Morning News

Source: Wall Street News

**Market Overview**  
Rumors that Federal Reserve Chair Powell might soon be fired by Trump initially caused significant turbulence in financial markets, leading to a plunge in U.S. stocks and rallies in gold, the Japanese yen, the Swiss franc, and Bitcoin. However, after Trump denied the reports, U.S. stocks closed higher on Wednesday, with the Nasdaq hitting a record high.  

Tesla rose 3.5% as its six-seater Model Y L is set to launch and deliver this fall. Johnson & Johnson surged 6.2% following its earnings report.  

The rumors of Powell's dismissal briefly fueled expectations of rate cuts, causing the 2-year Treasury yield to drop over 7 basis points intraday, though the decline narrowed after Trump's denial.  

The U.S. dollar fell more than 1.2% from its peak, while safe-haven currencies like the yen and Swiss franc briefly strengthened over 1.4% from their lows. Gold pared gains after a sharp rise but still closed 0.6% higher.  

During Asian trading hours, stocks, bonds, and commodities all declined. The ChiNext Index initially rose but later fell 0.2%, with healthcare and robotics sectors bucking the trend. Hong Kong stocks turned negative in the afternoon, with Pop Mart dropping 4%.  

**Key News**  
- Reports suggested Trump drafted a letter to fire Powell, but he denied the rumors while hinting it could be justified under certain conditions. White House National Economic Council Director Hassett emerged as the top candidate to replace Powell, with Trump confirming the consideration.  
- Trump announced plans to send tariff letters to over 150 countries, hinting at potential trade deals and singling out India. Under the threat of 30% tariffs, the EU is considering using its "anti-coercion tool" against Trump.  
- Tariff effects remain muted as U.S. June PPI rose at its slowest annual pace in nearly a year, with services deflation offsetting modest goods inflation.  
- The cryptocurrency bill remains stalled, casting doubt on Trump’s "Crypto Week" plans.  
- Nvidia CEO Jensen Huang delivered a speech at the Chain Expo in a Tang suit, opening in Chinese. He revealed the company has a large backlog of H20 orders awaiting export licenses and expressed interest in buying a Xiaomi car.  
- Tesla’s six-seater Model Y L is set for delivery this fall, priced around 400,000 yuan.  
- Two weeks after its launch, "stock tokenization" shows signs of speculation, with an Amazon-tracking token priced four times the actual stock. Robinhood’s CEO called it "capital-as-a-service."  
- ASML’s Q2 orders surged 41% to €5.54 billion, beating expectations, though management warned 2026 growth may fall short.  
- Goldman Sachs’ Q2 equity trading revenue hit a record $4.3 billion, with investment banking driving a 22% profit rise. Morgan Stanley’s Q2 revenue grew 12% on strong wealth management and trading, though investment banking lagged. Bank of America’s net interest income rose 7%, slightly above forecasts, with trading up for the 13th straight quarter but investment banking weak.  

**Market Close**  
- **Global Stocks**:  
  - S&P 500: +0.32% to 6,263.70  
  - Dow: +0.53% to 44,254.78  
  - Nasdaq: +0.26% to 20,730.49 (record high)  
  - Europe STOXX 600: -0.57% to 541.84  
- **A Shares**:  
  - Shanghai Composite: -0.03% to 3,503.78  
  - Shenzhen Component: -0.22% to 10,720.81  
  - ChiNext: -0.22% to 2,230.19  
- **Bonds**:  
  - 10-year U.S. Treasury yield: -2.6 bps to 4.4553%  
  - 2-year yield: -4.81 bps to 3.8917%  
- **Commodities**:  
  - WTI August crude: -0.21% to $66.38/barrel  
  - Brent September crude: $68.52/barrel  

  - COMEX gold: +0.53% to $3,354.50/oz

**Key News Details**  
**Global Highlights**  

- **Reports Suggest Trump Drafted Letter to Fire Powell; Trump Denies but Hints at "Just Cause"**  
  Media reported that Trump inquired with Republican lawmakers about potentially removing Fed Chair Powell. Florida Rep. Anna Paulina Luna claimed on X: "Heard Powell is getting fired! Very reliable source. 99% sure it’s happening." Later reports indicated Trump had drafted a dismissal letter, sparking market volatility—Treasuries, gold, and Bitcoin rose, while stocks and the dollar fell. Trump later denied immediate plans to oust Powell but suggested "just cause" could justify such a move.  

- **White House NEC Director Hassett Tops List to Succeed Powell; Trump Confirms Consideration**  
  Hassett, a vocal advocate for Trump’s trade, tax, and Fed policies, is reportedly the leading candidate to replace Powell. Trump acknowledged weighing Hassett’s appointment.  

- **Market Fears: 5% Could Become the Floor for 10-Year Treasury Yields if Powell Is Fired**  
  Analysts warn that dismissing Powell or imposing higher tariffs might push 10-year yields beyond 5%, reversing the current ceiling trend.  

- **Trump Plans Tariff Letters to 150+ Nations, Hints at Deals with India and EU**  
  Trump stated the targeted countries are minor trade partners but confirmed progress with India and potential EU negotiations. Earlier, he proposed tariffs exceeding 10% on over 100 nations, including African and Caribbean states.  

- **EU Considers "Anti-Coercion Tool" Against Trump’s 30% Tariff Threat**  
  Led by France, EU members are debating retaliatory measures, such as new taxes and investment restrictions on U.S. firms. The EU Commission deems action premature.  

- **Canada Balances Trade: Limits Lumber Exports to Ease U.S. Tensions, Imposes Steel Quotas**  
  British Columbia’s premier suggested lumber could facilitate a U.S. deal. Canada set steel import quotas at 50% of 2023 levels for non-FTA partners, with 50% tariffs on excess volumes. PM Carney vowed to diversify trade but left anti-U.S. measures open.  

- **South Korea Mulls "Strategic Concessions" in U.S. Tariff Talks Amid Farm Sector Protests**  
  Seoul may relax restrictions on U.S. beef, GMO potatoes, and fruit imports to secure a broader trade deal, sparking agricultural backlash.  

- **U.S. June PPI Hits Near 1-Year Low; Tariff Impact Delayed**  
  Flat monthly PPI reflected service deflation and modest goods inflation, though upward revisions and intermediate demand hinted at future risks.  

- **U.S. June CPI Shows Tariff Effects: Core Goods Rise for First Time Since February**  
  BofA noted tariff-driven inflation in appliances, clothing, and recreational goods. Strong core PCE data could bolster the case for the Fed holding rates steady.  

- **Cryptocurrency Bill Stalemate Clouds Trump’s "Crypto Week"**  
  GOP hardliners insist on merging the *CLARITY Act* with a CBDC ban, risking both bills’ failure amid committee opposition.  

**Corporate Highlights**  
- **NVIDIA’s Jensen Huang at Chain Expo: Dons Tang Suit, Speaks Chinese**  
  Huang praised Chinese AI firms like DeepSeek and Alibaba as global catalysts. He confirmed pending H20 chip shipments, awaiting export licenses, and expressed interest in Xiaomi’s cars, citing close ties with Lei Jun.  

- **Tesla’s 6-Seater Model Y L to Launch This Fall at ~¥400,000**  
  The luxury SUV, positioned between Model Y and X, features a 3m+ wheelbase and 5m length.  

- **Robinhood CEO on Stock Tokenization: "Capital-as-a-Service" Is the Future**  
  Vlad Tenev envisions seamless access to funds via tokenization, though Amazon-tracking token AMZNX traded at 4x the stock price, raising manipulation concerns.  

- **ASML Q2 Orders Surge 41% to €5.54B; 2026 Growth Uncertain**  
  Strong AI-driven demand lifted earnings, but management flagged macro and geopolitical risks.  

- **Banks’ Q2 Earnings: Trading Booms, Investment Banking Lags**  
  - **Goldman Sachs**: Record $4.3B equity trading revenue (+22% profit).  
  - **Morgan Stanley**: Wealth management up 14%, trading +23%, IB down 5%.  
  - **Bank of America**: Net interest income +7%, trading up for 13th quarter.  

**Domestic Macro**  
- **Premier Li Qiang Stresses Boosting Domestic Demand, Regulating EV Competition**  
  Policies will focus on consumption upgrades, new productivity investments, and clearing barriers to household spending.  

- **Urban Work Conference Signals Push for Inclusive Urbanization**  
  Analysts link the decade-late meeting to efforts in unlocking rural-urban consumption potential.  

- **EU-China Auto Dialogue Addresses Tariffs, Investment Climate**  
  Representatives from NIO, XPeng, and Xiaomi discussed EV tariffs and Europe’s investment landscape with EU officials.  

**Domestic Companies**  
- **Pop Mart’s Blowout Earnings: 350% Profit Jump Meets Profit-Taking**  
  JPMorgan notes the results met high buyer expectations but warns of near-term sell pressure ahead of new product launches.  

**Overseas Macro**  
- **Fed Beige Book: Modest Growth, Inflation Mentions at 4-Year Low**  
  "Slowdown" references hit an 8-month high, signaling cooling price pressures.  

- **UK June CPI Surprise: Fuel, Travel Push Inflation to 1-Year High**  
  The data complicates the BOE’s August rate-cut decision, with traders scaling back bets.  

- **Japan’s Upper House Election: A Referendum on "Financial Repression"**  
  The model showcases how negative real rates can stabilize high debt, offering lessons for the U.S.  

**Overseas Companies**  
- **Zuckerberg’s AI Bet: "Spend Whatever It Takes" for Superintelligence**  
  Meta plans trillion-dollar data centers and a top-tier AI team, signaling prolonged spending in the sector.  

- **OpenAI’s ChatGPT Agent Threatens Microsoft Office Dominance**  
  New features allow spreadsheet and presentation edits without Excel or PowerPoint.  

- **Cartier Parent Richemont Q1 Sales Rise 6% on Jewelry Demand**  
  Jewelry grew 11%, while Japan slumped 15% due to a strong yen.  

**Sector/Themes**  
1. **Tin Mining**: Tight supply and rising costs underpin prices amid AI and electronics demand.  
2. **AI Applications**: Open-source models democratize access, empowering industry leaders.  
3. **Semiconductor Testing**: Growth driven by chip R&D and capacity expansion.  
4. **Glufosinate Herbicide**: Prices below cost may rebound on South American/SE Asian demand.  

**Today’s Calendar**  
- U.S. June retail sales, jobless claims, NAHB housing index.  
- Eurozone June CPI.  
- Speeches by Fed officials Waller, Kugler, Cook, and Daly.  

**Disclaimer**: Views expressed are solely the author’s and do not constitute investment advice. The platform disclaims liability for accuracy, completeness, or timeliness, and any losses incurred from reliance on this information.