for Blackwell chips has reached a "crazy level". Not only GB200 chips, but also key AI components, servers, and even AI data centers, Hon Hai will be the first company to mass-produce and ship these super chips. The company plans to produce 20,000 NVIDIA NVL72 cabinets by 2025.
Nvidia's summit promoted the energy efficiency of the Blackwell chip, and its stock price rose 4% to a three-month high. Company executives estimate that AI will have an impact of up to $20 trillion across all industries that leverage the technology. He also highlighted NVIDIA's AI software services and various software platforms. Some analysts say that by showing software, Nvidia hopes to prove that it is not just a chip company, and that software can not only retain customers, but also bring a recurring revenue stream in addition to hardware sales. Since its Sept. 6 low, the stock has rebounded sharply 28%, overtaking Microsoft to become the world's second-largest by market capitalization.
TSMC applied the NVIDIA platform, 350 sets of H100 replaced 40,000 CPUs, and accelerated computing to set off a revolution in semiconductor manufacturing. NVIDIA's platform, cuLitho, dramatically speeds up computational lithography, a cornerstone step in chip manufacturing. Through this platform, NVIDIA and TSMC have increased the curve process speed of photomasks by 45 times and the speed of traditional Manhattan processes by nearly 60 times. On top of cuLitho's faster process, NVIDIA's generative AI application algorithm triples the speed.
AI chip competition lagged behind, Samsung's Q3 operating profit fell 12.8% month-on-month, and the person in charge of the chip rarely apologized. Samsung said the decline in its storage division was due to "one-time costs and negative impacts," including inventory adjustments for mobile device maker customers, as well as delays in shipments of high-bandwidth memory HBM3E chips.
Reports that Israel is considering striking Iran's energy facilities have narrowed the decline in oil prices for a while. United States officials told NBC that Israel is considering striking Iran's energy facilities. The news pared oil prices' intraday losses on Tuesday, with WTI crude prices briefly recovering above $74 a barrel. Andurand, a well-known hedge fund manager, recently predicted that oil prices could soar by $10-$15 a barrel if Israel strikes Iran's oil export facilities. On Tuesday, oil prices fell more than 4.6% after a sharp rally in previous sessions.
The 2024 Nobel Prize in Physics was awarded to two godfathers of AI! "The two Nobel laureates in physics have used physics methods to find features of information, building methods that lay the foundation for today's powerful machine learning," the Nobel laureate said. ”
Domestic macro
Zhang Yidong: After the big rise, there must be big fluctuations and big differentiation, so that the cows can run slower, cheer for the shock, and don't increase leverage to chase the rise. Zhang Yidong said that whether it is A-shares or Hong Kong stocks, it is not just a bottoming out, it may be a more optimistic reversal logic. A prediction for A-shares after the holiday is the "big three" - big rise, big fluctuations, and big differentiation. The historical mission of the mad cow has been accomplished, and the pace needs to be slowed down and cheered for the shock.
Nearly 40 A-share listed companies disclosed their shareholding reduction plans, and experts said that it would not affect the overall market sentiment. On the evening of October 8, nearly 40 A-share listed companies disclosed the announcement of their shareholding reduction plans, among which Gree Electric intends to reduce its holdings in Wingtech Technology, a semiconductor listed company, with a reduction ratio of no more than 1%. Analysts pointed out that the sentiment of A-shares has improved significantly recently, and the stock prices of many listed companies have risen significantly, and some shareholders choose to cash out at this time.
A real estate company in Guangdong announced: the price of housing for sale in the country increased by 2%. On October 7, Midea Real Estate released a poster, announcing that from October 8, the national housing for sale will fully recycle a 2% discount for house purchases. "In fact, it is a unified price increase of 2%." According to people familiar with the matter, the reason why the price increase is not directly said is because the price can be packaged, and the discount is real, and customers can really perceive it.
Overseas macro
Fed officials set the tone for future rate cuts: "balanced", "cautious" and "data-based"; Fed triad: The United States economy is ready for a "soft landing" and supports a 25 basis point rate cut in November.
- Fed Governor Coogler believes that a balanced approach should be taken, both to reduce inflation and avoid an unnecessary slowdown in the economy and employment; There are some risk factors to inflation, and she's keeping an eye on Hurricane Helene and geopolitical events in the Middle East. Boston Fed President Collins said that to maintain the current favorable economic environment, he is more confident about the future decline in inflation, but the risk of an unnecessary economic slowdown increases. New York Fed President Williams believes that September's larger-than-expected non-farm payrolls data confirmed the resilience of the United States economy and that the economy is ready for a "soft landing." He agreed with the Fed's monetary policy, but at the same time said that the pace of interest rate cuts should be slowed.
The first 3-year U.S. bond auction after the Fed cut interest rates was dismal, and overseas demand plummeted. Financial blog Zerohedge commented that overall, it was a very bad auction, and considering that the market no longer expects the Fed to cut interest rates sharply in the coming months, the dismal US Treasury auction is actually expected, considering that US Treasury yields have soared sharply in recent weeks.
Where do U.S. tech stocks go from here? Goldman Sachs' top traders: Lack of confidence in the "Seven Sisters", but optimistic about the AI narrative. Goldman Sachs trader Peter Callahan said that investors are currently more inclined to the growth stocks at the top of the industry, the earnings outlook for Mag 7 is stable but uncertain, and chip stocks/AI stocks are ushering in the same or even better market conditions as in June this year.
Senior ECB official: Open to interest rate cuts in October, but there is no guarantee that they will continue to cut in December. Markets were betting that the ECB would cut interest rates in both October and December, and ECB Governing Council member Vasle's comments were seen as a counter-to to that expectation. He warned that the ECB would not be forced to take any action despite the weakness of the European economy and that such bets could be a natural reaction.
Japan's basic wage rose accelerated in August, UBS: companies remain optimistic about prices, and the next rate hike may be in December. UBS said Japan companies remain optimistic about rising prices and the labor market remains tight, which may support further interest rate hikes by the Bank of Japan. However, due to the dovish tone of the new Prime Minister Shigeru Ishiba, the next rate hike may be in December instead of October. Communication from the Bank of Japan after its October meeting will be key and may send a clear signal of a rate hike in December.
Overseas companies
The loan income of major Wall Street banks in Q3 may hit a two-year low, and the investment banking business is expected to recover. Wall Street's big banks are "leading the way" in the earnings season. Analysts expect the largest banks in the United States to see a decline in net interest income in the third quarter, which, combined with an increase in provisions for potential loan losses, will hit banks' overall profits; However, due to the Fed's interest rate cut, investment banking will recover, and profitable transactions such as M&A transactions and equity underwriting will gradually pick up.
Buffett sold United States banks again, cashing out a total of $10 billion, approaching the regulatory 10% exemption reporting threshold.
Roblox, the "first stock in the metaverse", was shorted by a well-known short-selling institution, accusing the key data of exaggeration, and the stock price plummeted. Short-seller Hindenburg accused online gaming platform Roblox of inflating key metrics and failing to take measures to keep children safe. Roblox shares fell more than 9% intraday on Tuesday after the release of the short report, the biggest drop in two months.
Meta is giving advertisers a perk: Facebook and Instagram add AI video tools to strengthen cooperation with content creators. Meta released a full-screen video tag, which can be used to watch long and short videos and live broadcasts, provide ads in a variety of formats, and also launch two new AI video ad creative tools, video expansion and picture animation, which will be fully launched next year; Advertisers can now run dual-headline ads with co-creator images or videos, test creator recommendations, and launch co-op tools on the Co-op Center page.
Industry/Concept
1. Data Elements| The National Development and Reform Commission and other departments recently issued the "Guidelines for the Construction of the National Data Standards System", proposing that by the end of 2026, the national data standard system will be basically completed, and 30 general national standards based on the above data fields will be formulated and revised around data circulation and utilization infrastructure, data management, data services, training datasets, public data authorization and operation, data rights confirmation, data resource pricing, and enterprise data paradigm transactions, forming a number of standard application demonstration cases, and building a standard verification and application service platform.
Comments: Minsheng Securities believes that the National Data Bureau has recently issued blockbuster policies to promote industrial development. Focusing on key subdivisions such as government affairs, medical insurance, and spatio-temporal data, attempts to confirm rights, enter the table, and trade have already begun. In the next stage, public data operation is expected to become a new breakthrough, key segments are expected to take the lead, promote data elements into an accelerated development period, and companies with first-mover advantages and subdivision advantages are expected to be held responsible.
2、AI| CES Shanghai will be held October 10-12 at the Shanghai New International Expo Centre. At this exhibition, nearly 200 technology companies from United States, Japan, United Kingdom, Austria, Germany and other countries and regions will appear. The GTIC 2024 China AIPC Innovation Summit will also be held at the same time.
Comments: Haitong Securities believes that in the field of consumer electronics, smartphones and PCs are an important part of the industry. Generally speaking, in the introduction and growth period of the product life cycle, the market demand tends to grow rapidly, technological innovation and product updates and iterations are frequent, and the market shows a strong growth momentum. In the future, the launch of terminals such as A1 mobile phones and AIPC is expected to boost the replacement demand of existing users. AI-enabled consumer electronics is expected to enter a new round of upward cycle.
3. Huawei Auto| On October 8, Yu Chengdong, chairman of intelligent vehicle solutions BU, said that during the 7-day National Day holiday, the cumulative number of Hongmeng Zhixing exceeded 28,600 units. Not only the M7 and M9 continue to sell well, but the R7 Dading also exceeds 9,600 units.
The industry believes that this year's automobile market "Golden Nine Silver Ten" has been significantly boosted by the daily exchange policy. During the National Day holiday, many places responded to the "trade-in" policy of automobiles, and nearly 20 cities held auto shows to gather popularity.
Comments: The analysis believes that the policy warm wind superimposes the new car cycle, the industry leader continues to show the advantages of pricing power, and the intelligent driving upgrade reshapes the competitive landscape. : Focus on the leading car companies that benefit from the increase in new models, as well as the technology and configuration upgrade direction of auto parts such as domain controllers, drive-by-wire chassis, air suspension, and car seats.
4. Artificial intelligence According to the Beijing News, the Royal Academy of Sciences of Sweden announced its decision to award the 2024 Nobel Prize in Physics to John J. Hopfield and Geoffrey E. Hinton "for their fundamental discoveries and inventions of machine learning through artificial neural networks." The official verdict says that the 2024 Nobel Laureate in Physics uses physics tools to build methods, laying the foundation for today's powerful machine learning.
Comments: According to the analysis, machine learning is an interdisciplinary discipline, covering fields such as statistics, artificial intelligence, and computer science. It enables computer systems to continuously learn and improve performance from data, automatically extracting patterns and features from data without explicit programming for tasks such as prediction, classification, clustering, and more. Machine learning is an important branch in the field of artificial intelligence and one of the important technologies to realize artificial intelligence. The global machine learning market is expected to be worth $96.7 billion by 2024, showing strong growth momentum.
5. Quantum Computing| According to Jimu News, it was learned from the Anhui Provincial Quantum Computing Engineering Research Center and the Anhui Provincial Key Laboratory of Quantum Computing Chips that recently, the mainland's first superconducting quantum computer manufacturing chain was upgraded and expanded. This means that the core links of superconducting quantum computer manufacturing such as the production of independent quantum chips and the assembly of complete machines in the mainland will be further improved, and the independent manufacturing capacity of superconducting quantum computers will be enhanced.
Comments: Quantum computing, with qubits as the basic computing unit, makes full use of the peculiar properties of quantum mechanics and is faster and more efficient than traditional computing. The 2024 government work report proposes to "actively cultivate emerging industries and future industries, formulate future industrial development plans, and open up new tracks for quantum technology". The financial industry is one of the hottest application fields of quantum computing at home and abroad. In addition, quantum computing has also proven to have potential in industries such as biopharmaceuticals, energy and chemical industries, weather forecasting, and information security. The authoritative report predicts that from 2028 to 2035, the quantum computing market will continue to expand rapidly, and the market size is expected to reach $811.7 billion, and quantum computing will also enter a critical stage of full maturity and commercialization.
6. Hydrogen energy Recently, the International Energy Agency (IEA) released the "Global Hydrogen Review 2024". According to the report, there are currently 20GW of FID electrolyser capacity globally, with 6.5GW of FID (Final Investment Decision reached) projects growing in the past 12 months. From the perspective of production capacity, in the past 12 months, China's electrolyzer production capacity in the FID process accounted for more than 40% of the world's total, and China's leading position in the global market has been continuously strengthened.
Comments: As the global demand for clean energy continues to increase, the market demand for hydrogen energy, as a clean and efficient form of energy, will continue to grow, according to the analysis. A joint report by the International Hydrogen Council and management consulting firm McKinsey predicts that global hydrogen direct investment is expected to reach US$320 billion by 2030, demonstrating the huge market potential of the hydrogen industry. As a disruptive technology that integrates multiple fields such as energy, materials, automobiles, and equipment manufacturing, hydrogen fuel cell technology has high-tech content and strong driving ability. This technology can not only promote the transformation and upgrading of traditional industries, but also give birth to new industrial chains and inject new momentum into high-quality economic development. The use cases of hydrogen energy continue to expand, covering many sectors such as transportation, industry, buildings, and power.
Today's news preview
China's social financing scale increased, new RMB loans, M0, M1, M2.
The Federal Reserve publishes the minutes of its monetary policy meeting.
Atlanta Fed President Bostic, Dallas Fed President Logan, Chicago Fed President Goolsby, Richmond Fed President Barkin, Boston Fed President Collins, and San Francisco Fed President Daly spoke.
United States EIA crude oil inventories moved last week.
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