Morning News

Source: Wall Street News

## Market Overview

U.S. Q2 GDP data was revised upward, coupled with better-than-expected employment data. Investors' optimism overshadowed concerns about the uncertainty of the interest rate cut path. The S&P 500 hit a new high, breaking through the 6,500-point mark. Tech stocks led the gains, with Snowflake surging 20%, though NVIDIA fell 0.8% after its earnings report. Driven by record speculative short positions, the VIX (Volatility Index) dropped to near its low level for the year.

U.S. Treasuries saw mixed performance, with longer-dated bonds outperforming shorter-dated ones. The 2-year yield rose by 1.6 basis points.

The U.S. Dollar Index fell for the third consecutive session. Offshore RMB hit a new annual high, rising to 7.1188.

Gold rose for the third straight day, breaking through $3,400. Silver gained 1.2%. Crude oil moved higher, with U.S. oil once rising more than 2% from its intraday low.

During the Asian trading session, A-shares staged a strong rebound in the afternoon. The STAR 50 surged over 7%, Cambricon topped the "stock king" list, SMIC hit a new high. Hong Kong stocks saw Meituan drop over 12%, and southbound funds recorded a record net outflow.

The Central Committee of the Communist Party of China and the State Council: Develop clustered and networked modern urban agglomerations and metropolitan areas, and continue to promote the renovation of old urban residential communities.

New moves by Central Huijin: Increased holdings of liquor and chemical ETFs in the first half of the year.

26 foreign heads of state and government, including Putin and Kim Jong-un, will attend the commemorative activities for the 80th anniversary of the victory in the War of Resistance.

The U.S. Q2 real GDP annualized quarter-on-quarter was revised up to 3.3%, boosted by business investment, with the PCE price index at 2.5%. The number of initial jobless claims in the U.S. fell slightly to 229,000 last week, and continuing claims dropped to 1,954,000, both below expectations.

Catering to Trump's cryptocurrency strategy, the U.S. Department of Commerce piloted blockchain for GDP release.

Waller, a leading candidate for Fed Chair: Supports a 25-basis-point rate cut in September, with further cuts continuing in the next three to six months.

Fed Governor Cook sued over removal, suggesting that the mortgage issue stemmed from paperwork errors and warning that removal would put the U.S. economy at risk.

The EU pushes for the implementation of the EU-U.S. agreement, with legislative proposals to eliminate some tariffs on the U.S. and reduce automobile tariffs to 15%. Japan's Minister of Economic Revitalization canceled his U.S. trip for tariff consultations.

Buffett makes a move: Berkshire increases its stake in Japan's Mitsubishi to over 10%.

Cambricon issues a risk warning: Expects full-year revenue of 5-7 billion yuan, and clearly has no plans to release new products.

SMIC's first-half revenue increased 22% year-on-year, with a significant improvement in gross profit driving net profit up 35.6%. The full-year target is to exceed the average of comparable peers.

Huahong Semiconductor's first-half revenue increased 19.09% year-on-year, but high R&D investment and new project ramp-up costs led to a 71.95% drop in net profit.

China Micro Semiconductor's first-half revenue surged 43.9% year-on-year, net profit increased 36.6%, and etching equipment sales rose 40.1%.

North Huachuang's first-half revenue and net profit both achieved double-digit year-on-year growth, while the net cash outflow from operating activities expanded by approximately 9 times year-on-year.

Changxin Bochuang's first-half revenue soared 59.5% year-on-year, and its net profit attributable to shareholders surged over 11 times, driven by the booming demand for AI data centers.

Dawning Information Industry's first-half net profit increased 29.39%, with the gross profit rate of high-end computer products reaching 15.33%.

ZTE's first-half revenue increased 14.51% year-on-year, while net profit decreased 11.77% year-on-year.

Dell's revenue and profits exceeded expectations, but its Q3 profit guidance fell short, with AI server orders dropping sharply quarter-on-quarter. The stock fell over 4.6% after hours.

## Market Closing Quotes

European and American stock markets: The S&P 500 rose 0.32% to 6,501.86 points, hitting a new closing high. The Dow Jones Industrial Average rose 0.16% to 45,636.90 points. The Nasdaq Composite rose 0.53% to 21,705.158 points. Europe's STOXX 600 index closed down 0.20% at 553.67 points.

A-shares: The Shanghai Composite Index rose 1.14% to close at 3,843.60 points; the Shenzhen Component Index rose 2.25% to close at 12,571.37 points; the ChiNext Index rose 3.82% to close at 2,827.17 points.

Bond market: The U.S. 10-year Treasury yield fell 2.52 basis points to 4.2091%. The 2-year U.S. Treasury yield rose 2.66 basis points to 3.6351%.

Commodities: WTI October crude oil futures closed up 0.70% at $64.60 per barrel. Brent October crude oil futures closed up 0.84% at $68.62 per barrel. COMEX gold futures rose 0.83% to $3,477.20 per ounce.

# Details of Key News

## Global Highlights

### The CPC Central Committee and The State Council: Develop clustered and networked modern urban agglomerations and metropolitan areas, and continue to promote the renovation of old urban residential communities  

The opinions stated that efforts should be made to steadily and orderly advance the integrated development of urban agglomerations and the同城化 (integrated urban-rural) development of metropolitan areas. It is necessary to develop clustered and networked modern urban agglomerations and metropolitan areas, and build a rationally distributed modern urban system. Support will be given to the Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area urban agglomerations to develop into world-class urban agglomerations. Control the scale of megacities, reasonably and orderly relocate non-core functions, and build a core engine for high-quality development. Develop first-launch economy, silver economy, ice-snow economy, and low-altitude economy, and foster new consumption scenarios.

### New Moves by Central Huijin: Increased Holdings of Liquor and Chemical ETFs in H1  

In the first half of this year, Central Huijin increased its holdings of ETFs in sectors such as liquor and chemicals through a single asset management plan. According to the previously released Q2 quarterly reports of public funds, in Q2 this year, Central Huijin made large purchases of broad-based ETFs. It spent approximately 150 billion yuan on only 4 CSI 300 ETFs and ChinaAMC Shanghai-Shenzhen 50 ETF, becoming a mainstay in stabilizing the market.

### 26 Foreign Heads of State and Government Leaders Including Putin and Kim Jong-un to Attend Commemoration of the 80th Anniversary of the Victory in the War of Resistance  

According to CCTV News, 26 foreign heads of state and government leaders, including Putin and Kim Jong-un, will attend the commemorative activities for the 80th anniversary of the victory of the Chinese People's War of Resistance Against Japanese Aggression and the World Anti-Fascist War. At the invitation of the Chinese government, speakers of parliaments, deputy prime ministers, high-level representatives from some countries, heads of international organizations, and former politicians will attend the commemorative activities.

### U.S. Q2 Real GDP Annualized QoQ Revised Up to 3.3%, Boosted by Business Investment; PCE Price Index at 2.5%  

The U.S. real GDP grew by 3.3% in Q2, higher than the previously reported 3.0%. The key driver of the revision was business investment, whose growth rate was significantly revised up from the initial 1.9% to 5.7%, reflecting the increase in investment in software and transportation equipment. Net exports contributed nearly 5 percentage points to GDP, reaching the highest level on record.

### U.S. Initial Jobless Claims Fell Slightly to 229,000 Last Week, Continuing Claims Dropped to 1.954 Million, Both Below Expectations  

### U.S. Department of Commerce Pilots Blockchain for GDP Release to Cater to Trump's Cryptocurrency Strategy  

The U.S. government began releasing U.S. Gross Domestic Product (GDP) data on a public blockchain on Thursday, marking the latest support from the Trump administration for the crypto industry. The Trump administration plans to seek to expand the coverage of this program in the future.

### Waller, a Leading Candidate for Fed Chair: Supports 25-Basis-Point Rate Cut in September, with Further Cuts in Next 3-6 Months  

Fed Governor Waller, who supported a 25-basis-point rate cut at the July meeting, stated that there is no need for a sharp rate cut in September at present. However, his view may change if the non-farm payrolls report next week "shows significant economic weakness and inflation remains well-controlled," and the pace of rate cuts will depend on upcoming data.

### Fed Governor Cook Sues Over Removal, Suggesting Mortgage Issues Stemmed from Paperwork Errors and Warning Removal Would Put U.S. Economy at Risk  

Fed Governor Lisa Cook sued Trump over his attempt to remove her from the Fed's board of governors. Cook's lawsuit also named Fed Chair Powell and the Fed's board of directors as defendants, asking the court to block them from implementing Trump's removal order. Cook hopes that a U.S. judge will issue a temporary injunction to prevent Trump and other defendants from taking action during the trial. Cook's lawyers put forward a possible defense for the first time in response to the charges against her. A U.S. judge scheduled the first hearing on Trump's lawsuit to remove Cook at 10 a.m. Eastern Time on Friday. Judge Jia Cobb was appointed by former U.S. President Biden in 2021.

### EU Pushes for Implementation of EU-U.S. Agreement, Legislative Proposals to Eliminate Some Tariffs on U.S. and Reduce Auto Tariffs to 15%  

The European Commission has put forward two legislative proposals, which will eliminate some tariffs on U.S. industrial products, grant preferential market access to some seafood and non-sensitive agricultural products, and extend duty-free treatment for lobsters. According to the EU-U.S. trade agreement framework released last week, the U.S. will only reduce auto tariffs to 15% when the EU "formally submits the required legislation" to fulfill its commitment to reducing tariffs on U.S. goods.

### Japan's Minister of Economic Revitalization Cancels U.S. Trip for Tariff Consultations  

According to CCTV News, this is because the Japanese side identified issues that need confirmation during tariff consultations with the U.S. side. It is currently uncertain whether Ryo Masazawa will travel to the U.S. again.

### Wall Street's Comments on NVIDIA's Earnings: Ignore "Noise" in Chinese Market, Fundamentals Remain Strong; Bullish on Huge Growth Potential of Blackwell and Rubin; Long-Term Outlook Overshadows Short-Term Volatility, Analysts Collectively Raise NVIDIA's Target Price  

Major investment banks unanimously believe that NVIDIA has a solid position in the best investment opportunities for AI infrastructure construction, with a clear long-term growth outlook. Investors should focus on the company's core growth logic rather than short-term uncertainties. All banks are bullish on the strong performance of NVIDIA's Blackwell product line.  

Analysts have focused on NVIDIA's long-term prospects, especially the capacity expansion of Blackwell AI chips and the continued strong order demand. At least 10 institutions raised their 12-month target prices for NVIDIA after the company released its earnings on Wednesday, with the average target price increased by 3% to $202.60.  

Bank of America stated that the Blackwell product line has reached full-capacity production, producing approximately 1,000 racks per week, and production is expected to further accelerate in Q3 of the fiscal year. As system-level racks gradually mature and achieve scale, the gross profit margin is expected to rebound to the previous mid-70% level more quickly.  

However, Goldman Sachs believes that the market has largely priced in the growth potential brought by NVIDIA's new-generation Blackwell architecture chips. The Q2 results and guidance are stable and basically in line with expectations but still fail to meet high market expectations, which may cause NVIDIA's stock price to face downward pressure in the short term.

### Goldman Sachs Predicts Apple's iPhone 17 Launch: Bullish, Expected to Drive Revenue Growth  

Goldman Sachs believes that the iPhone 17 series will effectively stimulate user upgrades through product line adjustments, performance improvements, and a "hidden" price increase strategy. It is expected that Apple's iPhone business revenue will increase by 5% year-on-year in fiscal 2025 and further accelerate to a 7% year-on-year growth in fiscal 2026.

### Buffett Takes Action: Berkshire Increases Stake in Japan's Mitsubishi to Over 10%  

Buffett's increase in holdings sends a clear signal to the market of his continued optimism about Japanese trading companies. A subsidiary of Berkshire Hathaway has increased its voting stake in the company from 9.74% in March to 10.23%. Meanwhile, Mitsui & Co. also confirmed that Buffett has increased his stake in the company.

### Cambricon Issues Risk Warning: Expects Full-Year Revenue of 5-7 Billion Yuan, Clearly Has No New Product Launch Plan  

Cambricon released a risk warning announcement, indicating that there is a risk that its stock price is divorced from current fundamentals, and investors may face significant risks when participating in transactions. At the same time, Cambricon stated that the company expects its 2025 revenue to reach 5-7 billion yuan, but the management clearly stated that there are no new product launch plans and the company faces risks related to supply chain stability.

### Alibaba Earnings Preview: Takeaway Price War Pressures Profits; Cloud Business and AI Are Bright Spots  

Analysts expect Alibaba's total revenue in Q2 to increase by 5% year-on-year, and the cloud business is expected to achieve growth of over 20%. However, affected by Taobao Flash Sale's 50 billion yuan subsidy plan, Alibaba's overall profits will face significant pressure. Key focus areas include the growth momentum of the cloud business and AI, the impact of the takeaway price war on profits, the effect of new business integration, and whether AIDC can turn losses into profits as scheduled.

### SMIC's H1 Revenue Up 22% YoY, Significant Gross Profit Improvement Drives 35.6% Net Profit Growth; Full-Year Target to Exceed Average of Comparable Peers  

SMIC's H1 revenue increased by 22% year-on-year to $4.456 billion, with gross profit margin rising to 21.4% and net profit margin reaching 10.5%. Wafer foundry business revenue was $4.229 billion, up 24.6% year-on-year. The company expects that the situation of channels stepping up stockpiling and inventory replenishment will continue until Q3. Due to the overall supply shortage of the company's production capacity, the slowdown in volume will not have a significant impact on capacity utilization.

### Huahong Semiconductor's H1 Revenue Up 19.09% YoY; High R&D Investment and New Project Ramp-Up Costs Lead to 71.95% Drop in Net Profit  

Huahong Semiconductor's H1 operating income was 8.018 billion yuan, up 19.09% year-on-year, but net profit was only 74 million yuan, a significant year-on-year drop of 71.95%. This is mainly due to the capacity ramp-up costs in the initial stage of the Huahong Manufacturing project and the continuous increase in the company's overall R&D investment. The company's R&D expenses reached 939 million yuan, up 21.71% year-on-year, accounting for 11.99% of operating income.

### China Micro Semiconductor's H1 Revenue Surges 43.9% YoY, Net Profit Up 36.6%, Etching Equipment Sales Rise 40.1%  

China Micro Semiconductor's H1 gross profit margin was 39.85%, a slight decrease from 41.33% in the same period last year, mainly affected by product mix. R&D investment increased by 54% year-on-year, almost equivalent to the full-year level of last year. LPCVD equipment sales reached 199 million yuan, a year-on-year surge of 608.19%, indicating the rapid volume growth of the new product line. High-end products for the manufacturing of 5nm and below logic devices have achieved large-scale mass production, marking that the company's technical strength in the most cutting-edge process technology has been verified by the market.

### North Huachuang's H1 Revenue and Net Profit Achieve Double-Digit YoY Growth; Net Cash Outflow from Operating Activities Expands by Approximately 9 Times YoY  

In H1 2025, North Huachuang's revenue increased by 29.51% year-on-year, net profit attributable to shareholders increased by 14.97% year-on-year, and non-recurring net profit increased by 20.17% year-on-year. However, due to the surge in expenditures caused by order expansion and increased R&D investment, the net cash outflow from operating activities expanded by approximately 9 times year-on-year. The net cash flow from investing activities also dropped to -2.398 billion yuan due to merger and acquisition expenditures. North Huachuang acquired a 17.87% stake in CoreTech for 3.135 billion yuan in cash, becoming its largest shareholder and gaining control.

### Changxin Bochuang's H1 Revenue Soars 59.5% YoY, Net Profit Attributable to Shareholders Surges Over 11 Times; AI Data Center Demand Booms  

In H1, Changxin Bochuang's data communication business achieved explosive growth, with revenue of 980 million yuan, up 154.4% year-on-year, accounting for 81.4% of total revenue. The telecommunications business was under pressure, with revenue dropping by 39.7% year-on-year.

### Dawning Information Industry's H1 Net Profit Up 29.39%; Gross Profit Margin of High-End Computer Products Reaches 15.33%  

Dawning Information Industry's H1 operating income was 5.85 billion yuan, up 2.41% year-on-year; net profit attributable to shareholders was 729 million yuan, up 29.39% year-on-year; non-recurring net profit was 569 million yuan, up 55.20% year-on-year. The company's IT equipment business accounted for over 90% of total revenue.

### ZTE's H1 Revenue Up 14.51% YoY, Net Profit Down 11.77% YoY  

ZTE's H1 revenue was 71.553 billion yuan, up 14.51% year-on-year, and net profit was 5.058 billion yuan, down 11.77% year-on-year. The overall gross profit margin dropped to 32.45%, and the cash flow from operating activities fell sharply by 81.44% year-on-year. There was a divergence in business structure: the revenue of the government and enterprise business surged by 109.93% year-on-year, accounting for 26.9% of total revenue, mainly benefiting from the volume growth of server and storage products in the Internet, finance, government affairs and other fields. However, the gross profit margin of this business was only 8.27%, dragging down the overall profitability. The revenue of the operator network business dropped by 5.99% year-on-year, and the revenue of the consumer business increased by 7.59% year-on-year.

### Dell's Revenue and Profits Exceed Expectations; Q3 Profit Guidance Falls Short, Stock Drops Over 4.6% After Hours  

Dell Technologies released its Q2 earnings report for fiscal 2026 on Thursday. Both revenue and profits exceeded market expectations, and it raised its full-year revenue and profit guidance. However, due to the Q3 earnings per share guidance falling short of analysts' expectations, a sharp quarter-on-quarter drop in AI server orders, and infrastructure gross profit margin significantly lower than expected, the stock fell by over 4.6% after hours. Although Dell expects full-year AI server shipments to reach $20 billion, doubling year-on-year, the market still holds a cautious attitude towards its profitability due to high costs and high dependence on chip supply. The continued weakness of the PC business has also intensified market concerns.

## Domestic Macroeconomics

### Why Are Valuations of Chinese Financial Stocks Rising? Morgan Stanley: Entering "Low-Risk but Growth-Oriented" Model; Insurance Industry to Become Leader  

Morgan Stanley believes that after the cleanup of high-risk financial assets, China's financial industry is entering a relatively benign business cycle and a new era of "low-risk but growth-oriented". The new environment is conducive to the orderly resolution of financial risks and the stability of financial asset yields, supporting the rebound of revenue and profit growth. Driven by the stabilization of asset yields and the decline in risk premiums, the insurance industry has the potential to become the next major financial sector with a double-digit price-to-earnings ratio after Chinese securities firms.

### Zhou Xiaochuan: Examine Stablecoins from Multiple Dimensions  

Zhou Xiaochuan, former Governor of the People's Bank of China, published an article analyzing the operation mechanism and development prospects of stablecoins from six dimensions. The central bank dimension focuses on preventing the risks of excessive money supply and high leverage; the financial service model dimension examines the real demand for decentralization and tokenization; the payment system dimension compares technical paths and compliance challenges; the market transaction dimension focuses on preventing market manipulation; the micro-behavior dimension analyzes the motivations of various participants; the circulation path dimension examines the cycle mechanism from issuance to recovery. The article emphasizes the need to avoid a single perspective and control the development trend of the stablecoin market through comprehensive judgment from multiple dimensions.

## Domestic Companies

### Li Auto's Q2 Revenue Down 4.5% YoY, Net Profit Basically Flat YoY; Q3 Guidance Far Below Expectations  

Li Auto's stock rose by nearly 3%. The company expects vehicle deliveries in Q3 to be only 90,000-95,000 units, a year-on-year drop of 37.8%-41.1%. It expects total revenue in Q3 to plummet by 38.8%-42.1% year-on-year to 24.8-26.2 billion yuan.

### BYD's July Sales in Europe Surge Over 200%, Market Share Surpasses Tesla  

In July, new car registrations in Europe increased by 5.9% year-on-year to 1.09 million units, reaching the fastest growth rate since April last year. Among them, BYD was included in this monthly statistics for the first time, with sales surging by 225.3% in July and a market share of 1.2%. Tesla's sales plummeted by 40%, with its market share shrinking to 0.8%.

# Morgan Stanley: XPeng's New P7 Starts at RMB 219,800, More Aggressive Than Expected  

Morgan Stanley pointed out that the pricing of XPeng's new P7 is more aggressive than the market's previous expectation of RMB 230,000-250,000. This pricing strategy makes the new P7 RMB 26,000 cheaper than its competitor, the Xiaomi SU7 Pro. Morgan Stanley expects the new P7 to become a "dark horse" driving XPeng to achieve record sales. Supported by economies of scale, the new P7 is still expected to achieve a double-digit profit margin.  

# Wall Street's View on Meituan: Underperformance "Expected", But the Extent "Unexpected"; Management Emphasizes "Solid Core Areas"  

JPMorgan stated that Meituan's actual investment in food delivery and flash sales is RMB 10 billion more than predicted, indicating that irrational competition is much more intense than expected. The bank believes the core risk lies in Meituan's relatively limited financial resources compared with Alibaba, which may put it at a disadvantage in the prolonged "money-burning war". Nomura mentioned that Meituan's management attempted to convey to investors the signal that its "core position is solid", stating that it still maintains a 70% dominant position in the "core catering-related orders" segment, and the sustainability of Alibaba's market share growth is questionable.  

# Mixue Bingcheng's Q2: Steady Growth in China Business, Unsustainable Takeaway Subsidies, "Store Adjustments" in Vietnam and Indonesia  

The company's management stated that the high subsidies from takeaway platforms effectively boosted sales and store profits in the first half of the year, but such subsidies are "unsustainable" in the medium term, and the products and services themselves are the core of success. The management maintains the long-term gross profit margin target of approximately 30% and expects more cost-cutting benefits to be generated in the future as scale expands and efficiency improves.  

# "Benchmark City Commercial Bank" Bank of Ningbo Releases Interim Report, Achieving Rare Positive Growth in Non-Interest Income in the Industry  

Bank of Ningbo, a "benchmark city commercial bank", released its interim report, achieving positive growth in non-interest income—a rare feat in the industry.  

# CITIC Securities' H1 Net Profit Rises 29.80% YoY, Proposes Dividend of RMB 2.9 per 10 Shares  

CITIC Securities' net profit in the first half of the year increased by 29.80% year-on-year, and it proposed a dividend of RMB 2.9 per 10 shares.  

# China Taiping Releases Interim Results: Double-Digit Growth in Net Profit Attributable to Parent, Significant Effects of Endowment Insurance Transformation, 20.1% Growth in Group Dividends and Fund Dividend Income  

China Taiping released its interim results: the net profit attributable to the parent company achieved double-digit growth, the transformation of endowment insurance showed significant effects, and the group's dividend and fund dividend income increased by 20.1%.  

# Haier Smart Home's H1 Revenue Rises 10.2% YoY, Net Profit Up 15.6%, Strong Revenue Growth in Emerging Markets  

Haier Smart Home's revenue in the first half of the year increased by 10.2% year-on-year, net profit rose by 15.6%, and it achieved strong revenue growth in emerging markets.  

# Haitian Flavoring & Food Co., Ltd.'s H1 Revenue Rises 7.6% YoY, Net Profit Attributable to Parent Up 13.3%  

Haitian Flavoring & Food Co., Ltd.'s revenue in the first half of the year increased by 7.6% year-on-year, and the net profit attributable to the parent company rose by 13.3%.  

# Insta360's H1 Revenue Rises 51.17% YoY, Surge in R&D and Marketing Expenses Leads to Only 0.25% Growth in Net Profit  

Insta360's revenue in the first half of the year increased by 51.17% year-on-year, but a surge in R&D and marketing expenses resulted in a mere 0.25% growth in net profit.  

# Proposed Price Hike for New PV Glass Orders in September? Industry Leader Flat Glass: Negotiating Prices with Customers  

Will the quotation for new photovoltaic (PV) glass orders be raised in September? Flat Glass, a leader in the industry, stated that it is negotiating prices with customers.  

## Overseas Macroeconomics  

### U.S. to "Compete for Silver" Next as Silver Is Included in Critical Minerals?  

The U.S. Geological Survey (USGS) has proposed adding silver and five other minerals to the 2025 Critical Minerals List, expanding the scope of Section 232 investigations to 56 metals and minerals. Citigroup believes that the U.S. relies on imports for 64% of its silver, and the current futures premium of only 2-3% significantly underestimates tariff risks. Citigroup maintains its bullish expectation that silver will reach $43 per ounce in the next 6-12 months.  

### ECB July Meeting Minutes: Inflation Risks Generally Balanced, Euro Zone Economy Shows Moderate Resilience, Standing Pat Is a Prudent Move  

The ECB's July meeting minutes showed that although rising energy prices have pushed up short-term prices, members expect overall inflation to fall to around 1.5% by the start of 2026. Core inflation has now dropped to 2.3%, the lowest in three years, and members expect it to further fall to 2% early next year.  

### Goldman Sachs, Citigroup: French Political Crisis Already Priced In, Fundamentals Support Sustained Strength of European Stocks  

Analyses suggest that the impact of France's political turmoil on European stocks is limited and has already been digested by the market. Strong economic fundamentals, improved profit prospects, and market expectations for such risks have quickly stabilized the initial panic. Most strategists believe that this turmoil is not enough to reverse the outperformance of European stocks relative to U.S. stocks this year; instead, it presents a buying opportunity on dips.  

### Denmark Summons U.S. Chargé d'Affaires, Demands Explanation for U.S. Covert Activities in Greenland  

According to the Global Times, at least three Americans with close ties to Trump have been active in Greenland, attempting to push Greenland to distance itself from Denmark and align with the U.S. by building private networks and infiltrating local society. They collected sensitive historical information and compiled lists of local people's attitudes towards "being governed by the U.S." The U.S. Embassy responded that individual actions are not controlled by the government.  

### Senior BOJ Official Signals Again: Current Environment for Rate Hikes More Mature Than in April  

On Thursday, Bank of Japan (BOJ) Policy Board Member Junko Nakagawa stated that Japan's current economic environment is more conducive to rate hikes than in April. If economic and inflation outlooks meet expectations, the central bank will continue to raise interest rates. However, she used restrained wording this time, noting that current trade uncertainties still exist to avoid excessive market expectations for a September rate hike. Currently, the market expects the probability of the BOJ raising interest rates by the end of October to have risen to 60%.  

### Volatile Central Bank Policy Turns Japan's Bond Market into a "Value Trap" for Overseas Investors  

The BOJ has not raised interest rates since January, and persistent inflation has once again hit the prospects of long-term bonds. This week, the yield on 30-year Japanese government bonds (JGBs) soared to a record high of over 3.2%. Buying JGBs perfectly illustrates the concept of a "value trap"—cheap assets attract buyers but continue to decline in value.  

## Overseas Companies/Figures  

### Trump: Soros Should Be Charged with Racketeering  

Trump claimed that 95-year-old George Soros and his son Alex Soros should face charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act for allegedly supporting "violent protests" across the U.S. The Soros side responded that Trump's allegations are "shocking and untrue" and emphasized that the foundation "does not support or fund violent protests".  

### Spot Ethereum ETFs See Booming Trading, Attracting Over 10 Times More Capital Than Bitcoin in Past Five Trading Days  

According to CoinGlass data, since August 21, spot Ethereum ETFs have recorded capital inflows of up to $1.83 billion, while Bitcoin ETFs have only seen $171 million in inflows over the same period—less than 1/10 of Ethereum's. Since the passage of the *GENIUS Stablecoin Act* in July, market momentum seems to be shifting to Ethereum. The reason is that the Ethereum network holds the largest share of the stablecoin and real-world asset tokenization market.  

## Industries/Concepts  

### 1. Computing Power  

According to Shanghai Securities News, the performance of multiple listed companies in the CPO (Coherent Point-to-Point Optics) concept sector has grown significantly. NVIDIA's revenue in the second quarter of fiscal year 2026 reached $46.74 billion, a year-on-year increase of 56%; its net profit was $26.42 billion, a year-on-year increase of 59%. Zhongji Innolight released its 2025 interim report, achieving a net profit of RMB 3.995 billion in the first half of 2025, a year-on-year increase of 69.40%. In addition, Goldman Sachs raised the 12-month target price of Zhongji Innolight to RMB 392 and that of New H3C Technologies Co., Ltd. to RMB 398. Tianfu Communication's net profit in the first half of the year was RMB 899 million, a year-on-year increase of 37%; Cambridge Technology's net profit attributable to the parent company in the first half of the year was RMB 121 million, a year-on-year increase of 51.12%.  

**Commentary**: Guosen Securities stated that the global computing power boom continues. With the accelerated shipment of NVIDIA's GB series high-density computing power racks, the prosperity of global high-end computing power has further improved. Amid the current AIGC wave, global server shipments continue to grow. IDC, a consulting firm, predicts that the global AI server market size is expected to reach $222.7 billion by 2028, with the proportion of generative AI servers increasing from 29.6% in 2025 to 37.7% in 2028. From the demand side, against the backdrop of accelerated model iteration, demand on the training side remains high, while demand on the inference side gradually increases with the penetration of applications.  

### 2. Optical Communication  

According to Science and Technology Daily, using advanced thin-film lithium niobate photonic materials and based on a new architecture, Chinese researchers have developed the world's first adaptive, full-band, high-speed wireless communication chip based on optoelectronic fusion integration technology. Experimental verification shows that the innovative system based on this chip can achieve an ultra-high-speed wireless transmission rate of more than 120 Gbps, completely breaking the bottleneck of traditional electronic devices requiring "one set of equipment for one frequency band". It meets the peak rate requirements of 6G communication, and the end-to-end wireless communication link maintains consistent performance across all frequency bands without degradation in high-frequency performance. This clears obstacles for the efficient development of spectrum resources in the terahertz and even higher frequency bands for 6G communication.  

**Commentary**: China Securities Journal pointed out that the full-band reconstruction solution will spawn more flexible and intelligent AI wireless networks, which is expected to reshape the future wireless communication landscape. It lays the hardware foundation for a true "AI-native network" for the first time—it can dynamically adjust communication parameters through built-in algorithms to cope with complex electromagnetic environments. It is also an ideal carrier for integrated communication-sensing systems, enabling future base stations and vehicle-mounted devices to accurately sense the surrounding environment while transmitting data, truly realizing "communication as sensing". From an industrial perspective, this breakthrough will strongly drive the upgrading of key components such as wideband antennas and optoelectronic integration modules, bringing about a full-chain transformation from materials and devices to complete machines and networks.  

### 3. Brain-Computer Interface  

According to China News Service, recently, the State Key Laboratory of Sensor Technology of the Institute of Aerospace Information Innovation, Chinese Academy of Sciences, and the Department of Neurosurgery of the First Affiliated Hospital of Harbin Medical University jointly successfully completed a clinical trial of "precision positioning of deep brain tumor boundaries based on implanted microelectrode arrays". This is the world's first clinical trial applying brain-computer interface (BCI) to the precision positioning of deep brain tumor boundaries during surgery, marking a major breakthrough in China's independently developed implanted clinical BCI technology. This technology provides real-time, high-precision "lesion navigation" for neurosurgery, which is expected to maximize the protection of healthy brain tissue while accurately removing tumors, improving the rate of postoperative neurological function preservation and the quality of life of patients, and has important clinical promotion value.  

**Commentary**: China Securities Journal pointed out that as a revolutionary human-computer interaction technology, BCI is moving from the laboratory to commercial application. In January 2024, seven government departments jointly issued a document listing BCI as one of the top ten landmark products in future industries, clarifying the direction of technological research. In March 2025, the National Healthcare Security Administration established independent BCI charging items (such as invasive implantation fees) for the first time, breaking through the "last mile" of clinical application. It is expected that by 2030, the global BCI market size will exceed $100 billion, and the market size in the medical application field is expected to reach $40 billion. With policy support, clinical breakthroughs, and industrial chain collaboration, China has become a core driver of global BCI industrialization.  

### 4. Real Estate  

According to Xinhuanet, on August 28, *Opinions of the CPC Central Committee and the State Council on Promoting High-Quality Urban Development* was released to the public. This document emphasizes that cities are important carriers of modernization and key spaces for people's happy lives. The document proposes that by 2030, significant progress will be made in the construction of modern people-centered cities, policy systems adapting to high-quality urban development will be continuously improved, the transformation of old and new driving forces will be accelerated, the quality of human settlements will be significantly improved, green transformation will be further advanced, the foundation for safety will be solidly strengthened, cultural charm will be fully demonstrated, and governance capacity will be greatly enhanced; by 2035, basically modern people-centered cities will be built.  

**Commentary**: Securities Times pointed out that this *Opinion* is a core policy document issued at the national level following the Central Urban Work Conference in July 2025. It aims to respond to the demand for transforming urban development drivers and promote an innovation-driven, domestic demand-led, green, and low-carbon modern urban development model. In 2024, China's urbanization rate rose to 67%, and China's urbanization is shifting from a period of rapid growth to a period of stable development. Urban development is moving from a stage of large-scale incremental expansion to a stage focused on stock improvement and efficiency enhancement. The Central Urban Work Conference held in July this year clearly proposed to take promoting high-quality urban development as the theme and advancing urban renewal as a key measure to blaze a new path for urban modernization with Chinese characteristics. This core guiding document once again emphasizes advancing urban renewal as a key measure and steadily promoting the renovation of urban villages and dilapidated houses, and it is expected that urban renewal across various regions will further accelerate.  

## Preview of Today's Key News  

- U.S. July personal income, personal consumption expenditures (PCE), and core PCE price index  

- U.S. August University of Michigan consumer sentiment and inflation expectations  

- August CPI of Japan, Germany, and France  

- Earnings releases of Alibaba and Nayuki's Tea  

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