Morning News

Source: Wall Street News

### Market Overview  

Driven by the slowdown in U.S. inflation and robust U.S. Treasury auctions, U.S. stocks and bonds rose in tandem. Tech stocks led the rally, pushing the S&P 500 to a nearly three-month high. Oracle surged 13% after releasing its earnings report, while Boeing fell nearly 5%; Chime soared 37% on its first day of listing. Pan-European stock indexes fell for four consecutive days, but the UK index rose for three consecutive days and hit a record high.  

After the release of the U.S. PPI, U.S. Treasury prices further increased, and Treasury yields accelerated their decline to a one-week low; the U.S. Dollar Index expanded its decline to 1%, hitting a more than three-year low, while the euro rose more than 1% to a more than three-year high. The Chinese yuan also strengthened as the U.S. dollar weakened, with the onshore yuan hitting a more than seven-month high and the offshore yuan surging nearly 300 points at one point, breaking through 7.17.  

During Asian trading hours, China's A-shares fluctuated and consolidated, with new consumption concepts surging. The Hang Seng Index fell more than 1%, while pharmaceutical stocks rose against the trend, and Treasury bonds and commodities mostly declined.  

### Key News  

- Trump stepped up pressure on Powell: "Idiot! A 2-percentage-point rate cut could save $600 billion annually, and the Fed may have to be 'forced' to act."  

- Trump overturned California's electric vehicle mandate, calling Musk a friend and stating that he sought Musk's opinion before taking action.  

- The U.S. announced that it would impose additional tariffs on steel home appliances starting from the 23rd, including washing machines and refrigerators.  

- Following the CPI, U.S. PPI inflation also cooled. Core PPI rose moderately by 0.1% month-on-month in May, lower than expected, with the growth rate hitting a nearly one-year low. Expectations for two rate cuts by the Fed within the year have intensified; the number of initial jobless claims in the U.S. last week was slightly higher than expected, and the number of continuing claims soared to the highest since the end of 2021.  

- This week's most challenging U.S. Treasury auction passed the test, with the 30-year Treasury bond performing strongly again, driven by robust overseas demand.  

- The first air crash of a Boeing 787 occurred at an Indian airport, where the plane exploded less than one minute after takeoff, killing more than 290 people, including 241 on board with only one survivor. The black box has been found, and preliminary data shows abnormalities in part of the landing gear system; Boeing's stock price fell nearly 6% at one point.  

- Trump said Israel might launch an attack on Iran, but he would not call it an "imminent attack."  

- AMD released a new AI chip, claiming that its inference test performance exceeds that of NVIDIA by up to 1.3 times. The CEO expects the AI chip market to exceed $500 billion by 2028, with faster growth in inference chips.  

- Reports: XPeng Motors is in talks to supply AI chips to other automakers, with Volkswagen potentially becoming the first customer.  

### Market Close Data  

- European and U.S. stocks: The Dow Jones Industrial Average rose 0.24%, the S&P 500 Index rose 0.35%, and the Nasdaq rose 0.24%. The European STOXX 600 Index fell 0.33%.  

- A-shares: The Shanghai Composite Index rose 0.01%, the Shenzhen Component Index fell 0.11%, and the ChiNext Index rose 0.26%.  

- Bond market: By the end of bond trading, the yield on the U.S. 10-year benchmark Treasury note was about 4.36%, down about 6 basis points on the day, and the yield on the 2-year Treasury note was about 3.91%, down about 4 basis points on the day.  

- Commodities: WTI July crude oil futures fell 0.16%. Brent August crude oil futures fell 0.59%. COMEX August gold futures closed up 1.76%. COMEX July silver futures closed up 0.09%. COMEX July copper futures closed up 0.44%.

### Details of Key News  

#### Global Highlights  

- Trump overturned California's electric vehicle (EV) mandate, calling Musk a friend and stating that he sought Musk's opinion before taking action. Trump said he likes Tesla and other EV companies; regarding the repeal of California's EV support policies, Musk told him that as long as the actions are applied equally, there would be no objections. From congressional review to the president signing the resolution, the Trump administration spent more than three months overturning the California mandate approved during Biden's term. The mandate plan has been adopted by 11 other states accounting for one - third of the U.S. auto market. California said last month that it would file a lawsuit as soon as Trump signed the resolution.  

- Trump intensified pressure on Powell: "Idiot! A 2 - percentage - point rate cut could save $600 billion annually." Trump stated that if the Fed cuts rates by two percentage points, $600 billion could be saved each year. Currently, $600 billion is spent annually because a fool sits here saying, "I don't see enough reason to cut rates." He will not remove Fed Chair Powell. If inflation rises, he does not oppose the Fed raising rates, but since inflation is now falling, he may have to "force" the Fed to act.  

- The U.S. announced that it would impose additional tariffs on steel home appliances starting from the 23rd, including washing machines and refrigerators. The U.S. Department of Commerce announced that additional tariffs would be imposed on various steel household appliances from June 23, including "steel - derived products" such as dishwashers, washing machines, and refrigerators.  

- Bessent for the first time said the "July 9 tariff deadline" could be extended and named "Europe", with Democratic lawmakers bluntly calling it the "taste of TACO". When responding to questions from Democratic lawmakers, U.S. Treasury Secretary Bessent made it clear: "For those countries that negotiate in good faith - or trade blocs like the EU - we are highly likely to extend the deadline to continue good - faith negotiations. But if some do not negotiate, we will not extend it." This is the first time the Trump administration has publicly acknowledged the flexibility of its tariff timetable. Trump himself also said on Wednesday that he is willing to extend the July 8 deadline but believes it is "not very necessary".  

- Exchanging automobiles for agriculture, the key details of the U.S. - UK negotiations will be revealed soon. The U.S. and the UK are about to sign a key part of a tariff trade agreement, which will reduce the tariff on UK automobile exports to the U.S. from 27.5% to 10%, and at the same time reduce the tariffs on steel and aluminum to zero. The UK will grant the U.S. a zero - tariff quota of 13,000 tons of beef and 1.4 billion liters of ethanol. The U.S. Commerce Secretary said the agreement would come into effect "in the next few days".  

- Both U.S. May PPI and core PPI rose moderately by 0.1% month - on - month, lower than expected, and the growth rate of core PPI hit a nearly one - year low, with expectations for two rate cuts by the Fed within the year intensifying. After CPI, PPI inflation also cooled. The overall increase in U.S. PPI in May was still moderate, and tariffs had not yet caused higher price pressures on consumers and businesses. However, the profit margins of U.S. enterprises continued to be under pressure, indicating that enterprises are absorbing the tariff costs by themselves. After the data was released, traders once again fully factored in the scenario of two rate cuts by the Fed within the year.  

- The number of initial jobless claims in the U.S. last week was slightly higher than expected, and the number of continuing claims soared to the highest since the end of 2021.  

- Boeing added another dark chapter to its history. The first air crash of a 787 passenger plane occurred, killing more than 290 people, and the stock price fell nearly 6% at one point. On the 12th, an Air India Boeing 787 - 8 passenger plane crashed near an airport in India, exploding less than one minute after takeoff. Air India said 241 people on board were killed and only one survived, and the police said the crash of the passenger plane also caused casualties on the ground. The Chinese Embassy in India confirmed that there were no Chinese passengers on the crashed passenger plane. This is the first total loss accident of the Boeing 787 model. Media said the pilot sent a distress signal before the crash. The black box of the plane has been found, and preliminary data shows abnormalities in part of the landing gear system. Experts said the passenger plane was in a stall state when taking off. Some technical analyses believe that the accident may be related to the pilot's misoperation. Boeing's stock price recorded its largest decline in two months.  

- Trump said Israel might launch an attack on Iran. U.S. President Trump said an attack by Israel on Iran is "very likely to happen", but he would not call it an "imminent attack".  

- Morgan Stanley detailed the three highlights of NVIDIA's GTC: Europe's investment catch - up, quantum commercialization, and the full acceleration of industrial AI. Morgan Stanley maintained NVIDIA's overweight rating and a target price of $170, expecting its European market revenue to grow 8 times or more from 2024 to 2026. In addition, quantum computing and industrial/physical AI applications also provide new growth drivers. Furthermore, Morgan Stanley emphasized the obvious acceleration of inference workloads, expecting the top four customers to deploy 3.6 million Blackwell chips in 2025.  

- AMD released new AI chips, and the CEO expects the AI chip market to exceed $500 billion by 2028, with inference chips growing even more rapidly. Previously, CEO Lisa Su repeatedly said that the AI chip market would reach $500 billion by 2028. This Thursday, she predicted that it would exceed $500 billion by then, saying that the compound annual growth rate in the AI accelerator field exceeds 60%. She also said that in the past year, AMD has acquired 25 companies related to its own AI plans. The new MI350 series products, MI350X and MI355X, claim to have performance exceeding NVIDIA's competing products by up to 1.3 times in inference tests and leading by up to 1.13 times in specific training workloads.  

- Reports: XPeng is in talks to supply AI chips to other automakers, and Volkswagen may become the first customer. XPeng said that the effective computing power of the Turing AI chip is three times that of the leading autonomous driving chip Orin - X, which is a product of NVIDIA, the U.S. technology giant. XPeng Motors said it is in talks to supply AI chips to other automakers.  

- Investment guru Bill Gurley: The AI wave has interrupted the market correction that should have occurred, and China's fierce competition environment can instead shape stronger enterprises. Bill said that the AI wave has interrupted the market correction and driven a new round of investment boom. At present, the revenue of most AI enterprises is mostly the resale of computing power, and economic benefits are ultimately a problem that needs to be solved. In China's fierce competition environment, if it gives birth to open - source products of four well - funded companies, this will be super powerful. Models train each other, and everyone can use them, which will bring a lot of choices and experiments, and this is something that will not happen in the U.S.  

#### Domestic Macro - economy  

- Li Qiang: China is willing to strengthen cooperation with the European Central Bank in the reform of the international monetary system and other aspects. Li Qiang said that there is great potential for cooperation between China and Europe in many fields, and China is willing to strengthen market connectivity and industrial collaboration with Europe to add more impetus to their respective developments. China is willing to strengthen cooperation with the European Central Bank in the reform of the international monetary system and other aspects.  

- Xinhua Commentary: Solve economic and trade differences through equal dialogue and mutually beneficial cooperation - Comment on the first meeting of the China - U.S. economic and trade consultation mechanism. According to Xinhua News Agency, China is sincere and principled in economic and trade consultations. It is hoped that the U.S. can cherish the hard - won momentum of dialogue, show sufficient sincerity and actions, and continue to move towards China. At present, the top priority is to revoke the negative measures implemented against China and clear obstacles for the healthy development of economic and trade cooperation between the two countries.  

- The AH premium hit a five - year low, and some popular stocks have shown "inversion". The premium of China's A - shares over H - shares narrowed to 27%, hitting a five - year low. Popular stocks such as BYD and CATL rarely showed the phenomenon of A - shares being "inverted" compared to H - shares. Analysis believes that this unusual price relationship sends a signal that A - shares may be undervalued, and some investors may snap up cheaper A - shares. Since the beginning of this year, under the influence of factors such as valuation advantages, the marginal easing of overseas liquidity, and the continuous inflow of southbound funds, the performance of Hong Kong stocks has generally been better than that of A - shares, and the Hang Seng AH Premium Index has started a new round of decline.  

#### Domestic Companies  

- Is the price war spreading to Europe? BYD's "Dolphin Surf" was officially launched in the UK market, priced at only 18,650 pounds. BYD launched the small electric vehicle "Dolphin Surf" in the UK at 18,650 pounds (about 180,000 yuan), and its Chinese version is priced at less than 6,000 pounds. In the first four months of this year, the market share of Chinese brands in the UK and Europe quickly rose from 2.9% to 4.8%, and the UK absorbed nearly 30% of Chinese models exported to Europe. Facing the price reduction of automakers, Western automakers have begun to use lithium iron phosphate batteries to reduce costs. But analysts believe that Chinese brands still have吸引力 (attraction)凭借 (by virtue of) technological advantages, for example, BYD plans to introduce super fast charging technology into Europe within 12 months.  

- From shortages and counterfeits to competition, this is the "top - flow anxiety" of Pop Mart. Goldman Sachs believes that the European trendy play market is growing rapidly, and Pop Mart has risen by taking advantage of the trend. Labubu has become the hottest IP, with women aged 15 to 25 as the main consumer group. However, insufficient supply has become its biggest challenge, which may lead to the breeding of counterfeits and being taken advantage of by competitors. Experts remind that the trendy play market is supply - driven, and continuous "new product launches" and content ecosystem construction are the key.  

- The counterfeit industry chain of Labubu: secret global shipping, and no one can visit the factory. Counterfeit Labubu products range from crudely made "obvious fakes" to almost "1:1" high - imitation products, which are sold at home and abroad through Yiwu, Shenzhen Huaqiang North, e - commerce live broadcasts, and cross - border channels. They even take advantage of the genuine product's hunger marketing strategy and the market demand for high premiums, specifically targeting overseas markets. A counterfeit goods agent said: "The demand is too great, and we are arranging orders with the factory every day."  

#### Overseas Macro - economy  

- This week's most difficult U.S. Treasury auction passed the test, the 30 - year Treasury bond was stable again, and overseas demand was strong. After the results of the 30 - year Treasury bond auction were released, the market reacted positively, and the yield on the 10 - year Treasury bond approached the intraday low. However, analysis points out that the U.S. still faces the pressure of a large supply of long - term Treasury bonds - because Trump's promoted "big and beautiful" spending plan still needs huge financing support.  

- Oaktree's Max: Trump likes "unpredictability", and current U.S. stocks are not cheap but not in a bubble yet. Max warned that Trump "will not explain himself, and this may be intentional." For investors, Max emphasized that global asset prices are at or near historical highs, but the current market has not yet shown the "psychological excess" that constitutes the characteristics of a bubble. In other words, although the market is expensive, it may not have entered a stage of complete irrational exuberance yet.  

- The UK economy experienced the most serious contraction in 18 months, and expectations for rate cuts soared. The UK's April GDP contracted by 0.3% month - on - month, far lower than the expected - 0.1%. After the data was released, traders quickly pushed up expectations for the Bank of England's rate cuts this year to 52 basis points. But analysis points out that since the UK's inflation rate is still higher than the Bank of England's 2% target, the bank may adopt a more cautious stance on the interest rate path.  

- Solana ETF takes the lead, and more digital currency ETFs will be approved by the U.S. SEC next month? The SEC has required potential Solana ETF issuers to submit revised S - 1 forms within the next week, a move seen as a sign that the approval process has significantly accelerated. This may shorten the approval time for Solana ETFs to 3 - 5 weeks. Some analyses say that the SEC may start approving some cryptocurrency - related ETFs as early as next month, thus kicking off the "token ETF summer".  

- Platinum is fierce? Goldman Sachs is not optimistic! Goldman Sachs believes that speculation and ETF demand, rather than fundamental improvements, have become the main forces driving platinum to $1,280 per ounce. Three major factors, including the price sensitivity of Chinese buyers, the structural decline in demand in the automotive industry, and the stable growth of South African supply, will cause platinum prices to return to the original price range.  

- Driven by the U.S. and Germany, the World Bank will lift the decades - old "nuclear power financing ban". According to reports, World Bank President Ajay Banga announced that it would re - enter the nuclear energy field, support efforts to extend the life of existing reactors, and help support grid upgrades and related infrastructure construction. Analyses point out that for the nuclear power industry, which has shrunk sharply since the 2011 Fukushima nuclear accident, the World Bank's decision is of great significance.  

#### Overseas Companies  

- NVIDIA and Samsung jointly invested, and the robot unicorn Skild AI is valued at $4.5 billion. The Series B financing of robot unicorn Skild AI was led by SoftBank with a $100 million investment, NVIDIA invested $25 million, and Samsung invested $10 million. NVIDIA is laying out the "physical AI" concept, taking robots as the engine for future revenue growth; Samsung has adopted a defensive strategy to keep pace with other Korean conglomerates. The robot track is ushering in a capital carnival, and technology giants are competing for the dominance of the next trillion - dollar market.  

#### Industries/Concepts  

1. **Silver**: Ping An Securities pointed out that with the low proportion of primary silver, the correlation between silver output and silver prices is low, and the driving role of silver prices on supply is weak, making it difficult to find the supply elasticity of silver. Domestic policies such as "two new" and "two important" to expand domestic demand continue to make efforts, and the upgrading of high - end manufacturing is advanced, so the demand for silver is expected to gradually release growth elasticity. In the medium term, the loose cycle in Europe and the U.S. is expected to continue, and the growth space for silver demand is opened. It is expected that the price center will gradually rise.  

2. **Grain Economy**: A research report by Guosheng Securities pointed out that the grain economy has shown a rapid growth trend in recent years with the popularization of the secondary - dimension culture and the expansion of the consumer group. It ushered in rapid growth in 2024, with a year - on - year growth rate of 30%. The industry chain can be divided into three main links: upstream IP and raw material supply, midstream product development, and downstream diversified sales. Each link is highly profitable.  

3. **AI Agent**: With the continuous maturity of generative AI and large model technologies, AI Agent will play a far - reaching role in many links such as data analysis, enterprise operations, and investment research. It will significantly improve labor productivity and return on investment, and the trillion - dollar white - collar labor market is expected to be reshaped.  

4. **Rare Earths**: Pacific Securities pointed out that domestic enterprises, with resource and technical advantages, have deeply cultivated the rare earth industry, built a complete industry chain, and have obvious leading advantages. The stricter management of rare earth quotas may lead to the clearing of smelting and separation production capacity. In the short and medium term, downstream demand benefits from overseas replenishment and inventory preparation needs, and in the long term, it benefits from the development of humanoid robots and low - altitude areas.  

#### Preview of Key News Today  

- May CPI in Germany and France.  

- June University of Michigan consumer confidence and inflation expectations in the U.S.  

- Japan's Trade Negotiator Ryosuke Akasawa is visiting the U.S. for the sixth round of tariff negotiations.  

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