Breakfast | Chinese concept stocks soar, Alibaba rises nearly 9%! Trump tariffs "give some leeway," automotive stocks surge

Market Overview

Trump announced a tariff exemption for car manufacturers, leading to a rebound in U.S. stocks across the board, reversing the downward trend of the previous two days. The automotive sector performed exceptionally well, with Stellantis shares rising over 9%, General Motors up over 7%, and Ford increasing nearly 6%.

Among the "Tech Seven," only Apple saw a decline, while Microsoft rose over 3%, leading the Dow Jones; Meta increased by 2.57%, Amazon by 2.24%, Google A by 1.23%, and NVIDIA by 1.13%; Tesla rose by 2.6%, as Musk's political involvement faced backlash, with Tesla's February sales in Germany plummeting 76% year-on-year; Apple closed down 0.08%, having released a new MacBook Air featuring the M4 chip, with a price reduction of $100.

The China Concept Index closed up over 6%, reaching a five-month high, with Alibaba rising nearly 9%, XPeng increasing over 7%, and PDD up 6%.

Chinese Government Work Report Released

Chinese Premier Li Qiang proposed in the government work report that China's GDP growth target for 2025 is around 5%, with a CPI increase of about 2% and a deficit ratio of around 4%, aiming for greater efforts to promote the healthy development of the real estate and stock markets.

Minsheng Macro pointed out five key signals worth noting in this report: the emphasis on timely and sufficient policy implementation; a noticeable increase in the frequency of "consumption" mentioned; a marginal increase in the "content" of technology in industries; a continuation of the "moderately loose" monetary tone, with a potential window for a reserve requirement ratio cut under the demand to "race against uncertainty." The fiscal policy is set for a significant "breakthrough," with the deficit ratio set at 4%, and the new special bond quota exceeding 4 trillion yuan for the first time, while special government bonds will debut in two forms.

Key Points from Trump's Congressional Speech: Tariffs to Continue, Seeking Repeal of the CHIPS Act, U.S.-Ukraine Mineral Agreement to be Signed Soon

Trump reiterated that reducing federal spending would help cut debt, lower mortgage rates, and balance the federal budget. He praised the decline in interest rates and stated he would seek permanent comprehensive tax cuts, urging Congress to pass tax reduction measures. Regarding chips, Trump stated that the U.S. should repeal the $52 billion subsidy plan under the CHIPS Act and use the funds from that act to reduce debt.

Trump Gives Automotive Tariffs a Breather

The U.S. granted a one-month tariff exemption for cars imported through the USMCA from Canada and Mexico, reportedly to Canada's discontent. Canadian officials stated that Canada would not end retaliatory tariffs unless the U.S. fully cancels tariffs on Canada; any proposal for Canada to completely eliminate retaliatory tariffs in exchange for the U.S. reducing some tariffs would be rejected by Trudeau. Alberta, Canada's largest oil-producing province, announced a suspension of purchases of alcoholic beverages from the U.S.

Investment Bank's Sharp Commentary on NVIDIA: Optimistic!

Bernstein stated that NVIDIA's current valuation is becoming increasingly attractive, with its forward P/E ratio around 25 times, marking a one-year low, while NVIDIA indicated that demand would continue to exceed supply in the coming quarters. Historically, when NVIDIA's P/E ratio falls to 25 times or below, investors typically enjoy substantial returns.

Xiaomi's "Overnight Success": Where Did the Trillion Come From and Where Is It Going?

Analysts believe that Xiaomi's market capitalization has reached a trillion due to a shift in market expectations regarding its automotive business: the valuation perspective has shifted from a short-term view to a medium- to long-term viewIn the process of soaring towards a valuation of HKD 1 trillion, the automotive sector contributed half of the incremental growth. To exceed the current valuation space, further optimistic scenarios may need to be played out, such as replicating the success of SU 7 after the release of YU 7, with orders completely unscathed and a massive backlog of orders.

Alibaba launches a brand new reasoning model, with only 1/20 the parameters comparable to DeepSeek R1

The Alibaba Qwen team officially released their latest research achievement - the QwQ-32B large language model. This model has 32 billion parameters and its performance can rival that of DeepSeek-R1, which has 671 billion parameters (of which 37 billion are activated).

Apple releases new MacBook Air: equipped with M4 chip, price drops by $100

Apple Inc. launched the new MacBook Air on Wednesday, featuring the M4 chip, upgraded camera, and support for multiple external displays. Despite the new tariffs in the U.S. taking effect, Apple went against the trend, reducing the starting prices of the 13-inch and 15-inch models to $999 and $1,099, respectively. Additionally, Apple introduced the new Mac Studio, with the highest configuration upgraded to the M3 Ultra chip. Both new products will be available for sale on March 12.

Major update to Google's flagship product, testing "AI Mode" new search, smarter!

Google announced the testing of a new search mode called "AI Mode," which allows users to ask complex questions and receive integrated answers. Unlike traditional keyword searches, this mode can run multiple related queries in parallel and predict user interest points.

China's February Caixin Services PMI at 51.4, expansion trend remains robust

In February, the new export orders index jumped 1.8 percentage points to 50.6, returning above the boom-bust line for the first time in three months. Businesses generally believe that market conditions will strengthen and the economic environment will improve.

U.S. February ISM Services PMI unexpectedly rises to 53.5, above the expected 52.5 and January's 52.8

The employment sub-index has risen for three consecutive months, reaching the highest level since December 2021. The index measuring the costs of materials and services has risen to one of the highest readings since the beginning of 2023.

U.S. February "small non-farm" ADP employment growth unexpectedly drops to 77,000, the smallest increase in seven months

This figure fell short of the expected 140,000, down from 183,000 in January. The slowdown in growth may be due to policy uncertainty and a slowdown in consumer spending, leading to layoffs or hiring slowdowns last month