Morning News

Source: Wall Street News

## Market Overview

Bessent's remarks about a possible 50 - basis - point rate cut in September boosted U.S. stocks and bonds. Funds did not pile into large - cap tech stocks; the Russell Small - Cap Index outperformed the broader market by a wide margin, and Bitcoin hit a record high.

The Dow Jones Industrial Average rose by more than 460 points. The "Magnificent Seven" tech stocks as a whole lagged behind the broader market, with only Apple and Amazon closing higher. The popular stock Coreweave plummeted by 20%. The "new crypto star" Bullish surged by nearly 200% at one point on its first day of listing. Chinese concept stocks rose by more than 2%, outperforming the broader market. Tencent gained 7.4% and Alibaba rose 3.6%.

U.S. Treasury yields generally fell, with the 10 - year yield dropping by 5.6 basis points. The U.S. dollar fell for two consecutive days. Both Ethereum and Bitcoin rose by more than 2%. Gold edged up slightly.

Crude oil prices fell to their lowest level since early June due to an unexpected increase in crude oil inventories, a downward revision in demand expectations, and market expectations for a meeting between Trump and Putin. Most domestic futures night sessions closed down, with coking coal falling by more than 4.5% and coke dropping by more than 2.7%.

During the Asian session, A - shares rose sharply with increased volume. The Shanghai Composite Index broke through the "924" high, the total market turnover exceeded 2 trillion yuan. AI hardware and pharmaceutical sectors surged. The Hang Seng Tech Index recorded its largest gain in three months, and tech stocks generally rose.

## Key News

China's new social financing in July was 1.16 trillion yuan, RMB loans decreased by 50 billion yuan, and the M2 - M1 scissors gap narrowed. A central bank - affiliated media stated that it is not appropriate to over - hype the fluctuations in monthly credit increments.

Two government departments are seeking public opinions: Assisted driving cannot be regarded as autonomous driving, and OTA upgrades are not allowed without filing.

Tencent's Q2 net profit increased by 17% year - on - year, exceeding expectations, with revenue growing by 15%. AI - driven marketing service revenue rose by 20%. In the conference call, it was stated that Tencent has sufficient chips for AI training and model upgrades, and there are multiple options for AI inference chips.

Trump said he might appoint the next Federal Reserve Chair a little earlier, narrowing the candidates down to three or four. Bessent said that U.S. interest rates should be 150 to 175 basis points lower than the current level, and there is a high possibility of a 50 - basis - point rate cut in September. The candidates for the Federal Reserve Chair have been "cast a wide net" to 11 people. Brad, a potential candidate for the Federal Reserve Chair, said that if elected, he will seek to break "groupthink".

NVIDIA's agreement to hand over 15% of its chip revenue has become a "template". The U.S. Treasury Secretary said it may be extended to other industries.

Before the "Trump - Putin meeting", the U.S. Treasury Secretary put pressure on Russia, threatening to increase sanctions against Russia. Trump said that if things go smoothly, there will be a trilateral meeting between the U.S., Russia and Ukraine.

It is reported that Apple's AI strategy will focus on robots, realistic Siri and home security.

The launch of GPT - 5 was criticized by users as "cold and alienated", and OpenAI urgently brought GPT - 4o back.

Another hot "crypto stock" went public in an IPO, supported by many tycoons. Bullish, the parent company of CoinDesk, saw its U.S. stock debut double in intraday trading.

## Market Closing Quotes

European and American stock markets: The S&P 500 rose by 0.32% to close at 6466.58 points. The Dow Jones Industrial Average increased by 1.04% to 44922.27 points. The Nasdaq Composite Index gained 0.14% to 21713.14 points. Europe's STOXX 600 Index closed up by 0.54% at 550.85 points.

A - shares: The Shanghai Composite Index rose by 0.48% to close at 3683.46 points; the Shenzhen Component Index increased by 1.76% to 11551.36 points; the ChiNext Index gained 3.62% to 2496.5 points.

Bond market: The yield on the 10 - year U.S. benchmark Treasury note fell by 5.62 basis points to 4.2326%. The yield on the 2 - year U.S. Treasury note dropped by 5.63 basis points to 3.6745%.

Commodities: WTI September crude oil futures closed down by 0.82% at $62.65 per barrel. Brent October crude oil futures fell by 0.74% to $65.63 per barrel. COMEX gold futures rose by 0.24% to $3407.10 per ounce.

## Details of Key News

### Global Highlights

China's new social financing in July was 1.16 trillion yuan, with RMB loans decreasing by 50 billion yuan, and the M2-M1 scissor gap narrowing. From January to July, China's cumulative social financing scale increment was 23.99 trillion yuan, 5.12 trillion yuan more than the same period last year, with new social financing in July reaching 1.16 trillion yuan. In July, RMB loans decreased by 50 billion yuan, new RMB deposits were 500 billion yuan, and household deposits fell by 1.11 trillion yuan. The M2-M1 scissor gap stood at 3.2 percentage points, narrowing by 0.5 percentage points from the previous month.

Central bank - affiliated media: It is inappropriate to over - hype fluctuations in monthly credit increments. *Financial News*, a media outlet supervised by the People's Bank of China, stated that monthly financial data is often regarded as a window to observe the phased operation of the economy and finance. However, as China's economy enters a stage of high - quality development, the monthly loan figures are usually insufficient to accurately reflect the degree of economic activity, nor can they fully reflect the strength of financial support for the real economy. There is no need to pay excessive attention to single - month data when analyzing the economic and financial situation, let alone over - hype fluctuations in the monthly credit increment figures.

Two departments seek opinions: Assisted driving cannot be regarded as autonomous driving, and OTA upgrades are not allowed without filing. The two departments pointed out that enterprises should display safety tips and user instructions for combined driving assistance systems in prominent positions of vehicle Apps, in - vehicle information interaction systems, and user manuals, so as to facilitate consumers' reading, understanding, and operation, and prevent drivers from using combined driving assistance functions as autonomous driving functions. Enterprises must strictly implement the classified management requirements for online software upgrades (OTA upgrades). They are not allowed to carry out OTA upgrade activities without filing, nor push software versions that have not undergone sufficient testing and verification to users.

Tencent's Q2 net profit increased by 17% year - on - year, exceeding expectations, with revenue growing by 15%, and AI - driven marketing service revenue rising by 20%. In the conference call, it was stated that Tencent has sufficient chips for AI training and model upgrades, and there are multiple options for AI inference chips.

Tencent's Q2 revenue increased by 15% year - on - year to 184.5 billion yuan, exceeding expectations, and its net profit rose by 17% year - on - year. The game business recovered strongly, with game revenue in the domestic market increasing by 17% year - on - year. In the quarter, Tencent's R&D investment grew by 17% year - on - year; capital expenditure surged to 19.1 billion yuan, a year - on - year increase of 119%, far exceeding the 8.7 billion yuan in the same period last year.

Management stated in the conference call that AI technology has become the main driving force, promoting a 20% increase in advertising revenue and being integrated into products such as WeChat. The company is actively deploying in AI, with capital expenditure doubling for capacity building. However, chip imports and purchases are still under careful consideration, and it will not over - rely on fluctuations in GPU supply. AI costs are controllable, the game business has recovered strongly, and enterprise services are growing at an accelerated pace.

Trump said he might appoint the next Federal Reserve Chair a little earlier, narrowing the candidates down to three or four. Trump said on Wednesday, "I will announce the candidate for the new Federal Reserve Chair at some point in the next period - I think it will be announced a little earlier. I have narrowed it down to three or four names. These candidates are all excellent." However, on the same day, U.S. Treasury Secretary Bessent said in an interview with Bloomberg TV that the plan is to consider up to 11 candidates.

Bessent: U.S. interest rates should be 150 to 175 basis points lower than the current level, and the candidates for the Federal Reserve Chair are "cast a wide net" to 11 people. Bessent said that if the data is accurate, the Federal Reserve may start cutting interest rates earlier, and there is a high possibility of a 50 - basis - point rate cut in September. Regarding the candidates for the Federal Reserve, Bessent said that Trump has a very open attitude when selecting the Federal Reserve Chair. There are 10 or 11 people under consideration, and Trump considered Yellen and John Taylor last time.

Brad, a potential candidate for the Federal Reserve Chair: If elected, he will seek to break "groupthink". Brad believes that the U.S. Capitol Hill will not consider revising the Federal Reserve Act, and the U.S. President can freely express views on FOMC monetary policy. Brad is one of about ten candidates being considered by the Trump administration for the next Federal Reserve Chair and is also the former boss of Waller, another popular candidate for the Federal Reserve Chair.

NVIDIA's agreement to hand over 15% of its chip revenue has become a "template", and the U.S. Treasury Secretary said it may be extended to other industries. Bessent said on Wednesday that allowing NVIDIA to sell H20 chips in China will make it a "leader in Chinese technology". The White House said on Tuesday that the chip revenue sharing agreement currently only involves NVIDIA and AMD, and may be expanded to other companies in the future.

U.S. Treasury Secretary put pressure before the "Trump - Putin meeting", threatening to increase sanctions against Russia. Trump said that if things go smoothly, there will be a trilateral meeting between the U.S., Russia and Ukraine.

Bessent urged Europe to join the secondary sanctions against Russia, saying "either act or shut up", and threatened that if the "Trump - Putin meeting" does not go smoothly, sanctions against Russia or secondary tariffs may be further increased. Brent crude oil turned up in the short term.

After a video conference with European leaders and Zelensky, Trump said that if the "Trump - Putin meeting" goes well, a second meeting will be arranged immediately with Zelensky's participation, and Russia will face consequences if it does not stop the conflict. The decline in crude oil expanded to nearly 2%.

After the meeting, Macron said that the trilateral talks may be held in a neutral European country. Trump clearly stated that he hopes to reach a ceasefire between Russia and Ukraine during the "Trump - Putin meeting"; Zelensky said that Putin is "bluffing" and that in order to seek peace, sanctions pressure from not only the United States but also Europe is needed; the Finnish President said that Trump agreed that the "Trump - Putin meeting" will not discuss territorial concessions.

Report: Apple's AI strategy will focus on robots, realistic Siri and home security. Apple is planning an ambitious plan to launch a new lineup of AI devices, including desktop robots, smart speakers with displays, and home security cameras. Among them, the desktop robot is the core of its AI strategy, scheduled to be launched in 2027. It will be equipped with a realistic Siri voice assistant and can participate in multi - person conversations. The smart speaker with a display is planned to be launched next year.

The launch of GPT - 5 was criticized by users as "cold and alienated", and OpenAI urgently brought GPT - 4o back. After the release of GPT - 5, OpenAI re - launched GPT - 4o due to strong user dissatisfaction. Although OpenAI said that GPT - 5 is more powerful in performance, many users think it is cold, alienated and lacks a "sense of companionship". CEO Altman admitted that he underestimated users' emotional dependence on GPT - 4o and promised to improve the GPT - 5 experience.

Another hot "crypto stock" went public in an IPO, supported by many tycoons. Bullish, the parent company of CoinDesk, saw its U.S. stock debut double in intraday trading. Bullish's offering price was more than 10% higher than the revised guidance range this week. The IPO raised 1.1 billion U.S. dollars, and the opening price was 143% higher than the offering price. The intraday gain once exceeded 200%, and it closed up nearly 84%. Previously, institutions such as BlackRock had a total subscription intention of 200 million U.S. dollars.

Bridgewater increased its holdings of NVIDIA, Microsoft, Google, and Meta in the second quarter, and liquidated stocks such as Alibaba, Pinduoduo, Baidu, JD.com, and Chevron.

Despite Trump's criticism, Goldman Sachs responded: Tariffs will start to hit consumers' wallets. Goldman Sachs economist David Mericle insisted on Wednesday that if recent tariffs, such as those imposed in April, follow the same pattern as the earliest tariffs seen in February, then by autumn, consumers are expected to bear about two - thirds of the cost. Nevertheless, Goldman Sachs expects that Trump is likely to still get some of the interest rate cuts he has been asking the Federal Reserve to make.

### Domestic Macroeconomics

Ministry of Finance: The personal consumer loan interest subsidy policy is the first implementation at the central level and can be called another "national subsidy" in this field. A simple calculation shows that if the subsidy ratio is 1%, it means that 1 yuan of subsidy funds may drive 100 yuan of loan funds to be used for residents' consumption or the supply of services in the consumer field. The "double subsidy" policy is expected to form a combination with the ongoing consumer goods trade - in subsidies and other policies, so that the people can get more benefits in the process of consumption.

The significance of "personal consumer loan interest subsidy" to the market: Boosting the "inflation trade", the stock market continues to suppress the bond market. Zheshang Securities believes that the probability of interest rate cuts within the year has decreased. In the context of the continuous advancement of the "anti - involution" policy, inflation expectations are阶段性强化 through the path of supply contraction → price signals → self - reinforcement of expectations. It is expected that the next interest rate cut window will be postponed to the first quarter of 2026, and there may be a "defensive interest rate cut" within the year. The window for long positions in the bond market may be further postponed.

Rainstorm disturbance to supply + high temperature boosting demand = China's thermal coal price hits a five - month high. The benchmark spot coal price in Qinhuangdao rose to 678 yuan per ton this week, the highest since March 17, and has rebounded 11% from the four - year low hit in June. Morgan Stanley expects that this round of rising trend may be relatively short - lived, and coal prices may start to pull back in late August.

A new height of A - shares' "outperformance" market. Minsheng Macro Tao Chuan team believes that after the Shanghai Composite Index broke through last year's high, A - shares have shown three new realms of "outperformance": First, the cost - performance ratio outperforms history, showing the characteristics of a mature market with low volatility and low retracement; second, it has outperformed economic growth for four consecutive quarters, the first time since the second half of 2021; third, it is expected to outperform U.S. stocks, implementing the goal of enhancing the attractiveness of the capital market. There are two possible paths for the future market to continue: taking the "slow bull" route of technological innovation through AI new productive forces, or the cycle recovery route after inflation picks up.

### Domestic Companies

Wall Street comments on Moutai's second quarterly report: In line with the target, high - end wine remains stable, and weak demand and inventory pressure have been reflected in the valuation. Investment banks generally believe that Moutai's current valuation has digested major risks such as the current macroeconomic weakness, sluggish consumer sentiment, and anti - luxury consumption policies. At the same time, Moutai's current forward price - to - earnings ratio (about 18 - 19 times) is close to the valuation low at the end of 2018. This means that after the pessimistic expectations are fully digested by the market, any sign of demand recovery (such as the Mid - Autumn Festival peak season or fiscal stimulus policies) may trigger a valuation repair.

Moutai's dividend yield is 3.9%, exceeding Agricultural Bank of China for the first time in history. Kweichow Moutai's dividend yield has reached 3.9%, historically exceeding Agricultural Bank of China for the first time, whose dividend yield is 3.7%. This liquor giant is attracting income - oriented investors through stable dividends. Market trends show that investors are looking beyond traditional bank stocks to find higher dividend targets in sectors such as consumption. The dividends of 65 non - bank companies in the CSI 300 have exceeded that of Agricultural Bank of China.

### Overseas Macroeconomics

The new generation of U.S. stock retail investors is "different": They have no memory of the bear market, only the sweetness of "bottom fishing" and the envy of "getting rich overnight". The new generation of U.S. stock retail investors have shown investment behavior of "buying on dips", actively bottom fishing during market corrections and pushing the stock market to new highs repeatedly. This phenomenon stems from a fundamental change in the composition of investors: young investors lack the memory of the bear market, grew up in a bull market environment with ultra - low interest rates, and their early investment success makes them more willing to take risks. The trend of transaction entertainment and technological progress have further added fuel to the fire.

A rare "firmly bearish" major bank, UBS: Bearish on the U.S. economy, bearish on the U.S. dollar, bearish on U.S. stocks. UBS predicts that U.S. GDP growth will slow sharply from 2.0% in the second quarter to 0.9% in the fourth quarter, far below market expectations. Regarding the U.S. dollar, it maintains a long - term bearish view, pointing out that the U.S. net investment position has reached - 88% of GDP, creating conditions for a correction before the start of a new round of U.S. dollar bull market. Regarding U.S. stocks, it warns of overvaluation, the risk of concentration in technology stocks, and the underestimation of the impact of tariffs. It sets the year - end target of the MSCI World Index at 960 points and warns of significant downside risks in the near term.

Some senior officials of the Bank of Japan call for abandoning the vague inflation indicator, which may clear the way for a rate hike in October. Japan's CPI has exceeded the central bank's 2% target for more than three consecutive years. Against this background, there are differences within the Bank of Japan. Some board members advocate abandoning the "potential inflation" indicator, which lacks a clear statistical caliber, and turning to pay more attention to overall inflation and inflation expectations. Analysts said that some committee members publicly called for adjusting the dovish communication method, and this change may clear the way for the Bank of Japan's rate hike in October this year.

Japanese government bonds are once again unpopular, with the 10 - year bond "unwanted" and the demand for the 5 - year bond hitting the lowest level since 2020. Fears of a rate hike and insufficient market liquidity have heated up again. The demand for Japan's 5 - year government bond auction hit the lowest level since 2020, with a bid - to - cover ratio of only 2.96 times. There were no transactions in the 10 - year government bond throughout Tuesday, the first time in more than two years.

Ethereum's "first treasury" adds another "20 billion U.S. dollars in bullets", and Ethereum breaks through 4,500 U.S. dollars. Bitmine announced on Tuesday that it plans to issue shares worth up to 20 billion U.S. dollars through its "at - the - market" equity program to raise funds for buying more Ethereum. At the same time, the inflow of funds into spot Ethereum ETFs is accelerating, jointly pushing the world's second - largest cryptocurrency to new heights.

IEA monthly report: Global oil supply may be seriously surplus next year,刷新历史纪录。The IEA report shows that global oil demand growth is weak, expected to increase by only 680,000 barrels per day this year, the weakest increase since 2019. At the same time, supply has surged. The imbalance between supply and demand will lead to a record supply surplus next year, and the speed of inventory accumulation will exceed the average increase during the 2020 pandemic.

Overseas Companies

In the first conference call after its IPO, Circle focused on the "profit model": there are two ways to make money, with the goal of "winner-takes-all". Circle mainly profits from the interest on reserves, and "monetizing related transaction processes and infrastructure" is expected to become another important source of income; the company's advantages lie in its highly scalable model and inherent operating leverage; the Arc chain is designed specifically for the needs of major financial institutions, focusing on scenarios such as payments, foreign exchange, and capital markets, and its handling fees are expected to bring additional revenue.

CoreWeave conference call: Inference is the monetization of AI, and the usage of VFX cloud service products has increased by more than 4 times. CEO Michael Intrator revealed in the conference call that the company has signed expansion contracts with two ultra-large-scale cloud customers in the past 8 weeks, one of which has been reflected in the second-quarter results. The amount of remaining performance contracts has become a growth highlight, doubling from the beginning of the year to $30.1 billion. CFO Nitin Agrawal pointed out that it not only includes the $4 billion expansion agreement with OpenAI but also covers new customer orders from large enterprises to AI startups.

How to understand GPT-5? Its commercial value is greater than its technical value, and OpenAI will soon become the "most valuable private company in the world". JPMorgan Chase stated that OpenAI has shown its intention of business transformation through the release of GPT-5. The technical improvement is only about 10%, but the business strategy is of great significance. The company has adopted strategies such as simplifying product lines, covering all users, and aggressive pricing. Key business indicators have grown strongly: annual recurring revenue has exceeded $13 billion, and weekly active users have reached 700 million. The valuation is expected to soar from $300 billion to $500 billion.

The Trump family has raked in $4.5 billion, and the mysterious cryptocurrency platform behind it has been exposed. Is the manipulator Binance's Zhao Changpeng? The Trump family's cryptocurrency business has amassed $4.5 billion in wealth, and the explosive growth of its core engine - the stablecoin USD1 - is reported to be driven by PancakeSwap, a platform secretly controlled by Binance. Binance not only secretly provides trading infrastructure but also holds a huge amount of USD1 and drives traffic to it. At the same time, Binance founder Zhao Changpeng, who is in prison for money laundering, is seeking a pardon from the White House through the Trump family's connections.

Industries/Concepts

1. AIDC Infrastructure: The global AI industry is ushering in a technological singularity, and data centers are important infrastructure for AI development. Global CSPs (cloud service providers) are increasing their investment in AIDC construction. It is expected that the total installed capacity of global data centers will exceed 100GW by 2025. Many links will see growth. In the power distribution and power supply link, it is developing from UPS to DC and 800V high-voltage DC. The power density and value of server power supplies are both increasing. BBU and supercapacitors are gradually becoming standard configurations. SST, as the future energy supply hub, is expected to be quickly launched into the market.

2. Robotics: Policies on robotics + intelligent elderly care are frequently introduced to help the industry take root. In 2025, the Ministry of Industry and Information Technology issued the "Notice on Carrying out Pilot Work on Pairing Research and Development and Scene Application of Intelligent Elderly Care Service Robots" to promote the scenario-based application verification of elderly care robots.

3. Spandex: A research report by TF Securities pointed out that China's spandex supply is highly concentrated. At present, the industry's average gross profit is about 6,000 yuan per ton in loss, and the cumulative loss period has lasted for 3.5 years. The subsequent new capacity may be delayed or reduced. Under the background of "anti-involution", focus on listed companies on the left side of the cost curve.

4. Hollow-core Optical Fiber: Hollow-core optical fiber uses air as the transmission medium, with two main characteristics of lower delay and lower loss. It is the main variety for future AI data center interconnection. At present, hollow-core optical fiber is still in the early stage of commercialization. At present, China Mobile's first hollow-core optical fiber has been officially commercialized, and operators may lead the domestic demand rhythm.

Preview of Today's Key News

The State Council Information Office will hold a press conference to introduce the development achievements of the digital China construction during the "14th Five-Year Plan" period.

US July PPI.

US initial jobless claims for last week.

Eurozone and UK GDP.

France's July CPI.

Speech by Richmond Fed President Barkin.

NetEase and JD.com release financial reports.

Berkshire needs to submit its US stock holdings report as of June 30 by August 14.

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