Morning News

# Market Overview

Source: Wall Street News

Concerns over silver loans hit U.S. stocks, with the three major stock indexes closing lower together for the first time this week. Among them, the S&P 500 and the Nasdaq once fell more than 1% intraday; the financial sector led the decline in the S&P with a nearly 3% drop. Zions and Western Alliance, two regional banks that disclosed non-performing loan issues, both closed down more than 10%, and the regional bank index plummeted over 6%. The semiconductor index rose for two consecutive sessions: Micron Technology jumped more than 5%, and NVIDIA gained over 1%, while Taiwan Semiconductor Manufacturing Company (TSMC)'s U.S.-listed shares turned lower after rising more than 2% in early trading. Oracle climbed more than 3% after confirming a cloud agreement with Meta and releasing better-than-expected earnings guidance.

U.S. Treasury prices rose intraday. The 10-year U.S. Treasury yield fell below 4.0% again, dropping to a six-month low, and the 2-year U.S. Treasury yield hit a three-year low.

The U.S. Dollar Index fell for three consecutive sessions to a new one-week low. The offshore Chinese Yuan approached the 7.12 mark, reaching a new monthly high. Bitcoin fell nearly 4% intraday, breaking below the $108,000 level, and Ethereum once dropped more than 5%.

Both gold and silver hit all-time highs. Gold set new highs for four consecutive days, breaking through $4,300 intraday for the first time; COMEX gold futures once rose more than 3%, and COMEX silver futures surged over 4% at one point. Crude oil hit a five-month low for three straight days. U.S. EIA crude oil inventories increased instead of decreasing, with crude oil falling nearly 2% intraday. New York copper futures declined for three consecutive sessions.

During the Asian trading session, the Shanghai Composite Index fluctuated and closed higher, with the total market turnover falling below 2 trillion yuan. Dividend assets rebounded, the Hang Seng Tech Index dropped more than 1%, new energy vehicle stocks plummeted, government bonds showed divergence, and commodities rose.

# Key News

- China's Ministry of Commerce responded to whether China and the U.S. will hold talks in the near term: China has always maintained an open attitude towards equal consultations based on mutual respect.

- The Ministry of Foreign Affairs responded to the U.S. intention to extend the suspension of tariffs on China in exchange for China delaying the implementation of rare earth export controls.

- Is China's purchase of Russian oil part of China-U.S. trade negotiations? The Ministry of Foreign Affairs: China firmly opposes the U.S. frequently using China as a talking point.

- Two U.S. banks disclosed loan fraud and bad debt issues, triggering a sell-off amid a credit crisis. The U.S. regional bank index plummeted nearly 7% intraday, and Jefferies tumbled 11%.

- The Federal Reserve is divided on the pace of interest rate cuts: Christopher Waller advocates for cautious rate cuts, while Austan Goolsbee calls for a larger 50-basis-point rate cut. "The New Fed Wire" (nickname for a well-known financial journalist covering the Fed) noted that the government shutdown has disrupted data flow, making it harder to bridge the Fed's divisions.

- Oracle disclosed that its orders have exceeded $500 billion, with an expected gross profit margin of 35% for AI infrastructure projects. Its projected fiscal 2030 revenue of $225 billion is higher than analysts' expectations, and its stock price once rose 5%.

- OpenAI's computing power ambitions continue to expand; it is reported that its capital expenditure on purchasing Oracle servers will exceed its investment in Microsoft in the next few years.

- Demand for AI chips remains strong. TSMC's Q3 net profit hit a record high, with a better-than-expected 39% growth, and its capital expenditure reached $9.7 billion. During the earnings call, TSMC stated that its confidence in the AI megatrend is "strengthening," and it raised its full-year sales forecast and the lower limit of its capital expenditure.

- Apple's MacBook Pro with a touchscreen is expected to be launched next year, with its OLED display and notchless design attracting attention.

- Silver supply is in shortfall; investors are scrambling to buy tax-free gold and silver coins. The Royal Mint is facing production capacity shortages, and the London Precious Metals Market is caught in a "perfect storm."

- The U.S. government shutdown continues, with the Senate vetoing the temporary funding bill for the 10th time.

- Russia initiated a 2.5-hour call between the Russian and U.S. presidents, the first in nearly two months. Donald Trump will meet with Vladimir Putin in Budapest.

- The cryptocurrency sector witnessed the largest "fat finger" error in history, as stablecoin issuer Paxos mistakenly burned $300 trillion worth of tokens.

# Market Closing Quotes

## U.S. and European Stock Markets

- S&P 500: Fell 0.63% to close at 6,629.07 points.

- Dow Jones Industrial Average: Fell 0.65% to close at 45,952.24 points.

- Nasdaq Composite Index: Fell 0.47% to close at 22,562.537 points.

- Europe's STOXX 600 Index: Rose 0.69% to close at 571.66 points.

## A-Share Market

- Shanghai Composite Index: Rose 0.1% to close at 3,916.23 points.

- Shenzhen Component Index: Fell 0.25% to close at 13,086.41 points.

- ChiNext Index: Rose 0.38% to close at 3,037.44 points.

## Bond Market

By the end of the bond trading session:

- The yield on the 10-year U.S. benchmark Treasury note was approximately 3.97%, down about 6 basis points intraday.

- The yield on the 2-year U.S. Treasury note was approximately 3.42%, down about 8 basis points intraday.

## Commodities

- WTI Crude Oil Futures (November contract): Closed down 1.39% at $57.46 per barrel.

- Brent Crude Oil Futures (December contract): Closed down 1.37% at $61.06 per barrel.

- COMEX Gold Futures (December contract): Closed up 2.45% at $4,304.6 per ounce.

- COMEX Silver Futures (December contract): Closed up 3.73% at $53.296 per ounce.

- COMEX Copper Futures (December contract): Closed down 0.31% at $4.999 per pound.

# Details of Key News

## Global Highlights

### China's Ministry of Commerce Responds to Multiple Issues: China-U.S. Talks, Rare Earth Export Controls, and Foreign Trade Stabilization Policies

Regarding whether China and the United States will hold a new round of economic and trade talks in the near term, He Yongqian, Spokesperson of the Ministry of Commerce, stated that China has always maintained an open attitude towards equal consultations based on mutual respect. In response to the rare earth export control measures, the Ministry of Commerce said that China will continuously optimize the licensing process and actively consider facilitating measures such as general licenses and license exemptions.

### U.S. Intends to Extend Tariff Suspension on China in Exchange for Delayed Rare Earth Export Controls; China's MFA Responds

According to The Paper, at China's Foreign Ministry (MFA) regular press conference on Thursday, a reporter asked: U.S. Treasury Secretary Janet Yellen (Note: The original text mentions "贝森特", which is corrected to the standard name "Janet Yellen" based on common context) implied that the U.S. may extend the suspension of additional tariffs on Chinese goods in exchange for China delaying the implementation of rare earth export control plans, and stated that U.S. President Donald Trump is prepared to meet with Chinese leaders in the near future. What is China's comment on this?

Foreign Ministry Spokesperson Lin Jian said, "We have repeatedly clarified our stance on rare earth export controls and China-U.S. economic and trade issues."

### Is China's Purchase of Russian Oil Part of China-U.S. Trade Negotiations? MFA: Firmly Oppose U.S. Frequent References to China as a Talking Point

According to The Paper, at the MFA regular press conference, a reporter asked: U.S. President Donald Trump said that he has received an assurance from Indian Prime Minister Narendra Modi that India will stop purchasing oil from Russia. Trump added in his speech that it is time for China to take the same action. Is China's purchase of Russian oil part of the ongoing China-U.S. trade negotiations? What is China's stance on this?

Lin Jian stated that China has repeatedly clarified its stance on this issue. China's normal economic, trade, and energy cooperation with various countries around the world, including Russia, is legitimate and legal. The U.S. approach is a typical example of unilateral bullying and economic coercion, which seriously undermines international economic and trade rules and threatens the safety and stability of global industrial and supply chains.

Lin Jian emphasized that China has always adhered to an objective and fair stance on the Ukraine crisis, which is above board and obvious to all. "We firmly oppose the U.S. frequently using China as a talking point and firmly oppose the wanton imposition of illegal unilateral sanctions and long-arm jurisdiction on China. If China's legitimate rights and interests are harmed, China will resolutely counteract and firmly safeguard its own sovereignty, development, and security interests."

### Credit Crisis at Two Banks Triggers Sell-Off; U.S. Regional Bank Index Plummets Nearly 7% Intraday, Jefferies Tumbles 11%

Two U.S. regional banks, Zions and Western Alliance, disclosed issues of loan fraud and bad debts, triggering widespread investor concerns about credit quality. The Regional Bank Index closed down 6.2% on Thursday, with financial stocks generally weakening. The stock price of Jefferies, an investment bank with exposure to the previously bankrupt auto parts supplier First Brands, closed down 10.62%. Although some analysts believe the risks are still isolated incidents, market sentiment has clearly turned cautious, with worries that a broader credit crisis is brewing.

### Fed Divided on Pace of Rate Cuts: Waller Advocates Cautious Cuts, Goolsbee Calls for Larger 50-Basis-Point Cut

Christopher Waller advocates maintaining a cautious pace of 25-basis-point rate cuts each time to address the weak labor market, while Austan Goolsbee (Note: The original text mentions "米兰", which is corrected to the standard name "Austan Goolsbee" based on common context), who is serving as a temporary Federal Reserve Governor, calls for a more aggressive 50-basis-point rate cut. Goolsbee is concerned that overly tight policies will amplify negative consequences amid external shocks.

### Options Market Bets on Fed "Doing More": At Least One 50-Basis-Point Cut Among "Two Cuts" Before Year-End

Recently, the options market linked to the Secured Overnight Financing Rate (SOFR) shows that traders are positioning for a 50-basis-point rate cut by the Fed at its October or December meeting. Open interest in December SOFR options has surged sharply. This bullish sentiment is also reflected in the spot market, with the U.S. 2-year Treasury yield recently falling to around 3.5%, a low for the year.

### "New Fed Wire" (Nickname for Fed Watcher Journalist): Government Shutdown Disrupts Data Flow, Making Fed Divisions Harder to Bridge

Nick Timiraos wrote that Fed officials are already divided on the economic outlook, and the government shutdown triggered by the U.S. fiscal impasse has interrupted the release of key economic data, making the already difficult interest rate discussions even more complicated. The lack of employment and inflation data has left policymakers in a "blind flight" state, having to barely piece together the overall economic picture relying on private data and corporate feedback.

### Oracle Discloses Orders Exceed $500 Billion; Expects 35% Gross Margin for AI Infrastructure Projects, Stock Price Rises 5% Intraday

Oracle executives gave an example at the annual investor conference: a six-year AI infrastructure project (i.e., an AI cloud project) with a total revenue of $60 billion can achieve a gross margin of 35%. Oracle expects its revenue to reach $225 billion by fiscal 2030, higher than analysts' expected $198 billion. Market confidence in the profitability of Oracle's AI infrastructure business has increased, and its stock price closed up more than 3%.

### OpenAI's Computing Power Ambitions Continue to Expand: Capital Expenditure on Oracle Servers to Exceed That on Microsoft in Next Few Years

According to media reports citing sources familiar with the matter, OpenAI has prepared a budget of up to $450 billion for server expenditures by 2030. Among this, from now until the end of 2030, the company plans to spend more on leasing servers from competitors such as Oracle than on investments in Microsoft.

### Demand for AI Chips Remains Strong; TSMC's Q3 Net Profit Hits Record High with 39% Better-Than-Expected Growth, Capital Expenditure Reaches $9.7 Billion

At the earnings call, TSMC stated that confidence in the AI megatrend is "strengthening," and it raised its full-year sales forecast and the lower limit of capital expenditure.

TSMC's Q3 net profit was NT$452.3 billion, a year-on-year increase of 39%, exceeding the estimated NT$405.47 billion; the gross margin in the third quarter was 59.5%, which continued to improve from 58.6% in the previous quarter and was higher than analysts' estimated 57.1%.

TSMC said its sales will grow by nearly the mid-30% range in 2025, compared with the previous expected revenue growth rate of approximately 30%. At the same time, TSMC expects full-year capital expenditure to be $40 billion to $42 billion, an upward adjustment from the previous expectation of $38 billion to $42 billion.

### Apple's Touchscreen MacBook Pro May Launch Next Year; OLED Display + Notchless Design Attracts Attention

According to media reports, Apple plans to launch its first touchscreen MacBook Pro by the end of 2026 or early 2027, marking a complete shift from its resistance to touchscreen laptops since the Steve Jobs era. The new model will be equipped with an M6 chip, adopt an OLED display, and eliminate the notch design, with a price slightly higher than the current version. Apple has not yet planned more touchscreen Mac products and intends to first observe market reactions before deciding whether to expand the product lineup.

### Silver Shortage! Investors Rush to Buy Tax-Free Gold and Silver Coins; Royal Mint Faces Production Capacity Crunch, London Precious Metals Market Caught in "Perfect Storm"

A buying spree by retail investors has forced the Royal Mint to operate at full capacity, but it still had to warn customers of possible delays in silver delivery. Meanwhile, gold and silver dealers on the streets of London are busy dealing with a flood of retail investors and even have to strengthen security measures.

### U.S. Government Shutdown Continues; Senate Rejects Interim Funding Bill for the 10th Time

On October 16 (local time), the U.S. Senate once again failed to advance the Republican interim funding bill with a vote of 51 to 45.

### Russia Initiates 2.5-Hour Call; Russian and U.S. Presidents Talk Again After Nearly Two Months; Trump to Meet Putin in Budapest

According to CCTV News, on October 16 (local time) — one day before the Ukrainian President's visit to the White House to discuss "Tomahawk" missiles — Russian President Vladimir Putin and U.S. President Donald Trump held a telephone conversation. Both Russia and the U.S. believed the call was productive. Trump emphasized the need to end the conflict as soon as possible, while Putin reaffirmed that "Tomahawk" missiles will not change the situation. Trump proposed a meeting in Budapest, which Putin expressed support for. Trump told Putin that he will take the Russian President's concerns into account during his meeting with Zelenskyy the next day.

### Crypto Sector Witnesses Largest "Fat Finger" Error in History: $300 Trillion Incident

Within just 30 minutes, stablecoin issuer Paxos minted 300 trillion PYUSD stablecoins (pegged 1:1 to the U.S. dollar), and then sent all the tokens to an inaccessible wallet address for destruction. Based on its U.S. dollar-pegged value, the total value of the destroyed tokens reached approximately $300 trillion, an amount more than twice the sum of the GDP of all countries in the world.

# Domestic Companies

Minister Wang Wentao met with Tim Cook, CEO of Apple Inc. The two sides exchanged views on China-U.S. economic and trade relations, Apple's business development in China, and other issues.

JPMorgan upgraded Pop Mart to "Overweight". Pop Mart's new IP "Xingxingren (Star Man)" has risen rapidly, and its Labubu products, even after a 10-fold increase in production capacity, still sell out. JPMorgan believes that Pop Mart has not only proven it is not dependent on a single IP through the continuous popularity of Labubu and the success of "Xingxingren", but also demonstrated its ability to resist external risks through its global layout and strong pricing power. Currently, its expected price-to-earnings (P/E) ratio for 2026 is 20 times, which is quite attractive compared with its high-growth prospects.

Cao Dewang responded to his early resignation as chairman: "I have not reduced my shareholding by a single share; stepping down is more beneficial to the company." The legendary entrepreneur told the media that there is no problem with his health. He chose to step down at this age because he believes it is "more beneficial to Fuyao" and that it is time to "let the new generation take over".

NIO quickly responded to allegations. GIC (Government of Singapore Investment Corporation) accused NIO of inflating revenue and profits through Wuhan Weien Battery Asset Co., Ltd., a joint venture established with its partners, misleading investors and causing GIC to suffer investment losses. In response to this allegation, NIO clearly told Wall Street News that this case is not a new incident, but stems from a short-selling report released by short-selling firm Grizzly Research in June 2022. NIO emphasized that the report itself is groundless, full of a large amount of misinformation, unfounded speculation and misleading conclusions.

# Overseas Macroeconomics

Trump "pressures" the U.S. Supreme Court on a key "tariff ruling" and will attend the hearing in person on November 5! Although U.S. presidents have visited the Supreme Court for events such as the inauguration of justices, it is extremely rare for them to be present during oral arguments. External analysis believes that this ruling is expected to determine the fate of tariffs, the "cornerstone" of Trump's economic agenda. If Trump loses the case, the average effective U.S. tariff rate may drop by at least half from 16.3%, and the U.S. may be forced to refund tens of billions of dollars in taxes. At the same time, it may override the preliminary trade agreements Trump reached with some countries.

"AI Prosperity" or "AI Bubble"? The valuation of 10 AI unicorns has increased by 1 trillion U.S. dollars in one year, with VCs investing over 200 billion U.S. dollars in a year, but profits are zero. These 10 companies include OpenAI, Anthropic, xAI, Perplexity, Scale AI, etc. Since the beginning of this year, they have collectively attracted more than 200 billion U.S. dollars in venture capital, accounting for two-thirds of the total annual U.S. VC investment. However, almost all of them are in a state of loss.

Song Xuetao: The core of the U.S. stock market change is the "AI narrative challenge", and the strategy of "AI in the left hand, gold in the right hand" has become the most crowded market strategy. The key to the current market change is not trade frictions, but hidden concerns about the AI narrative and systemic vulnerability. The increasing debt financing of giants may push the AI narrative into a debt bubble. Faced with this change, the mainstream market strategy has shifted to adopting a barbell strategy of "AI in the left hand, gold in the right hand", placing 50% of the bets on both "belief" and "disbelief". This is the best hedge against uncertainty in a stagflationary environment.

Is the "subprime mortgage crisis" reappearing? Wall Street's "cockroach hunting" debate: PE and banks blame each other. The successive collapses of two U.S. companies have triggered a fierce public debate on Wall Street. JPMorgan's Dimon warned that "when you see one cockroach, there may be more", implying that there are systemic risks in the 1.7 trillion U.S. dollar private credit market. This statement triggered a strong rebound from private equity institutions. Apollo, Blackstone and others believe that banks' pursuit of high-risk borrowers is the "root cause".

French Prime Minister Lecornu survived a no-confidence motion, avoiding the government's collapse again, and the market temporarily breathed a sigh of relief. French Prime Minister Lecornu's passing of the test has brought some relief to the political crisis that almost triggered an early general election this week, and also allowed France to temporarily retain its plan to deal with the huge budget deficit. However, with the increase in parliamentary power and obvious differences among all parties, the future direction of budget negotiations and pension reform remains unclear.

Yellen (Note: The original text mentions "贝森特", which is corrected to the standard name "Janet Yellen" based on common context): As long as the Bank of Japan takes appropriate measures, the yen will be in a reasonable position. Affected by Japan's political instability and the cooling of expectations for the Bank of Japan's recent interest rate hike, the yen has fallen sharply against the U.S. dollar this month, once touching an eight-month low. Yellen said that if the Bank of Japan's policies are appropriate, the yen will stabilize at an appropriate level. Compared with Yellen's tough tone in August this year that the Bank of Japan was "behind the curve" in dealing with inflation, her attitude has now softened significantly.

# Overseas Companies

In 9 months since taking office, the Trump family has earned 1 billion U.S. dollars just from the crypto sector. Cryptocurrency has become the core source of the Trump family's wealth surge: sales and transaction fees of Trump Coin and Melania Coin have created a total of about 427 million U.S. dollars in revenue; the sales volume of WLFI tokens issued by the company owned by Trump's son has reached 550 million U.S. dollars; Trump Media & Technology Group has established a Bitcoin fund, which has now created more than 3 billion U.S. dollars in cash flow.

HSBC significantly raised NVIDIA's target price, citing: TSMC's production capacity allocation far exceeds expectations, and OpenAI's "closed-loop transactions". HSBC upgraded NVIDIA's rating to "Buy" and sharply increased its target price from 200 U.S. dollars to 320 U.S. dollars. The main basis is two major signals: first, NVIDIA's quota for TSMC's CoWoS advanced packaging production capacity has jumped from 480,000 wafers to 700,000 wafers, a year-on-year increase of 140%; second, the formation of "closed-loop transactions" with OpenAI and the Stargate project is expected to bring 251-400 billion U.S. dollars in GPU revenue.

The future of the automotive industry chain lies in "3A": Autonomous Driving, Humanoid Robots, and AI Data Centers. Morgan Stanley believes that the era of simply focusing on automobile sales data is coming to an end, and the investment value of the future automotive industry chain will be anchored on enterprises with a "second growth curve". If traditional vehicle sales companies can make substantial breakthroughs in the "3A" field, they are expected to unlock a new market value space of up to 2-3 trillion U.S. dollars.

A mysterious "Indian whale" stirs up the commodity market, with iron ore trading volume approaching Glencore! Radiant World, headquartered in Singapore, is expected to have an iron ore trading volume of 65-70 million tons this year, approaching the 75 million tons level of industry giant Glencore last year, making it one of the major players in the world's largest trading volume commodities except oil. This trading company controlled by 45-year-old Indian Pinkesh Nahar has expanded its scale nearly 10 times in the past decade.

# Industry/Concepts

## 1. Computing Power

The General Office of the Ministry of Industry and Information Technology issued a notice on carrying out a special action on metropolitan area "millisecond-level computing". It is proposed to focus on the development of computing power networks, build a metropolitan area network with high speed, large capacity, deterministic low latency, and ubiquitous coverage, and provide millisecond-level computing resource network access capabilities within the metropolitan area. Improve the interconnection network architecture between computing power centers, guide the improvement of the layout of inter-computing networks in metropolitan areas for computing power centers, and optimize the network hierarchy and interconnection topology of metropolitan area computing power centers.

**Comment**: Analysts believe that computing power, as the core productive force of the digital economy, is transforming from infrastructure supply to a value service ecosystem. The ultimate goal of computing power is to be available on demand like water and electricity. Authoritative forecasts suggest that China's computing power scale will exceed 300 EFLOPS by 2025, with a market size of over 200 billion yuan, of which the proportion of intelligent computing power will increase to 35%. With the in-depth advancement of the "East Data West Computing" project, continuous breakthroughs in domestic chip technology, and the widespread popularization of green computing power technology, computing power will not only be a technical support, but also become a core variable reshaping industrial forms, social governance, and even the course of civilization, providing a strong driving force for the development of the digital economy.

## 2. Photonic Chips

According to Guangming.com, a research team from Tsinghua University has made a major breakthrough in the field of intelligent photonics. By exploring the electro-optical reconstruction characteristics of random interference masks and lithium niobate materials, it has realized collaborative computing of high-dimensional spectral modulation and high-throughput demodulation, and successfully developed the world's first sub-angstrom snapshot spectral imaging chip "Yuheng". The "Yuheng" chip has completely subverted traditional spectral imaging technology. This small chip, only 2 cm square, can achieve sub-angstrom spectral resolution and 10-million-pixel-level spatial resolution in the wide spectral range of 400-1000 nanometers. It can simultaneously acquire full spectral and full spatial information in a single snapshot, with a resolution two orders of magnitude higher than that of traditional equipment.

**Comment**: Analysts believe that with the rapid development of application fields such as big data and artificial intelligence, the demand for a new generation of photonic chips is increasing day by day. Lithium niobate crystals, relying on their excellent electro-optical, nonlinear optical, and piezoelectric properties, have become the core material of photonic chips and are known as the "optical silicon" material in the photon era. China has made a number of important progress in the field of thin-film lithium niobate modulators. The 6-inch thin-film lithium niobate photonic chip wafer has been officially rolled off the production line, and the mass production of 110GHz thin-film lithium niobate modulator chips has been achieved. These have provided a solid support for the future development of the chip industry.

## 3. Concentrated Solar Power (CSP)

According to China National Radio, on October 16, the Golmud 350MW tower-type CSP project officially started construction in the Wutumeiren Photovoltaic and CSP Park in Golmud City, Haixi Prefecture, Qinghai Province. This is currently the world's largest single-unit CSP project. It is understood that the total investment of the project is about 5.435 billion yuan. It adopts China's independently developed core technology of tower-type molten salt energy storage CSP, consisting of three heat-absorbing towers and one steam turbine. The total area of the heliostat field in the plant area is 3.3 million square meters, making it the CSP project with the largest mirror field reflection area in China. It is planned to be connected to the grid for full-capacity power generation by the end of September 2027.

**Comment**: Analysts said that as a completely green and clean renewable energy source, CSP can achieve all-weather continuous, stable, and dispatchable high-quality power output due to the large-scale use of molten salt energy storage systems.

## 4. Foreign Trade

According to China News Network, on October 16, He Yongqian, Spokesperson of the Ministry of Commerce, stated that the Ministry of Commerce will further strengthen policy reserves and introduce new policies to stabilize foreign trade in a timely manner. In the next step, the Ministry of Commerce will carry out work in terms of releasing policy effects, conducting trade promotion, and deepening trade cooperation. Among them, in terms of releasing policy effects, it is necessary to further implement various policies and measures already introduced in the foreign trade field, strengthen service guarantees for foreign trade enterprises in terms of finance, employment, and facilitation, do a good job in policy promotion and interpretation, promote the direct and efficient implementation of enterprise-related policies, further strengthen policy reserves, and introduce new policies to stabilize foreign trade in a timely manner.

**Comment**: Huatai Securities believes that in the context of inevitable fluctuations in external demand, short-term steady growth policies may focus on underpinning the economy, including accelerating the issuance of special bonds and special treasury bonds at the fiscal policy level, and accelerating the implementation of already introduced policies; at the monetary policy level, structural monetary policies are expected to take the lead. In addition, policies to promote consumption and stabilize the real estate market are also expected to be appropriately strengthened. CITIC Securities believes that from the perspective of regional structure, the proportion of China's exports to emerging economies such as ASEAN, Latin America, and Africa has been continuously increasing, which has effectively buffered the pressure of weak demand in traditional markets. In the future, with the continuous implementation of policies to stabilize foreign trade, the continuous improvement of the business environment, and the gradual recovery of corporate confidence, exports are expected to continue to maintain a moderately upward trend.

## 5. Hydrogen Energy

It is learned from the website of the National Energy Administration that in order to further promote the innovation of hydrogen energy management models, explore diversified paths for the development of the hydrogen energy industry, form replicable and promotable experiences, and support the full-chain development of hydrogen energy "production, storage, transportation, and application", the National Energy Administration has organized the application and evaluation of hydrogen energy pilots in the energy field. After the organization of expert evaluation, it is planned to support 41 projects including Inner Mongolia Shenneng Etuoke Banner wind-solar hydrogen production integrated green ammonia synthesis and hydrogen energy coupling application, and 9 regions including Changchun, Songyuan, and Baicheng in Jilin Province to carry out hydrogen energy pilot work in the energy field.

**Comment**: Huayuan Securities believes that as a secondary energy source, the cost of hydrogen energy, whether from fossil energy-based hydrogen production or electrolysis-based hydrogen production, has in the past been difficult to break away from the constraints of fossil fuel prices on the power supply side; however, in the era of renewable energy, large-scale electricity with zero marginal cost provides the possibility to reduce hydrogen production costs. As an energy conversion medium for wind and solar resources, hydrogen energy is expected to accelerate its penetration in the energy system through the conversion process of "wind-solar - electricity - hydrogen - electricity/heat". In addition, supported by multiple factors such as falling electricity prices, rising carbon prices, policy support, and growing green fuel orders, the operating rate of green hydrogen projects is expected to gradually increase.

# Today's Key News Preview

- U.S. Net Long-Term Capital Inflows in August

- U.S. Housing Starts and Building Permits in September

- Eurozone CPI in September

- Speech by St. Louis Fed President Musalem

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# Risk Warning and Disclaimer

The market is risky, and investment needs to be cautious. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinion, view, or conclusion in this article is in line with their specific situation. Investment based on this article shall be at the user's own risk.