Morning News

Source: Wall Street Journal

### Market Overview

The upward momentum of the US stock market shows signs of fatigue, awaiting the speech of Powell. The S&P 500 index has seen a thrilling three - day winning streak. The Dow Jones Industrial Average has declined for two consecutive days. Technology stocks are strong. Nvidia rose more than 4%, Tesla and AMD closed up more than 4%, and Advanced Micro Devices rose nearly 16%; Cisco rose nearly 4% in after - hours trading after releasing its financial report. The China stock index rebounded more than 1%, Tencent rose more than 3% after releasing its financial report, and JD.com fell more than 4%.

The yield on US Treasury bonds hit a one - month high. The US dollar has fallen for two consecutive days. During the session, the Japanese yen rose more than 1% and the South Korean won rose nearly 2%. Later, the US dollar rebounded from a low level, showing a V - shaped trend within the day. The offshore RMB fell more than 200 points during the session, losing the 7.21 mark.

Crude oil dropped from a three - week high, falling more than 1% during the session. Gold dropped to a one - month low, falling more than 2% during the session.

During the Asian session, A - shares closed higher across the board. The Shanghai Composite Index returned to 3,400 points. The large financial and Hong Kong transportation sectors saw a rally. The Hang Seng Tech Index rose more than 2%, technology - related stocks strengthened, and government bonds generally fell.

### News

In April, the new social financing scale in China was 1.16 trillion yuan, the new RMB loans were 280 billion yuan, the M2 - M1 scissors gap widened, and the RMB deposits increased by 12.55 trillion yuan in the first four months.

Seven departments: The "National Venture Capital Guidance Fund" will be established to guide long - term capital to invest in early - stage, small - scale, long - term, and hard - technology projects.

Trump: Treasury Secretary Besent understands the market. When he appears on TV, everything will rise.

Report: The United States will not seek the depreciation of the US dollar in the trade agreement, and the US dollar rose in the short term and generally turned up within the day. Has the first country to recognize the "Mar - a - Lago Agreement" emerged? South Korea confirmed that it has discussed foreign exchange policies with the United States.

Trump obtained a $1.2 - trillion "economic exchange" commitment from Qatar, and Boeing received the largest order in history.

Tencent Holdings recorded the fastest growth in three years. Its revenue in the first quarter increased by 13% year - on - year. The revenue of Honor of Kings reached a new high, and AI made a substantial contribution. Conference call: The effect of AI has been manifested in advertising, games, and cloud computing. There is sufficient GPU reserve and enough model training.

Benefiting from the pre - tariff stockpiling boom, Hon Hai's sales in the first quarter increased by 24% year - on - year, and its net profit far exceeded expectations.

Poe: The usage rate of DeepSeek has decreased by 50%, Kuaishou is rising, and OpenAI is soaring.

Buffett explained his "retirement" decision: He began to lose his balance occasionally, and sometimes he couldn't even remember a person's name. Suddenly, the newspaper he read seemed to have too little ink printed on it.

### Market Closing Quotes

European and American stock markets: The Dow Jones Industrial Average fell 0.21%, the S&P 500 index rose 0.1%, and the Nasdaq rose 0.72%. The European STOXX 600 index closed down 0.24%.

A - shares: The Shanghai Composite Index rose 0.86%, the Shenzhen Component Index rose 0.64%, and the ChiNext Index rose 1.01%.

Bond market: The yield on the 10 - year US Treasury bond rose 7.13 basis points, reaching a daily high of 4.5363%. The yield on the two - year US Treasury bond rose about 6 basis points, reaching a daily high of 4.0592%.

Commodities: COMEX gold futures fell 1.91%, closing at $3,185.70 per ounce. WTI June crude oil futures closed down 0.81%, at $63.15 per barrel. Brent July crude oil futures closed down 0.81%, at $66.09 per barrel.

Details of Key News  

 Global Highlights  

China's social financing increased by 1.16 trillion yuan in April, with new RMB loans reaching 280 billion yuan, and the M2-M1 scissors gap widening. The cumulative increase in social financing scale in the first four months was 16.34 trillion yuan, 3.61 trillion yuan more than the same period last year. RMB loans increased by 10.06 trillion yuan in the first four months, with further improvement in the credit structure—loans to enterprises (institutions) increased by 9.27 trillion yuan. RMB deposits increased by 12.55 trillion yuan in the first four months. Additionally, the growth rate of M2 accelerated significantly compared to the previous month.  

Seven government departments announced the establishment of a "National Venture Capital Guidance Fund" to channel long-term capital into early-stage, small-scale, long-term, and hard technology projects. The departments stated that the fund aims to guide investments in early-stage startups, small enterprises, long-term projects, and hard technology sectors. Meanwhile, a "technology board" will be established in the bond market to promote the high-quality development of technology innovation corporate bonds, include high-quality sci-tech bonds in benchmark market-making varieties, and encourage investors to increase investments in sci-tech bonds.  

Trump praised Treasury Secretary Besent, stating, "When he goes on TV, everything goes up." U.S. President Trump commented on the market again, highlighting that U.S. Treasury Secretary Besent understands the market. "When Besent appears on TV, everything rises," he said. U.S. stocks rose slightly in the short term, maintaining their daily upward trend. The USD/CHF rose 0.5% intraday to 0.843. Besent’s speech that day addressed trade negotiations. Separately, media reports cited sources on Wednesday that the U.S. would not seek dollar depreciation in trade agreements, with Besent as the sole official responsible for handling such issues.  

Report: The U.S. will not seek dollar depreciation in trade agreements, leading to a short-term rally and overall daily gain for the dollar. Citing informed sources, media reported that the U.S. would not pursue dollar depreciation in trade deals. Treasury Secretary Besent is the only official authorized to handle these matters, with no delegation of authority for monetary policy consultations—negotiations can only occur in his presence. The U.S. Dollar Index surged approximately 20 points above 101, turning positive for the day.  

Is South Korea the first country to acknowledge the "Mar-a-Lago Agreement"? Seoul confirms discussing foreign exchange policies with Washington. Earlier on Wednesday, reports stated that South Korea’s Vice Minister of Finance met with U.S. Assistant Secretary of the Treasury for International Financial Affairs Robert Kaproth on May 5 to discuss the USD/KRW market. The dollar fell in response, with USD/KRW hitting a one-week low and dropping 1.92% intraday.  

Trump secures a $1.2 trillion "economic exchange" commitment from Qatar, as Boeing lands its largest-ever order. The White House announced that Trump reached economic deals with Qatar worth over $243.5 billion, including a $96 billion Qatar Airways order for up to 210 Boeing wide-body planes powered by GE aviation engines, as well as agreements in energy infrastructure, advanced engineering, quantum technology, and arms sales (e.g., MQ-9B drones). A defense cooperation intent signed by both countries includes potential investments exceeding $38 billion. Boeing’s stock rose over 3% at one point, hitting a 15-month high.  

Tencent Holdings records its fastest growth in three years, with Q1 revenue up 13% year-on-year, record-high revenue from *Honor of Kings*, and substantial contributions from AI. During a conference call, the company stated that AI has already enhanced advertising, gaming, and cloud services, with sufficient GPU reserves for model training. Tencent’s Q1 revenue reached 180.022 billion yuan ($25.1 billion), up 13% year-on-year, with adjusted net profit increasing 11%. Revenue from *Honor of Kings* and *CrossFire Mobile* hit new highs.  

Ma Huateng noted that AI capabilities have significantly boosted performance advertising and long-running games, while the company is also investing in new AI opportunities such as Yuanbao applications and WeChat’s AI features. The integration of Yuanbao AI into WeChat is in its very early stages, though user interaction with AI assistants is steadily increasing. The strong gaming performance partly stems from AI empowerment in massive multiplayer online games. Liu炽平 (Martin Lau) added that GPUs are prioritized for scenarios generating immediate returns, such as advertising, and the company uses software optimization and model customization to address GPU demand for inference.  

Hon Hai benefits from pre-tariff stockpiling, with Q1 sales up 24% year-on-year and net profit far exceeding expectations. Hon Hai’s Q1 net profit of NT$42.11 billion ($1.35 billion) exceeded forecasts, driven by strong demand for AI servers and other products, as well as customers accelerating orders to avoid potential U.S. tariffs. While sales are still expected to grow in 2025, the company forecasts a slower pace than its previous projection released in March.  

Poe report: DeepSeek usage drops 50%, while Kuaishou and OpenAI surge. Poe’s 2025 Spring AI Model Usage Trends Report shows DeepSeek R1’s usage rate fell from a peak of 7% in February to 3% by late April—a decline of over 50%. OpenAI saw a surge in usage due to GPT-4o’s new features like Studio Ghibli-style text-to-image generation. Kuaishou’s Kling series has rapidly risen in the text-to-video sector, capturing 21% market share within three weeks.  

Buffett explains his "retirement" decision: "I occasionally lose my balance and can’t remember names." Buffett admitted that age influenced his decision to hand over management of Berkshire Hathaway to Greg Abel. He said it would be unfair not to appoint Abel as CEO, adding that Berkshire benefits the longer Abel is in the role. "Suddenly, newspapers look like they’re printed with too little ink," he quipped, referring to vision challenges.  

#### Domestic Macro  

125% → 10%, 24% tariff suspended for 90 days: China adjusts tariffs on U.S. goods. Starting at 12:01 on May 14, China implemented tariff adjustments on U.S.-originated imports.  

U.S. adjusts tariffs on Chinese goods: Removes 91% of additional tariffs, lowers or cancels small package tariffs. According to Xinhua, the U.S. revoked 91% of additional tariffs on Chinese goods (including those from Hong Kong and Macau) under Executive Orders 14259 (April 8, 2025) and 14266 (April 9, 2025) at 00:01 ET on May 14. It also modified the 34% reciprocal tariffs under Executive Order 14257 (April 2, 2025), suspending 24% of them for 90 days and retaining the remaining 10%.  

April corporate loan rates hit historic lows. Market sources: Some banks’ consumer loan rates are below their breakeven points.  

China Securities Depository and Clearing Corporation (CSDC): Account verification is routine, not a special crackdown on off-exchange margin trading. A Shanghai Securities News reporter learned from CSDC that quarterly account verification with selected brokerages is a standard practice to confirm real-name usage of investor accounts. It is not a targeted measure against online rumors about "cracking down on off-exchange margin trading," and speculative reports are seriously inconsistent with facts. Investors are urged not to believe or spread rumors.  

Bank stocks hit new highs! How does public fund performance benchmarking affect bank stock allocations? Industrial Securities notes that active equity funds tracking benchmarks like the CSI 300 held only 3.81% of their portfolios in banks as of late 2024, compared to the CSI 300’s 13.67% weighting in the banking sector—a deviation of nearly 10 percentage points. Stocks like China Merchants Bank, Industrial Bank, ICBC, Bank of Communications, and Shanghai Pudong Development Bank are significantly underweighted.  

#### Domestic Companies/Industries  

The world’s largest IPO of the year! CATL plans to list at the upper price limit of HK$263, with institutional oversubscription 30x. As of May 14, CATL has secured over $50 billion (HK$390.2 billion) in institutional orders. Excluding cornerstone investments, this represents a 30x oversubscription. Estimates suggest its Hong Kong IPO could raise up to HK$41 billion ($5.26 billion), making it the largest IPO in Hong Kong since Kuaishou in 2021.  

After successful investments in Tesla, Alibaba, and Meituan, value investing giant Baillie Gifford is "very bullish" on ByteDance. Baillie Gifford believes ByteDance is currently the most promising company to invest in, predicting a fivefold return on investment amid current international dynamics. The firm notes it is unclear what defines true competitive advantages at the model level for companies today. If one could buy and hold a stock for 10 years, Bending Spoons might be the choice. Companies are warned of the dangers of "cramming investments"—for early-stage venture capital, neglecting ROE as a key consideration could become a hidden risk for corporate development.  

China’s best AI "enabler": Alibaba with a forward P/E ratio of 12. Morgan Stanley states that Alibaba Cloud is the only major Chinese cloud provider offering substantial GPU capacity to external clients, projecting its revenue growth will accelerate to 25% in fiscal 2026 and directly benefit from explosive AI inference demand. As an early adopter of AI, its e-commerce market share may stabilize, while it could open new markets in instant retail.  

Short-term worries are unwarranted—Xiaomi has "four利好" (four positive catalysts) ahead. Despite recent stock pressure from falling orders, Deutsche Bank views this as a temporary adjustment. The company has a backlog of 210,000 EV orders, indicating strong demand. Four catalysts—upcoming earnings reports, self-developed chips, an investor day, and the launch of a new SUV model—could drive a rebound in the next two months.  

Data centers don’t have to be on Earth: Chinese companies have sent computing facilities into space. At 12:12, 12 space computing satellites were successfully launched on a Long March 2D rocket from the Jiuquan Satellite Launch Center, forming the world’s first space computing constellation. Energy costs are a major component of traditional data centers, and space deployment offers an effective way to reduce such costs.  

Report: Pony.ai plans a secondary Hong Kong listing, with founders extending lock-up periods by 540 days. Sources say the company intends to apply for a confidential Hong Kong IPO, to which Pony.ai responded to Wall Street Insights by declining to comment. Meanwhile, founders announced a 540-day extension of their lock-up periods, with CEO Peng Jun stating the company is in a critical phase of Robotaxi mass production. Pony.ai’s pre-market stock surged 16% but closed down over 4%.  

Polysilicon "OPEC" formed: A 70 billion yuan fund to clear过剩产能? Six major polysilicon firms, including Tongwei, GCL-Poly, and Daqo, plan to establish a 70 billion yuan fund to acquire and integrate excess industry capacity. The goal is to raise polysilicon prices from the current 36,000 yuan/ton to a reasonable range of 45,000–60,000 yuan/ton through "production curbs and price controls." China’s current polysilicon capacity is about 3 million tons, while market demand is only around 1.56 million tons, indicating severe overcapacity.  

#### Overseas Macro  

The broken logic behind the rally: Will the U.S. see a stock-bond-currency rout this summer? Citi notes that the narrative for U.S. assets is shifting from tariff issues to fiscal crises. As DOGE (likely a typo for "discretionary spending") cuts shrink and tariff revenues decline, the U.S. fiscal budget process could reignite a surge in term premiums, leading to a "triple kill" of falling stocks, rising bond yields, and a weaker dollar.  

What is the market signaling? As the Nasdaq surges, U.S. bond yields near highs while the dollar falls. Analysts suggest the U.S. stock rebound may be a superficial rally. The unusual rise in bond yields and their divergence from the dollar point to structural fiscal issues in the U.S., potentially hinting at deeper risks of a dollar collapse. With the U.S. government planning to issue over $2 trillion in Treasuries, a lack of buyers could force the Fed to restart balance sheet expansion.  

Relieved trade tensions could turn this year’s U.S. stock "losers" into "winners." Citi and JPMorgan both favor underperforming U.S. stock sectors this year, including small caps, tech hardware, and homebuilders, arguing that easing trade tensions, catch-up effects, and short-covering could drive short-term rebounds.  

Market focus shifts to the U.S. tax cut bill. House Republican leaders plan to submit the bill to the full House for a vote before Memorial Day, followed by Senate consideration. Trump hopes to sign it into law by July 4. The bill is estimated to add $3.7 trillion to the U.S. fiscal deficit over a decade, including extending the 2017 tax cuts, significantly increasing border security spending, and cutting multiple social welfare programs—though Republican lawmakers remain divided on details.  

How much oil price does Trump want? Goldman Sachs has figured it out. Goldman’s analysis shows Trump has posted nearly 900 times about oil and U.S. energy dominance. He tends to call for price cuts when WTI exceeds $50 and price hikes when it drops below $30.  

#### Overseas Companies  

Super Micro Computer surges again after signing a $20 billion AI deal with Saudi DataVolt. Saudi Arabia’s DataVolt signed a multi-year partnership with Super Micro Computer, a once-struggling U.S. AI server and high-performance computing platform maker. Super Micro’s stock surged nearly 20% intraday on Wednesday, closing up 15.7%.  

Bridgewater Associates cut holdings in Google, Nvidia, Meta, etc., in Q1, bought gold, added JD.com, and increased stakes in Alibaba and Baidu. In Q1, Bridgewater purchased over $300 million in gold ETFs, over $100 million in JD.com, Chubb Insurance, and Goldman Sachs. It increased holdings in Alibaba, Baidu, and Booking, while clearing positions in ON Semiconductor, Moderna, Lyft, and Chewy. It also reduced holdings in the SPDR S&P 500 ETF, Google (Alphabet), Nvidia, AppLovin, and Meta.  

#### Industries/Concepts  

1. **Sensors**: Sensors are critical for humanoid robots to interact with the environment, with force sensors being particularly important and valuable. Torque sensors currently have high barriers in design, craftsmanship, and testing. As domestic manufacturers improve technology and robot产业化 (industrialization) drives cost reduction, their addressable market is expected to expand.  

2. **Shipbuilding**: Based on 2024 full-year and 2025 Q1 industry performance, the proportion of high-price, low-cost orders in shipyards’ delivery portfolios has continued to rise, with previous burdens gradually clearing and profits entering an upward inflection point. The shipbuilding industry faces a significant supply-demand gap, with global shipyards’ order backlogs covering 3.8 years and leading yards’ production schedules extending beyond 2028.  

3. **Nonferrous Metals**: Debon Securities notes that major nonferrous metal prices have performed strongly. Trump’s tariff policies have raised inflation expectations, keeping gold prices elevated, while March (typically a peak demand month) saw sustained inventory declines and strong copper/aluminum prices, enhancing expectations for related companies’ earnings under high price levels.  

4. **Exoskeleton Robots**: Guotai Junan Securities points out that exoskeleton robots have been applied in military, industrial, and medical fields, with products gradually moving into consumer markets and offering vast market potential. Exoskeleton robots consist of five main systems, with sensing, control, and drive systems serving as the core for human-computer interaction.  

### Upcoming Key News (May 15 Onward)  

- China’s central bank cuts the reserve requirement ratio (RRR) by 0.5 percentage points for financial institutions and by 5 percentage points for auto finance companies and financial leasing companies.  

- Eurozone and UK Q1 GDP data.  

- U.S. April PPI.  

- U.S. April retail sales.  

- U.S. initial jobless claims last week.  

- U.S. April industrial production.  

- Speeches by Fed Chair Powell and Fed Governor Barr.  

- IEA monthly crude oil market report.  

- Alibaba’s earnings report.  

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