Morning News

Source: Wall Street News

Market Overview

Thanks to breakthroughs in trade agreements and Trump's call to "buy", U.S. stocks have seen two consecutive positive days, with the three major U.S. stock indexes rising for two consecutive sessions. Tesla closed up more than 3%, and Google rebounded nearly 2%. Benefiting from trade agreements, Alcoa rose more than 5%, U.S. Steel rose more than 2%, and Boeing rose more than 3%. Mattel once fell more than 5%. AppLovin, which had good earnings reports, rose nearly 12%, and D - Wave, a quantum computing stock, closed up 51%, while Arm, which had disappointing guidance, fell more than 6%.

After the U.S.-UK trade agreement, U.S. Treasuries plunged, and the yield on U.S. Treasuries rose by more than 10 basis points during trading. The Bank of England cut interest rates cautiously, and the yield on two-year UK gilts rose by more than 10 basis points.

The U.S. Dollar Index rose more than 1% during trading to a nearly four-week high; the Japanese yen fell more than 1% during trading; Bitcoin once rose nearly $6,000 and broke through the $100,000 mark for the first time in three months.

Crude oil rebounded to a one - week high, with U.S. oil rising more than 3%. Gold fell for two consecutive days, and gold futures once fell more than 2%.

During Asian trading hours, the ChiNext Index closed up 1.65%, the military - industrial sector surged again, the Hang Seng Index rose for six consecutive days, Shanghai Aunt (presumably a stock or business related entity) rose 40%, and government bonds strengthened across the board.

**Top News**

The UK and the US have reached an agreement on the terms of a tariff trade deal, but details remain to be finalized. The US side retains a 10% benchmark tariff. The tariff on the first 100,000 British cars imported into the US is reduced to 10%, and the tariffs on steel and aluminum are reduced to zero. The UK reduces the tariff on ethanol from the US to zero, and a reciprocal access agreement for beef is reached. Trump said the agreement with the UK is not a template, 10% may be the minimum, and tariffs for other countries may be higher.

The European Union will file a lawsuit against US tariffs with the World Trade Organization and is preparing to take countermeasures against $95 billion worth of products imported from the US, targeting cars, aircraft, and whiskey.

Trump called for "buying stocks" and criticized Powell again for being slow, saying he doesn't understand anything and there is almost no inflation. The media reported that Trump proposed raising taxes on millionaires to balance the budget, with a maximum tax rate of 39.6%.

In the face of tariff shocks, the Bank of England cut interest rates by 25 basis points as scheduled, but there was a three - way split in the decision - making.

Challenging Saudi - led OPEC +: Kazakhstan said it has no plans to cut oil production in May.

The India - Pakistan conflict escalated, with explosions in many places. Pakistan's stock market plunged 7%, and the Indian rupee against the US dollar hit its biggest decline in more than three years.

Google responded to the decline in search traffic on Apple devices: There is still continuous growth in the total volume of search queries. Morgan Stanley said the threat of AI to search has been exaggerated, and the best time to bottom - fish Google has arrived.

There have been major changes in the leadership of OpenAI. A new application CEO has been appointed, and Altman has relinquished some of his powers. OpenAI is highly ambitious and has launched a global version of the "Stargate", with the first batch of ten countries.

**Market Closing Reports**

European and American Stock Markets: The Dow Jones Industrial Average rose 0.62%, the S&P 500 Index rose 0.58%, and the Nasdaq Composite Index rose 1.07%. The STOXX 600 Index in Europe rose 0.4%.

A - shares: The Shanghai Composite Index rose 0.28%, the Shenzhen Component Index rose 0.93%, and the ChiNext Index rose 1.65%.

Bond Market: By the end of bond market trading, the yield on the 10 - year benchmark U.S. Treasury note was about 4.38%, rising about 11 basis points during the day; the yield on the two - year U.S. Treasury note was about 3.87%, rising about 9 basis points during the day.

Commodities: WTI June crude oil futures rose 3.17%. Brent July crude oil futures rose 2.81%. COMEX June gold futures fell 2.53%. LME aluminum rose 1.26%, and Comex copper fell 1.19%.

**Details of Top News**

**Global Highlights**

The UK and the US have reached an agreement on the terms of a tariff trade deal, but details remain to be finalized.

According to CCTV, the US still retains a 10% benchmark tariff. The tariff on cars imported from the UK will be reduced from 27.5% to 10%, and the tariffs on steel and aluminum will be reduced from 25% to zero. The 10% tariff preference will apply to 100,000 British cars, covering almost all of the UK's car exports to the US last year. The two sides also reached a new reciprocal access agreement for the beef market. British farmers will receive a duty - free quota of 13,000 tons, and the UK emphasizes that it will not relax its standards for imported food. In addition, the UK will reduce the tariff on ethanol from the US for beer production to zero.

According to Xinhua News Agency, Trump said that the final details of the agreement will be finalized in the next few weeks. The White House emphasized that the so - called "reciprocal tariff" of 10% that the US previously imposed on trading partners will continue to be retained. Trump told the media that the 10% tariff for the UK is not a template for other countries. This may be the minimum tariff, and tariffs for other countries may be higher.

The European Union will file a lawsuit against US tariffs with the World Trade Organization and is preparing to take countermeasures against products imported from the US worth 95 billion euros.

According to Xinhua News Agency, on the 8th, the European Commission launched a public consultation on a list of goods to counter US tariffs, involving products imported from the US worth 95 billion euros, mainly covering the industrial and agricultural product sectors. The EU pointed out that if the negotiations with the US fail to reach a mutually beneficial result and persuade the US to cancel the tariffs, the EU may take countermeasures against these imported US goods.

At the same time, the EU will file a lawsuit with the World Trade Organization (WTO) regarding the US "reciprocal tariffs" and its tariff policies on complete vehicles and auto parts.

Media: If the negotiations with the US fail, the EU will target US cars, aircraft, and whiskey.

Trump called for "buying stocks" and said he doesn't want to bomb Iran. During trading, U.S. stock indexes rose more than 1%, and U.S. oil rose more than 3%. Trump said: "Mr. Too Late" Powell is a fool, doesn't understand anything, and there is almost no inflation.

When announcing the U.S.-UK trade agreement, Trump said, "It's best to go out and buy stocks now." U.S. stocks rose during trading. The three major stock indexes rose at least more than 1%, and the Nasdaq once rose 2%.

Trump said the US will establish an aluminum and steel trade alliance with the UK. Alcoa once rose more than 6%. Trump said the UK agreed to purchase $10 billion worth of Boeing aircraft, and Boeing once rose 5%. Trump warned that if a company moves out of the US, it will impose a 100% tariff on its toys. Mattel once fell more than 5%.

Trump criticized Powell again for being slow, saying that all central banks have cut interest rates, and the Federal Reserve is an exception. U.S. Vice - President Vance also criticized Powell for being slow, saying he has made mistakes in almost everything. The previous day, Powell admitted that both inflation and the unemployment rate may deteriorate, but insisted that the Federal Reserve still needs to wait for more data before considering action.

In the face of tariff shocks, the Bank of England cut interest rates by 25 basis points as scheduled, but there was a three - way split in the decision - making. Five members supported a 25 - basis - point rate cut, two supported a 50 - basis - point rate cut, and two advocated no change. Among those who supported a 25 - basis - point rate cut, most believed that changes in global trade justified the rate cut, while others thought the reasons for the rate cut were already clear.

Kazakhstan said it has no plans to cut oil production in May. According to the OPEC + agreement, Kazakhstan's crude oil production this month should be slightly less than 1.4 million barrels per day. However, according to Kazakhstan's current statement, its production will reach 2 million barrels per day. This is a direct challenge to Saudi - led OPEC +. Saudi Arabia has previously issued severe warnings to countries that violate the quota.

The India - Pakistan conflict escalated, with explosions in many places. Pakistan's stock market plunged 7%, and the Indian rupee against the US dollar hit its biggest decline in more than three years, falling 1.1% during trading. According to CCTV News, Pakistan has shot down more than 25 Indian "Harop" drones. The incident has killed at least one civilian and injured five people.

Google responded to the decline in search traffic on Apple devices: There is still continuous growth in the total volume of search queries.

Google painted a very different picture of search trends: We still see continuous growth in the total volume of search queries, which includes an increase in the number of queries from Apple devices and platforms. More generally, as we add new features to the search engine, people find Google Search more helpful for more questions - they access search in new ways and scenarios through browsers or Google apps, using voice or Google Lens. We are excited about such innovations and look forward to sharing more at the Google I/O conference.

Google's "Yahoo Moment"? Apple's browser search volume has declined for the first time in 20 years, reigniting concerns that "AI search" is squeezing "traditional search". According to Ming - Chi Kuo, Google is facing a "Yahoo moment" of life and death: Yahoo's advertising business started in 1995, and Google's advertising business started in 2000. The former's advertising business began to decline in 2008.

Morgan Stanley: Crisis is also an opportunity. The threat of AI to search has been exaggerated, and the best time to bottom - fish Google has arrived. Morgan Stanley said that the first decline in Safari search volume more reflects users shifting from browsers to apps rather than from Google Search. The decline in Google's paid clicks does not necessarily mean a loss of market share, and part of the reason may be that the launched AI search feature is improving the click - through conversion rate. The current panic sentiment has created an excellent buying opportunity for investors, and Google's stock price still has a 22% upside potential.

The New Bond King: U.S. inflation may reach 4% by the end of the year, but the Federal Reserve may be forced to cut interest rates, or even start Yield Curve Control (YCC). How can U.S. stocks not fall? The price of gold will reach $4,000. Private equity will be the next major market event, similar to the subprime mortgage crisis in 2007.

Jeffrey Gundlach, the New Bond King, warned that considering the current situation, the U.S. inflation rate is likely to exceed 4% by the end of this year. In a high - inflation environment, the Federal Reserve may not be supposed to cut interest rates, as this may cause greater trouble in the long run. However, high interest rates may lead to external shocks. Due to some liquidity problems, the Federal Reserve will eventually cut interest rates, or even start YCC.

The rise in the unemployment rate and the inversion of the yield curve both indicate that the U.S. economy is about to enter a recession. It is predicted that the S&P 500 Index may fall to around 4,600 points. Investors are in a market with medium - term risk aversion. Due to concerns about geopolitical unrest, tariffs, and the existing huge debt, the price of gold may rise to $4,000.

Supporters of private credit claim that its volatility is lower than that of public offerings, but this claim is based on infrequent market valuation adjustments, and the valuation in the private credit sector is highly opaque. Just as the subprime mortgage crisis in 2007 initially seemed like a minor problem but eventually triggered a widespread chain reaction, the current potential liquidity problems deserve attention.

Hong Hao: The Hong Kong stock market will hit new highs in the second half of the year. U.S. stocks are still overvalued. A one - third decline is reasonable. U.S. stocks are rebounding, not reversing.

**Domestic Macroeconomics**

The President of China held talks with Russian President Vladimir Putin and pointed out that China and Russia should adhere to the general direction of cooperation, eliminate external interference, and make the foundation of cooperation "stable" more solid and the driving force for "progress" more sufficient. We should give play to the complementary advantages of the resource endowments and industrial systems of the two countries, and expand high - quality mutually beneficial cooperation in such fields as economy and trade, energy, agriculture, aerospace, and artificial intelligence. Using the docking of the Belt and Road Initiative and the Eurasian Economic Union as a platform, we should build a high - standard interconnected pattern. We should fully unleash the potential of the "China - Russia Cultural Year", strengthen cooperation in education, film, tourism, sports, local areas, etc., and promote in - depth people - to - people bonds. We should closely coordinate and cooperate on multilateral platforms such as the United Nations, the Shanghai Cooperation Organization, and BRICS, unite the Global South, adhere to true multilateralism, and lead the correct direction of global governance reform.

The People's Republic of China and the Russian Federation issued a joint statement on global strategic stability.

The People's Republic of China and the Russian Federation issued a joint statement on further strengthening cooperation to safeguard the authority of international law.

China and the US will hold talks on economic and trade issues. Chinese experts: China's agreement to engage with the US does not mean negotiation, nor does it mean concession. According to the Global Times, Reuters quoted informed sources as saying that the talks are expected to discuss comprehensively reducing tariffs, canceling tariffs on specific products, the US canceling the small - scale exemption policy for Chinese goods, and China's export controls on US companies. Song Guoyou, Deputy Director of the Center for American Studies at Fudan University, said that whether it is engagement, talks, or possible future negotiations, China will safeguard its own interests.

The Hong Kong Exchange Fund reduced its holdings of U.S. dollar assets. Yu Wai - man, Chief Executive of the Hong Kong Monetary Authority, said that in order to strengthen "defensive deployment", the proportion of U.S. dollar assets in the relevant investment portfolios of the Hong Kong Exchange Fund has been reduced from more than 90% to about 79%, and the investment maturity of the U.S. Treasury bonds it holds is also constantly shortening.

Domestic Companies

HarmonyOS - powered computer debuts. On May 8, the HarmonyOS - powered computer was officially unveiled in Shenzhen. This is also the first appearance of the HarmonyOS operating system on the computer side. It features self - controllable kernel layer, system - level AI capabilities, full - scene coordination capabilities, and all - around security capabilities.

SMIC's net profit in Q1 increased by 166.5% year - on - year. Wafer sales were stable, but the outlook for Q2 is cautious. SMIC's revenue in the first quarter of 2025 reached 2.247 billion US dollars (about 16.3 billion yuan), a sequential increase of 1.8% and a year - on - year increase of 29.4%; wafer sales increased by 27.7%. However, the company's outlook for Q2 is cautious, expecting a sequential revenue decline of 4 - 6% in Q2.

Hua Hong Semiconductor's Q1 revenue increased by 18.66%, while net profit declined by 89.73%. Hua Hong Semiconductor's Q1 revenue increased by 18.66% to 541 million US dollars, and sales revenue increased by 17.6% year - on - year. For the Q2 performance guidance, the company expects that the main business revenue will be between about 550 million and 570 million US dollars; the gross profit margin of the main business will be between about 7% and 9%.

Overseas Macroeconomics

Weighed down by the decline in corporate output, U.S. labor productivity declined for the first time since 2022. U.S. labor productivity declined at an annualized rate of 0.8% in the first quarter, exceeding expectations and ending a previous streak of consecutive growth. Unit labor costs jumped by 5.7% during January - March this year, the largest increase in a year. U.S. labor costs may soar, putting pressure on corporate profits.

The number of initial jobless claims in the U.S. last week was 228,000, with a market expectation of 230,000. In the week ending April 26, the number of continued jobless claims declined by 29,000 to 1.879 million, also better than expected. The effects of Trump's tariffs and DOGE layoffs have not yet emerged.

The Federal Reserve: The three - year inflation expectation in the U.S. reached a new high since 2022. According to the New York Fed's April survey, the three - year inflation expectation among the U.S. public rose from 3% to 4.2%, reaching a nearly three - year high. Confidence in the job market declined, with the group over 60 years old having the weakest confidence. The expectation of an increase in the unemployment rate reached the highest level since the pandemic. More than one - third of households expect their financial situation to deteriorate in the coming year, and the expected income growth has dropped to the lowest level in more than four years.

Facing tariffs and choosing to "wait and see", the Federal Reserve's dilemma: Cutting interest rates too early risks being forced to raise them later, while waiting too long may require more aggressive rate cuts. According to statistics from the "New Fed News Agency", Powell used the expression "wait and see" 11 times at the press conference, clearly conveying the Federal Reserve's current policy stance. Analysts believe that cutting interest rates too quickly now will increase the risk that the Federal Reserve will have to reverse its policy and raise interest rates in a few months; but if it continues to do nothing, it is equivalent to "passive tightening", and more aggressive rate cuts may be needed to rescue the economy.

Bond giant PIMCO: The market underestimates the tariff risk, and the risk of a U.S. economic recession has soared to a multi - year high. PIMCO executives warned investors that the risk of a U.S. economic recession has reached its highest level in years and pointed out that the market may underestimate Trump's determination to restore high tariffs. At the same time, the company has started to adjust its investment portfolio, increasing its exposure to short - term bonds to cope with the rising risk of market volatility.

The U.S. dollar has "fallen out of favor", and foreign capital has flooded into Southeast Asian stock markets, buying 280 million US dollars in a week, reaching a seven - month high. As emerging market currencies appreciate, global funds are reinvesting in Southeast Asian stock markets. In the week ending May 2, the net inflow of foreign capital into the stock market reached 280 million US dollars, the largest single - week net purchase since September last year. The capital inflow momentum continued, and about 154 million US dollars of stocks were bought again within three days on May 7.

U.S. media revealed: In the India - U.S. tariff negotiations, India proposed "zero - for - zero" for specific goods. According to the Global Times, media reported on Tuesday the 6th that India proposed a "zero - for - zero" tariff arrangement for specific goods such as steel, auto parts, and pharmaceuticals in the trade negotiations with the U.S., but based on the principle of reciprocity and limited to a certain quantity of imported goods. The U.S. side is concerned that India's quality control orders constitute non - tariff trade barriers.

Trump proposed raising taxes on millionaires to balance the budget, with a maximum rate of 39.6%. Media reported that Trump's proposal includes creating a new top tax rate bracket of 39.6% for individuals with an annual income of at least 2.5 million US dollars or families with an annual income of more than 5 million US dollars. The main purpose of this proposal is to ease the fiscal pressure brought by Trump's tax cuts. It is currently unclear whether this proposal will also expand tax cuts for some small business owners, who usually report their income through personal tax returns.

Overseas Companies

With the worsening trade situation, shipping giant Maersk lowered its growth forecast for the global container market. Maersk said that due to "increased macroeconomic and geopolitical uncertainties", the company has lowered its market growth expectation for 2025 from the previous "about 4%" to the range of " - 1% to 4%".

Threatened by tariffs, Toyota's Q1 profit increased by only 0.3%, and it is expected that the full - year profit will decline by 21%.

Apple is developing dedicated chips for smart glasses and AI servers, with the project code - named "Baltra", which is expected to be ready by 2027. Apple is accelerating its layout in wearables and AI hardware, planning to launch its first smart glasses in 2026 - 2027 to challenge Meta's product line. At the same time, Apple is also developing chips for AirPods and Apple Watch with cameras, as well as new Mac chips and professional - grade modem chips, fully focusing on the AI and wearable device fields.

Microsoft's AI Agent supports A2A and MCP protocols, and the golden age of agents has arrived. After using the A2A and MCP protocols, agents can break through many barriers such as data, development models, communication and interaction, and operating environments, and easily build large - scale complex agent automation processes.

Major changes in the leadership of OpenAI: A new application CEO was appointed, and Altman relinquished some powers. It is reported that the introduction of the new application CEO Fidji Simo marks OpenAI's further improvement of its management structure, preparing for the next stage of growth and commercialization. Fidji Simo's rich experience in e - commerce and advertising business may be of great benefit to OpenAI, especially in the context of the company's plan to expand its revenue sources.

OpenAI is highly ambitious and has launched a global - scale "Stargate", with the first batch of 10 countries. OpenAI announced the launch of the "OpenAI for Countries" initiative, expanding the "Stargate" project globally, with the first batch of 10 target partner countries. This initiative promises to cooperate with countries to develop AI infrastructure and will provide a customized version of ChatGPT to improve fields such as healthcare, education, and law.

The earnings seasons of "quantum computing" companies are being announced one after another, and IonQ has set a good start. IonQ announced its first - quarter earnings report, with better - than - expected financial results, raising market expectations for the upcoming earnings reports of D - Wave Quantum and Rigetti Computing. IonQ's management expects annual revenue to be between 75 million and 95 million US dollars, and this time it still did not mention a profitability timeline.

Buffett's "last big bet" failed. The share price of Occidental Petroleum dropped to a three - year low, and Berkshire Hathaway suffered a loss of 6.4 billion US dollars. Buffett's investments in the oil sector have not always been successful. He bought a large amount of ConocoPhillips in 2008, but then encountered the global economic recession and the collapse of oil prices. Later, Berkshire Hathaway invested in ExxonMobil several times but sold all of them when oil prices declined in 2014.

The largest PBM in the U.S. "sided" with Novo Nordisk, causing Eli Lilly's stock price to plummet, and a price war between the two "GLP - 1 stars" has begun.

The largest acquisition in the cryptocurrency industry: Coinbase acquired derivatives exchange Deribit for 2.9 billion US dollars.

Industry/Concepts

1. Military trade: According to a research report by Huatai Securities, during this round of India - Pakistan conflict, Pakistan shot down several Indian aircraft. With the high military spending globally and frequent geopolitical conflicts, it may signal that the military trade market is about to enter a substantial upward cycle. Currently, drones and radar products are two types of main combat equipment with greater opportunities for China's military trade exports, and related listed companies are worthy of attention.

2. Telecommunications: According to a research report by CSC Financial Co., Ltd., the valuation of the telecommunications sector is still at a historically low level. Three directions can be focused on. First, stocks with strong and continuous revenue growth in 2024 and Q1 2025, positive expectations, and low valuations; second, high - quality dividend - paying telecom operators; third, the military telecommunications and submarine cable sectors, where demand is expected to gradually recover, and performance and valuation may be restored.

3. Oil transportation: According to a report by Guotai Junan Securities and Haitong Securities, since 2025, benefiting from the gradual escalation of U.S. sanctions against Iran, which has helped restore the supply - demand balance in the compliant market, the freight rate center of the oil transportation market has also significantly rebounded. Considering the lag in revenue recognition, it is expected that the performance of oil transportation companies will rise quarter by quarter in 2025. In the coming years, the supply of tankers will remain rigid, and the increase in crude oil production by OPEC + and others will benefit the growth of oil transportation demand. The impact of the Russia - Ukraine peace talks is likely to be limited, and it is expected that the supply - demand situation in the oil transportation industry will continue to improve.

4. AI data centers: According to a research report by Western Securities, the ultimate constraint of computing power is electricity. AI data centers consume a large amount of electricity. In the short term, it is a competition for computing power, and in the long term, it is a competition for energy. The article sorted out the core beneficiary links in the industrial chain of AIDC, such as power supply modules, HVDC, dry - type transformers, and diesel generator sets.

Preview of Today's Major News

China's April import and export data.

China's new RMB loans, the increment of social financing scale, M1, and M2.

New York Fed President John Williams, Federal Reserve Governor Lisa D. Cook, Federal Reserve Governor Michael S. Barr, and Chicago Fed President Austan Goolsbee will give speeches.

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