Morning News

Source: Wall Street News

Market Overview
Trump's latest tariff plan triggered a sell-off in U.S. stocks and U.S. bonds, with the S&P and Nasdaq falling nearly 1%.

Tesla once fell by more than 8% because of Musk's new party. CoreWeave fell more than 3%, Core Scientific fell more than 17%, and CoreWeave will acquire Core Scientific through an all-stock transaction. The Chinese stock index closed up about 0.6%, outperforming the US stock market. 

The 10-year U.S. Treasury yield rose by nearly 7 basis points. The dollar closed up 0.6% and rebounded to a two-week high. Emerging market currencies hit their biggest drop since April.

Spot gold reversed in a V-shaped manner, and then rebounded after falling by more than 1% during the session, and the price remained the same at the end of the session. Oil prices fell first and then rose, while U.S. oil rose by 4.2% compared with the daily low.

During the Asian period, stocks and bonds fell, the ChiNext fell by more than 1%, electricity stocks broke out against the trend, Hengke Index turned red and rose by 0.25%, tea drink stocks rose sharply, and commodity and treasury bonds fell generally.


Important news
The People's Bank of China increased its holdings of 70,000 ounces of gold in June, and increased its holdings for eight consecutive months, with a recovery in its pace.

The first wave of Trump's tax collection letter: 14 countries including Japan and South Korea range from 25% to 40%, and will take effect on August 1, and the EU may be close to the agreement.

Tesla once fell 7.6%. As sales continued to decline, Musk's "American Party" was involved in the political whirlpool again. Musk: Becente is Soros' puppet, he doesn't even know how to do math.

To expand the AI computing power landscape, CoreWeave spent $9 billion to acquire Core Scientific and increase its investment in AI infrastructure.

Equity compensation accounts for 119% of revenue: OpenAI pays a high price to retain talent. Zuckerberg continues to poach people, and Apple's executives in charge of AI models will switch to Meta.

Goldman Sachs expects the Federal Reserve to cut interest rates three months ahead of schedule: in September, the terminal interest rate will be 3%-3.25%.

Market closing
European and American stock markets: S&P 500 fell 0.79% to 6229.98 points. The Dow Jones Industrial Average fell 0.94% to 44,406.36 points. The Nasdaq fell 0.92% to 20,412.52 points. The European STOXX 600 index closed up 0.44% to 543.50 points.

A-shares: The Shanghai Composite Index rose 0.02% to 3473.13 points. The Shenzhen Component Index fell 0.7% to 10,435.51 points. The ChiNext Index fell 1.21% to 2130.19 points.

Bond market: The yield on the 10-year benchmark US Treasury bond rose 0.77 basis points to 4.3794%. The two-year U.S. Treasury yield rose 1.46 basis points to 3.8946%.

Commodity: WTI August crude oil futures rose 1.39% to $67.93 per barrel. Brent's September crude oil futures rose 1.87% to $69.58 per barrel. COMEX gold futures rose 0.09% to $3,346 per ounce.

News Details  

Global Highlights  

**China's Central Bank Increases Gold Reserves for 8th Consecutive Month**  

In June, China's central bank added 70,000 ounces of gold to its reserves, marking the eighth consecutive month of growth, with the pace of accumulation rebounding. The State Administration of Foreign Exchange (SAFE) attributed the rise in foreign exchange reserves to factors such as exchange rate fluctuations and changes in asset prices. As of the end of June 2025, China's foreign exchange reserves stood at $3.3174 trillion, up $32.2 billion (0.98%) from the end of May.  

**Trump's First Wave of Tariffs: 25%-40% on 14 Countries Including Japan and South Korea, Effective August 1**  

The U.S. will impose tariffs of 25%-40% on Japan, South Korea, and 12 other countries starting August 1. Reports suggest the EU will not receive a tariff hike notice from the U.S., as the two are close to a preliminary trade agreement that would cap U.S. tariffs on the EU at 10% post-August 1, pending further negotiations for a permanent deal.  

**U.S. to Impose 25% Tariffs on Japanese and South Korean Products from August 1, Threatens Retaliation**  

Trump warned that new tariffs would apply independently of sector-specific tariffs, with higher duties for attempts to circumvent them via third countries. Companies building or manufacturing products in the U.S. will be exempt. If Japan or South Korea retaliates with higher tariffs, the U.S. will impose additional tariffs of equal magnitude. U.S. stock indices extended losses, while the yen and won fell over 1% intraday.  

**White House Delays Reciprocal Tariff Deadline to August 1; EU Exempt from Tariff Notice**  

Reports indicate the EU aims to secure a preliminary deal to lock U.S. tariffs at 10% after August 1, with exemptions for key exports like aircraft and alcohol.  

**Trump Announces Tariffs of Up to 40% on Imports from South Africa and 11 Other Countries**  

From August 1, the U.S. will impose 25% tariffs on Kazakhstan, Malaysia, and Tunisia; 30% on South Africa and Bosnia; 32% on Indonesia; 35% on Bangladesh and Serbia; 36% on Thailand and Cambodia; and 40% on Laos and Myanmar.  

**Tesla Plummets 7.6% as Musk's Political Ventures Raise Concerns Amid Declining Sales**  

Tesla's stock tumbled as Musk announced the formation of a new political party, contradicting his earlier pledge to focus more on Tesla. Analysts worry this will divert attention from the core auto business. Investors, already uneasy about Tesla's delivery slump, are growing weary of Musk's distractions.  

**Musk: "Bezent is Soros' Puppet, He Can't Even Do Math"**  

Musk criticized Bezent after the latter claimed in an interview that while DOGE's principles are popular, Musk himself is not, based on polls. Bezent also suggested Tesla's board is unenthusiastic about Musk's political ventures.  

**CoreWeave Expands AI Infrastructure with $9 Billion Acquisition of Core Scientific**  

The deal, a 66% premium, aims to bolster CoreWeave's data center capacity for AI and high-performance computing (HPC) workloads. Pending regulatory approval, the acquisition is expected to close in Q4 2025, granting CoreWeave access to 1.3 gigawatts of power resources. CoreWeave's shares fell 6% early Monday, while Core Scientific dropped 24%, though the latter has surged 110% since acquisition rumors emerged in June 2024.  

**OpenAI's Costly Talent Retention: Equity Compensation Hits 119% of Revenue**  

OpenAI disclosed to investors that its equity incentive spending soared over fivefold to $4.4 billion in 2023, accounting for 119% of revenue. The company projects this ratio to drop to 45% this year and below 10% by 2030, though this forecast predates Meta's recent poaching spree. OpenAI executives have hinted at potentially increasing equity incentives.  

**Zuckerberg Poaches Apple's AI Lead for Meta**  

Meta offered tens of millions in annual salary to lure Apple's AI model executive, Pang Ruoming.  

**Goldman Sachs Brings Forward Fed Rate Cut Forecast to September, Terminal Rate 3%-3.25%**  

The bank cited slightly milder-than-expected tariff impacts and stronger disinflationary factors for revising its timeline three months earlier. Fed officials may share this view that tariff effects on prices will be one-off.  

**Domestic Macro**  

**Key Drivers Behind Shanghai Index's Rally: Anti-Internal Competition and AI**  

CICC notes that "anti-internal competition" could prompt companies to cut excess capacity, improving supply-demand dynamics and profitability. Meanwhile, AI infrastructure and applications are emerging as a second major growth catalyst.  

**First Batch of Metals Arrives in Hong Kong, Set to Join LME Warehouse Network**  

Starting July 15, these metals will be eligible for LME contract settlements.  

**Domestic Companies/Industries**  

**"Takeout Battle Royale": Meituan, Alibaba, JD Slide as Bubble Tea Stocks Soar**  

A weekend promotion offering "free" bubble tea nearly crashed national takeout systems, overwhelming staff.  

**Quant Trading Rules Take Effect Monday; Top Hedge Funds Explain Changes**  

Per *Daily Economic News*, Yinno Asset's Xu Shunan noted most institutional alpha strategies already comply, with only ultra-high-frequency strategies (200+ turnovers/year) affected. A Shanghai quant fund highlighted that "spoofing" and other manipulative practices will be targeted, cleaning up "pseudo-quant" activities.  

**Overseas Macro**  

**Retail Investors Win the Battle for U.S. Stock Pricing Power**  

In H1 2025, U.S. retail investors poured a record $155.3 billion into single stocks and ETFs, with daily trading volume up 45% YoY. Top picks included Nvidia, Tesla, and Palantir, reflecting strong buy-the-dip tendencies.  

**Is the Dollar Still Irreplaceable? Goldman Warns of Diversification Storm**  

Despite a weak H1 and expected Fed cuts, the lack of viable alternatives means mass diversification out of dollar assets could trigger market turbulence, particularly in limited-supply assets like Swiss francs, precious metals, and Bitcoin.  

**Inflation Erodes Incomes: Japan's Real Wages Post Sharpest Drop in Two Years**  

May's real wages fell 2.9% YoY, the steepest decline in 20 months, potentially complicating the BOJ's rate hike plans. Analysts warn this could slow Japan's economic recovery.  

**Japan's Long-Term Bond Yields Surge as Market Braces for Tariffs, Election**  

Morgan Stanley flags two near-term risks: July 9 tariff deadline (failure could spur yen strength) and July 20 upper house election (a ruling party loss may fuel bets on fiscal stimulus, pushing yields higher).  

**OPEC Unleashes Supply Wave, Global Oil Market Faces Glut**  

OPEC+'s 10-minute meeting announced a 548,000 b/d output hike for August, exceeding expectations and signaling a shift from cuts to market share recapture. Goldman sees oil falling to $60, pressuring U.S. shale and OPEC members while aligning with Trump's call for cheaper fuel.  

**Overseas Companies**  

**Apple Appeals €500M EU Fine: "Unprecedented and Unlawful"**  

Apple argues the penalty oversteps legal requirements and disrupts its operations, imposing unfavorable terms on developers and users.  

**Amazon vs. Walmart: U.S. Retail Price War Heats Up**  

Both giants kick off their biggest sales events on July 8, with Amazon extending its Prime Day to four days and Walmart integrating 4,600 stores into a six-day promotion. Walmart's 20% e-commerce growth poses a growing threat to Amazon's dominance.  

**Weak AI Chip Sales Drag Samsung Q2 Operating Profit Down 39%**  

Analysts estimate Samsung's April-June operating profit at ₩6.3 trillion ($46.2 billion), a six-quarter low, due to delays in supplying advanced memory chips to Nvidia.  

**Figure CEO: Humanoid Robots Key to AGI, 100,000 Deployments in Four Years**  

Brett Adcock claims Figure's latest robot design cuts costs by ~90%, with mass production capacity targeting 100,000 units annually. He predicts humanoids will surpass human performance in most jobs within our lifetimes.  

**Sectors/Themes**  

1. **Heavy Trucks**: CICC notes June sales rose 32% YoY to ~94,000 units, driven by subsidy policies and pre-half-year channel stocking. Q3 demand may further accelerate.  

2. **Waterproofing**: Multiple firms hiked prices in June/July. Guojin Securities sees industry competition stabilizing, enabling successful price hikes.  

3. **Pharma**: Zhongtai Securities recommends focusing on recovering sectors like CRO/CDMO, research tools, and specialty APIs.  

4. **Innovative Drugs**: Xiangcai Securities highlights near-term focus on earnings and 2025医保 negotiations, favoring pipeline value and commercialization potential.  

**Today's Preview**  

- RBA rate decision.  

- Amazon Prime Day.  

- EIA monthly energy outlook report.  

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