Morning News

Source: Wall Street News

**Market Overview**

Investors are hopeful that the trade tensions will ease, leading to a rebound in US stocks. The Nasdaq Composite Index rose nearly 3%. The China stock index closed up 3.7%, with Alibaba rising more than 5%.

Tesla closed up more than 4%. After the post - market financial report, its stock price first fell and then rose, climbing more than 4%. After the US stock market closed, Trump said he had no intention of firing Powell, which drove the S&P 500 to rise 1.7% and the Nasdaq 100 to increase 1.8% in after - hours trading.

In response to the trade news, the yield on the 10 - year US Treasury bond hit a new daily low, the US dollar index accelerated its rebound, and the Swiss franc fell more than 1% intraday. Bitcoin once rose nearly $5,000, breaking through $91,000.

Gold rose more than 2% intraday, reaching a new high. Later, the trade news prompted funds to withdraw from safe - haven assets, causing gold to plummet from its high and once turn to a decline of more than 1%. Copper on the New York Mercantile Exchange rose more than 3% intraday. US oil once rose more than 3%.

During the Asian session, the A - share market showed a divergent trend. The Shanghai Composite Index once stood above 3,300 points. The Hang Seng Index in Hong Kong rose in the afternoon, with biopharmaceutical stocks soaring and the treasury bond futures strengthening across the board.

**Key News**

A series of policies to expand domestic demand are on the way! Places like Guangdong and Shanghai are planning to introduce the *Special Action Plan for Boosting Consumption*.

Tesla's Q1 profit plummeted 40%, far below expectations. It blamed the uncertain trade policy and still plans to start producing new low - price cars and other models in the first half of the year. Musk said that starting from May, he will "significantly" withdraw from DOGE and devote more time to Tesla. Tesla's stock rose more than 4% after hours.

Trump said he has no intention of firing Powell and now is an excellent time to cut interest rates, which drove the US stock market to rise after hours.

It is reported that US Treasury Secretary Besent said that the tariff deadlock is unsustainable. Another report said that the Trump administration is "close" to reaching trade agreements with Japan and India, but it may still take several months to reach a final trade deal.

The finance ministers of the United States and Japan are about to meet to jointly discuss "monetary issues". The Japanese yen has strengthened and broken through 140. Citi believes that it is difficult for the two sides to reach a so - called "Plaza Accord 2.0". In the first two weeks of April, Japanese institutions sold more than $20 billion in foreign - denominated bonds, the largest scale in 20 years.

The "strike" of US Treasury bond buyers has begun: in the 2 - year US Treasury bond auction, overseas demand hit a two - year low, which was the most severe period of the Silicon Valley Bank crisis.

The US dollar is severely "oversold", with dense short positions and support from interest rate differentials. It may have a "technical rebound" at any time, which may affect gold.

Goldman Sachs is bullish on Cambricon: the cloud chip market is booming, the shipment volume may exceed one million pieces in 2028, and the stock price can still rise 76%!

POP MART's Q1 revenue increased 1.7 times year - on - year, and the revenue in the Americas market soared 9 times year - on - year.

**Market Closing Report**

- **European and American Stocks**: The Dow Jones Industrial Average rose 2.66%, the S&P 500 Index rose 2.51%, and the Nasdaq Composite Index rose 2.71%. The European STOXX 600 Index closed up 0.25%.

- **A - Shares**: The Shanghai Composite Index rose 0.25%, the Shenzhen Component Index fell 0.36%, and the ChiNext Index fell 0.82%.

- **Bond Market**: The yield on the 10 - year US Treasury bond fell 1.96 basis points to 4.3910%. The yield on the 2 - year US Treasury bond rose 5.04 basis points to 3.8106%.

- **Commodities**: COMEX gold futures fell 1.06% to $3,389.00 per ounce. WTI May crude oil futures closed up 1.95% to $64.31 per barrel.

**Details of Key News**

**Global Highlights**

A series of policies to expand domestic demand are on the way! Places like Guangdong and Shanghai are planning to introduce the *Special Action Plan for Boosting Consumption*. Since the beginning of this year, a series of policies in China to expand domestic demand and promote consumption have taken effect, strengthening the domestic big cycle and further unleashing the vitality of China's super - large - scale market. On April 22nd, Guangdong reviewed the *Implementation Plan of the Special Action for Boosting Consumption in Guangdong Province*, emphasizing the need to strengthen and expand the trade - in policy for consumer goods. On April 21st, the Shanghai meeting basically agreed on the *Special Action Plan for Boosting Consumption in Shanghai*.

Tesla's Q1 profit plummeted 40%, far below expectations. It blamed the uncertain trade policy and still plans to start producing new low - price cars and other models in the first half of the year. Musk said that starting from May, he will "significantly" withdraw from DOGE and devote more time to Tesla.

In the first quarter, Tesla's revenue decreased by 9% instead of increasing, and its EPS was more than 60% lower than the analyst's expectation. The automotive revenue decreased by 20%. The energy storage business is still strong, with the deployment installed capacity increasing by 154%, and the Powerwall installed capacity reaching a new high for four consecutive quarters. However, Tesla pointed out that the impact of the tariff situation on the energy business is greater than that on the automotive business. Tesla still plans to start producing new low - price cars and other models in the first half of the year, and no longer expects the car delivery volume to return to growth this year. It said that the second - quarter report will update this year's guidance, and the changes in trade policies and political sentiment may seriously affect the company's product demand in the short term. The stock price once fell more than 1% after hours and then turned up. After Musk's speech, it rose more than 5% after hours. Tesla - bullish analysts said that the first - quarter performance was a disaster, and the stock performance depends on how long Musk "participates in politics".

Trump said he has no intention of firing Powell and now is an excellent time to cut interest rates, which drove the US stock market to rise after hours. When asked if he confirmed that he is not seeking to remove Powell from his position, Trump replied in the Oval Office of the White House, "Absolutely not, never." However, he reiterated his criticism of Powell, saying that now is an excellent time to cut interest rates and hoping to see Powell cut interest rates more aggressively. Analysts believe that this statement is aimed at calming market tensions and also marks a significant change in Trump's attitude.

Wall Street economists believe that even if Trump fires Powell, it is difficult to force the Federal Reserve to cut interest rates. Firing Powell is just the first step. To completely control monetary policy, all seven members of the Federal Reserve Board need to be fired, which will lead to a fall in the US dollar and an increase in the long - end interest rate of the yield curve.

Investors are hopeful that the trade tensions will ease. The Nasdaq Composite Index and the China stock index rose more than 3% intraday, and safe - haven assets declined. According to media reports, US Treasury Secretary Besent said at a closed - door investor meeting on April 22nd that the tariff deadlock is unsustainable, and it is expected that the situation will ease in the near future. The Dow Jones Industrial Average soared more than 1,000 points, the Nasdaq Composite Index once rose more than 3%, and gold once fell 1% intraday. Later, another report said that the Trump administration is "close" to reaching trade agreements with Japan and India, but it may still take several months to reach a final trade deal, which caused the US stock market to once give back the gains after Besent's statement.

The finance ministers of the United States and Japan are about to meet to jointly discuss "monetary issues". The Japanese yen has strengthened and broken through 140. This meeting comes at a sensitive time of Trump's tariff policy and the rapid appreciation of the Japanese yen. On Tuesday, the Japanese yen against the US dollar rose to 139.90, reaching the highest level since September last year. Analysts believe that breaking through this level is more likely to trigger the purchase of the Japanese yen and the sale of the US dollar, accelerating the appreciation of the Japanese yen.

Citi believes that it is difficult for the two sides to reach a so - called "Plaza Accord 2.0". The US side may expect the Japanese yen to rise to 100 yen per US dollar, and a more realistic compromise point may be around 120 yen per US dollar. Besent may prefer to achieve the exchange rate target through the normalization of the Bank of Japan's monetary policy rather than direct currency intervention.

In the first two weeks of April, Japanese institutions sold more than $20 billion in foreign - denominated bonds, the largest scale in 20 years! According to the preliminary data of the Japanese Ministry of Finance, in the week ended April 4th, private institutions including banks and pension funds sold long - term foreign bonds worth $17.5 billion, and then sold another $3.6 billion in the following week. Nomura believes that "a large part of the selling may be US Treasury bonds or US agency bonds".

The "strike" of US Treasury bond buyers has begun: in the 2 - year US Treasury bond auction, overseas demand hit a two - year low. In Tuesday's 2 - year US Treasury bond auction, although the domestic demand in the United States recovered, the "indirect bidders", an indicator measuring overseas demand, only took 56.2% of the share, the lowest value since the most severe period of the Silicon Valley Bank crisis in March 2023. Analysts said that if overseas demand continues to decline, the Federal Reserve may have no choice but to restart quantitative easing (QE).

The US dollar is severely "oversold", with dense short positions and support from interest rate differentials. It may have a "technical rebound" at any time, which may affect gold. After a nearly 10% slump, the US dollar has reached a key level. The short - position has reached a record high of $40 billion, and the relative strength index has dropped to the lowest level since 2020. The US dollar still maintains a yield premium after inflation adjustment. The oversold state and the one - sided sentiment of investors have created a technical basis for the rebound of the US dollar. CICC believes that the weak expectation of the US dollar is the main reason for the continuous rise of gold recently. The US dollar is still under pressure in the short term, but the range is limited. It will gradually recover in the third and fourth quarters, which may lead to a correction in gold.

The sharp rise in gold prices has triggered the "end - of - cycle" effect: several contracts of Shanghai gold options have skyrocketed, with the maximum increase of 9,800%! The sharp rise is mainly due to two reasons: first, the underlying Shanghai gold futures mentioned above rose sharply in the morning, and second, the "end - of - cycle" effect in the options market exacerbated the volatility. According to the arrangement, the expiration date of the Shanghai gold 2505 options is April 24th.

Goldman Sachs is bullish on Cambricon: the cloud chip market is booming, the shipment volume may exceed one million pieces in 2028, and the stock price can still rise 76%! Goldman Sachs said that Cambricon's cloud chip business is accelerating its rise, and the shipment volume is expected to exceed 1 million pieces in 2028. The increase in inventory and contract liabilities also verifies the booming demand. It is expected that Cambricon is likely to make a profit in 2025, and the EBITDA margin will increase to 26% by 2030, approaching the level of its peers such as Nvidia and AMD.

POP MART's Q1 revenue increased 1.7 times year - on - year, and the revenue in the Americas market soared 9 times year - on - year. In the first quarter of 2025, the total revenue increased significantly by 165% - 170% year - on - year. Among them, the Chinese market increased by 95% - 100%, and the overseas market growth rate reached an amazing 475% - 480%. The European and American markets have seen explosive growth: the Americas market has soared by 895% - 900% year - on - year, and the European market has increased by 600% - 605%.

**Domestic Macroeconomy**

What does the supplementary reduction in deposit interest rates mean? Since April, more than 30 banks have lowered their deposit interest rates. Guohai Securities believes that this may indicate that a new round of downward adjustments to the deposit listing interest rates led by large banks is on the way, and it also opens up room for further interest rate cuts. Combined with the performance of the economic fundamentals, the expectation of loose monetary policy is heating up. It is recommended to pay more attention to the opportunity of narrowing credit spreads brought about by the reduction in deposit interest rates.

**Domestic Companies**

Huawei's Vehicle BU released Kunpeng ADS 4, which supports high - speed L3 functions, and also jointly released a safety intelligent driving initiative with 11 car companies. Huawei's Vehicle BU released Huawei Kunpeng's high - level intelligent driving assistance system ADS 4, HarmonySpace 5, a new generation of Hongmeng cockpit car - machine operating system, and others. Huawei's Vehicle BU CEO Jin Yuzhi said that the high - speed L3 of ADS 4 is ready for formal commercial use. Dozens of new cars equipped with Huawei Kunpeng's intelligent driving system will be launched one after another in 2025. In addition, Huawei's Vehicle BU, together with the China Automotive Technology and Research Center and 11 car companies, jointly released a safety intelligent driving initiative to put an end to false propaganda.

China Mobile's Q1 net profit increased 3.5% year - on - year, and the number of 5G network customers reached 578 million.

ZTE Corporation's Q1 revenue increased 7.82% year - on - year, and the net profit after deducting non - recurring items decreased 26.14% year - on - year.

**Overseas Macroeconomy**

The collapse of the US "soft" data continues, and the Richmond Fed's manufacturing new order expectations hit a record low. The Philadelphia Fed's non - manufacturing survey index plummeted to - 42.7 in April, from - 32.5 previously; both the current situation and the six - month - ahead expectations have dropped to the lowest level since the peak of the lockdown caused by the COVID - 19 pandemic. The US April Richmond Fed manufacturing activity survey shows a more severe situation. The index plummeted to - 13, worse than the expected - 7, and the previous value was - 4; the new order expectations hit a record low, and the payment prices soared.

The US stock market had a sharp sell - off with shrinking trading volume on Monday, and Wall Street was "stunned", with only retail investors still bottom - fishing. Goldman Sachs and JPMorgan Chase: "Buyers are on strike", "tactically bearish".

On Monday, the trading volume of the US stock market was about 13.5 billion shares, a significant decline from the normal level of more than 20 billion shares, and much lower than the average level in April. As of 2:30 p.m. on Monday, New York time, retail traders had net - bought $2.2 billion worth of stocks, significantly higher than the average level in the past month.

Goldman Sachs' chief trader John Flood pointed out in a report that "we are witnessing a buyer strike in a fragile market." Andrew Tyler, a JPMorgan Chase analyst who turned bearish about two months ago, said that he remains tactically bearish. As the market reaches a consensus on the full impact of the tariff war, 5,000 - 5,500 points may be more appropriate.

The rare "triple kill" of the US stock, bond, and foreign exchange markets has only occurred six times since 1971. Powell is being criticized and the US dollar is falling! Will Powell give in and the US dollar collapse?

CICC believes that when the US has "stagflation" and the fundamentals of non - US countries are relatively good, the US may experience a "triple kill" of the stock, bond, and foreign exchange markets. Apart from trading factors, fundamentally speaking, the current market is pricing in "US stagflation" and a "not - so - bad eurozone".

Barclays believes that although the possibility of Trump replacing Fed Chairman Powell is still low, the relevant pressure and noise may continue until the end of Powell's term. Once the market interprets the future easing policy as a result of the Trump administration's intervention, the downside risk of the US dollar will intensify.

Weighed down by tariffs, the IMF has lowered its 2025 global growth forecast to 2.8% and expects the probability of the US falling into a recession this year to be 40%. The IMF expects the global GDP growth rate to be 2.8% this year, lower than the 3.3% it predicted in January, and it will be the slowest GDP growth rate since 2020. The expected economic growth rate of the US is 1.8% this year and 1.7% in 2026, with a decrease of 0.9 and 0.4 percentage points respectively.

The Republican Party plans to tax millionaires, aiming to increase tax revenue by $400 billion over ten years. As the tax cuts implemented by Trump in 2017 are about to expire, the Republican Party is preparing to introduce a new round of tax reduction plans: considering imposing a 40% income tax on Americans with an annual income of more than $1 million, which could generate approximately $400 billion in fiscal revenue over a ten-year period. Through this measure, the Republican Party can partially offset the costs of extending the tax reduction policy and maintain budget balance.

The United States is facing a wave of student loan defaults, which may drag down consumer spending by $63 billion. The default rate of student loan repayments in the United States is rising sharply. The Federal Reserve Bank of New York estimates that loans worth $250 billion owed by nearly 10 million borrowers are overdue. This will lead to a reduction of $26 - 63 billion in annual consumer spending, dragging down GDP growth by 0.1 - 0.4 percentage points.

Putin has hinted at the possibility of talks with Ukraine for the first time since the Russia-Ukraine conflict, and Trump said he will announce a "peace plan" for Russia and Ukraine in the next three days. According to CCTV News and the Global Times, on the 22nd, Putin expressed his willingness to have direct talks with Ukrainian President Volodymyr Zelensky, which is the first such hint since the Russia-Ukraine conflict. Putin proposed a ceasefire along the line of contact and had put forward this proposal to US Special Envoy Witkoff in early April. Previously, on the 21st, Trump said he would announce a peace plan for Russia and Ukraine in the next three days.

Putin signed a federal decree approving the Treaty of Comprehensive Strategic Partnership between Russia and Iran. According to the provisions of the treaty, "if one contracting party is subjected to aggression, the other contracting party shall not provide any military or other assistance to the aggressor that may contribute to the aggression, and shall assist in resolving the resulting disputes on the basis of the Charter of the United Nations and other applicable norms of international law."

Overseas Companies

A Bold Gamble in the Storm: Nomura Bottom-fishes US Assets with $1.8 billion, the "Most Significant Deal" Since the Acquisition of Lehman Brothers. Nomura acquired Macquarie Group's European and American asset management business for $1.8 billion. This business covers stocks, fixed income, and multi-asset strategies, with an asset management scale of $180 billion, approximately 90% of which comes from the US market. The Chairman of Nomura said: I am not bearish on the market, and the fundamentals of the US and global economies remain strong.

It's not just tariffs. The luxury goods industry is facing a perfect storm of a "weak US dollar + strong gold". The depreciation of the US dollar against the euro directly weakens the profitability of European luxury goods companies in the US market; the soaring gold prices have pushed up the input costs of watch and jewelry manufacturers.

Elon Musk said he will seek a reasonable valuation for xAI. Insiders interpret this as a sign that xAI will conduct large-scale financing in the near future. A few months ago, it was reported that xAI was raising up to $6 billion at a valuation of $50 billion to purchase 100,000 Nvidia chips.

The Antitrust Hammer Has Come. The US Department of Justice Urges the Court to "Force Google to Sell Its Chrome Browser". OpenAI: If Google is required to divest Chrome, OpenAI is willing to acquire it.

Coca-Cola, a Safe Haven in the Trade Storm. JPMorgan Chase believes that despite facing tariffs and macroeconomic headwinds, Coca-Cola, with its strong defensiveness, diversified geographical layout, limited tariff impact, and the ability to cope with a dynamic operating environment, is expected to achieve organic sales growth (OSG) in 2025.

Industry/Concepts

1. Kaiyou: According to Kaiyou's prospectus, the scale of China's collectible trading card market increased from 2.8 billion yuan in 2019 to 26.3 billion yuan in 2024 (with a compound annual growth rate of 56.6%). The trendy toy market is developing rapidly, and IP is the core. Enterprises with high-quality IPs are worthy of attention.

2. Cross-border Payment: Guosen Securities pointed out that it is urgent to build an internationalized RMB clearing system. Currently, the CIPS system has 168 direct participants, and the global layout of the clearing network has been basically completed, with the cumulative processing amount exceeding 60 trillion yuan. In 2024, the business volume of the RMB Cross-border Payment System (CIPS) reached 175.49 trillion yuan, a year-on-year increase of 43%, continuing the previous high growth trend, and the cross-border payment industry remains highly prosperous.

3. New Materials: According to a research report by Tianfeng Securities, by referring to the development history and corresponding stock price trends of listed new material enterprises in Japan, it can be found that platform-type companies have extremely strong abilities to weather both bull and bear markets. Combining with China's current development stage, Tianfeng Securities proposes three stock selection directions for the industry.

4. Electricity: GF Securities pointed out that the electricity sector has gradually emerged from the pessimistic expectations of EPS at the beginning of the year, and the future is more promising. The previous doubts about the fundamentals have been gradually lifted, and it is highly likely that the electricity sector will transform from a weak dividend to a strong dividend. The sector's market trend has shifted from being in the preparation stage to following the trend.

Preview of Today's Key News

The G20 Finance Ministers and Central Bank Governors Meeting will be held until April 24th.

The preliminary values of the manufacturing, service, and composite PMIs for the United States, the Eurozone, and Japan in April.

The sales of new homes in the United States in March.

Speeches by Federal Reserve Governor Waller, the President of the Federal Reserve Bank of Chicago, the President of the Federal Reserve Bank of St. Louis, and the President of the Federal Reserve Bank of Cleveland.

The Federal Reserve releases the Beige Book on the economic situation.

The change in the EIA crude oil inventory in the United States last week.

IBM and Boeing release their financial reports.

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