Breakfast FM-Radio | June 27, 2025

Huajian Morning Voice

Market Overview

On Thursday, the S&P 500 index closed near an all-time high, with technology stocks leading the Nasdaq, and Nvidia closing at a new historical high. Meta rose nearly 2.5%, leading the seven tech giants. Xiaomi once surged nearly 12%, with Lei Jun stating that Xiaomi's YU7 pre-orders exceeded expectations.

U.S. economic data reinforced market expectations for at least two interest rate cuts by the Federal Reserve this year. U.S. Treasury yields fell across the board, with the 2-year Treasury yield dropping over 6 basis points. The dollar index fell for four consecutive days, reaching its lowest point in three years. The onshore and offshore RMB exchange rates against the dollar broke 7.16, hitting a new high in over seven months.

Commodity metals rose broadly, although gold prices fluctuated and closed flat. Platinum rose over 4.9%, and COMEX copper futures surged nearly 3.3% at one point. U.S. crude oil rose nearly 2% during the session, then gave back some gains.

During the Asian session, AH shares collectively declined, with stablecoin concepts surging, Guotai Junan International experiencing a shock of over 100%, government bonds fell back, and the RMB refreshed its high since November last year, with commodities rising.

Key News

The Trump administration will remove the "capital tax" clause 899 from the tax legislation draft.

Federal Reserve officials have been vocal: they are not yet prepared to support interest rate cuts at the July meeting! The White House: Trump will not make a decision on the next Federal Reserve chair candidate in the near future.

The White House stated that the July 9 negotiation deadline is "not important" and may be postponed, as the S&P approaches record highs. The EU is reportedly considering lowering a series of tariffs on the U.S. in hopes of quickly reaching a trade agreement. As the deadline approaches, U.S.-India trade negotiations face obstacles.

In contrast to the U.S., European officials stated that Iran's uranium stockpile is intact, leading to a rise in crude oil prices.

The final value of U.S. Q1 GDP was revised down to -0.5%, with personal consumption showing the weakest performance since the pandemic. The number of people continuing to claim unemployment benefits in the U.S. last week surged to the highest level since November 2021. U.S. durable goods orders in May had an initial month-on-month increase of 16.4%, the largest increase since July 2014.

Xiaomi's press conference: The standard version of YU 7 is priced at 253,500 yuan, AI glasses start at 1,999 yuan, and the company will continue to invest in the field of assisted driving, with plans to upgrade the Xiaomi XLA large model in the second half of the year.

Joseph Tsai and Eddie Wu's letter to shareholders: In the AI era, Alibaba will think and act like a startup.

Market Closing Report

U.S. and European stock markets: The S&P 500 index rose 0.80%, closing at 6141.02 points. The Dow Jones Industrial Average rose 0.94%, closing at 43386.84 points. The Nasdaq rose 0.97%, closing at 20167.91 points. The European STOXX 600 index rose 0.09%, closing at 537.48 points A-shares: The Shanghai Composite Index fell 0.22%, closing at 3448.45 points; the Shenzhen Component Index fell 0.48%, closing at 10343.48 points; the ChiNext Index fell 0.66%, closing at 2114.43 points.

Bond Market: The yield on the 10-year U.S. Treasury bond fell by 4.11 basis points to 4.2495%. The yield on the 2-year U.S. Treasury bond fell by 6.55 basis points to 3.7152%.

Commodities: WTI August crude oil futures rose by 0.49%, closing at $65.24 per barrel. Brent August crude oil futures rose by 0.07%, closing at $67.73 per barrel. COMEX gold futures were flat, closing at $3343.50 per ounce.

News Details

Global Highlights

The Trump administration will remove the "capital tax" clause 899 from the tax legislation draft. On Thursday local time, U.S. Treasury Secretary Basant stated that he requested Congress to remove clause 899 from the "Big Beautiful" tax draft, which is the controversial "capital tax" clause. The U.S. Treasury announced that it has reached an agreement with G7 allies, and after the U.S. agreed to eliminate the clause 899 "retaliatory tax" proposal in the Trump tax plan, U.S. companies will be exempt from some taxes imposed by other countries. Concerns on Wall Street have been alleviated.

Basant's grand strategy: A major shift in U.S. debt. Deutsche Bank believes that the U.S. is facing a dual dilemma of fiscal deficit and trade deficit, and in the absence of a willingness to tighten fiscal policy, the most likely path for the U.S. government is to implement the "Pennsylvania Plan," coordinating through the Treasury to shift U.S. debt holdings from foreign investors to domestic investors. Specific measures may include: attracting foreign funds through stablecoins, encouraging domestic purchases of U.S. debt through regulatory exemptions or tax incentives, etc.

Federal Reserve officials speak out: Not yet ready to support rate cuts at the July meeting! Recently, two Federal Reserve governors appointed by Trump during his first term, Waller and Bowman, both stated that they would support rate cuts at the Federal Reserve's July meeting if inflation remains controlled. However, since then, about ten Federal Reserve officials have poured cold water on this view. On Thursday alone, several officials spoke out, clearly stating that more observation is needed over the next few months to confirm that price increases caused by tariffs will not persistently drive up inflation

• White House: Trump will not make a decision on the next Federal Reserve Chair candidate soon. The White House stated that Trump is not close to making a decision on the successor to Federal Reserve Chair Jerome Powell. Previously, The Wall Street Journal reported that Trump might make a decision as early as this summer.

White House says July 9 negotiation deadline is "not important," may be postponed, S&P approaches record high. White House Press Secretary said on Thursday that the deadline might be postponed, depending on Trump's decision. If negotiations fail, Trump can still set reciprocal tariffs favorable to the U.S. On the same day, the Chair of the White House Council of Economic Advisers stated that he expects the Trump administration to postpone the July 9 deadline for trade partners negotiating in good faith.

• EU reportedly considering lowering a series of tariffs on the U.S. to quickly reach a trade agreement. Media reports indicate that European officials have accepted the idea that the U.S. has no intention of canceling the 10% baseline tariff and are seeking as many exemptions as possible; countries led by Germany and Italy are pushing for a brief preliminary agreement, with details to be discussed later; some European officials urge a tougher negotiating stance before the July 9 deadline; during discussions on the latest U.S. proposal on Thursday night, there were divisions within the EU, with most member states believing that even if many of Trump's tariff measures remain unchanged, reaching a quick agreement with the U.S. is better than waiting for a perfect agreement, but France seeks to completely eliminate tariffs.
• As the deadline approaches, U.S.-India trade negotiations encounter obstacles. Reports indicate that Indian officials revealed that trade negotiations between India and the U.S. have stalled due to differences over tariffs on auto parts, steel, and agricultural imports, making it difficult for both sides to reach an agreement before the tariff deadline set by Trump on July 9.

In contrast to the U.S., European officials claim Iran's uranium stockpile is intact, crude oil rises. Media reports on Thursday stated that preliminary intelligence obtained by European countries indicates that Iran's highly enriched uranium stockpile was not concentrated at Fordow during the U.S. attack but had previously been dispersed to other locations. On Thursday, the U.S. Secretary of Defense stated that there is no known intelligence indicating that Iran has moved enriched uranium; Trump claimed that nothing had been moved from the Iranian nuclear facilities.

U.S. Q1 GDP final value revised down to -0.5%, personal consumption shows weakest performance since the pandemic. The actual GDP of the U.S. in the first quarter reversed the 2.4% growth in Q4 2024, marking the first contraction of the country's economy in three years The final value of personal consumption in the report was significantly revised down to only a 0.5% increase, marking the weakest quarterly performance since the outbreak of the COVID-19 pandemic. The core PCE price index was revised up to 3.5%.

The number of people continuing to claim unemployment benefits in the U.S. surged to the highest level since November 2021. The number of continuing unemployment claims reflects an extended employment cycle for the unemployed, while initial claims remained stable, indicating that companies are reducing hiring but not conducting large-scale layoffs.

U.S. durable goods orders in May showed an initial month-on-month increase of 16.4%, the largest increase since July 2014. This growth was primarily driven by orders for commercial aircraft, which increased by 230% month-on-month.

Xiaomi press conference: The YU 7 standard version is priced at 253,500 yuan, AI glasses start at 1,999 yuan, and the company will continue to invest in the field of assisted driving, with an upgrade to the Xiaomi XLA large model in the second half of the year. Xiaomi's press conference featured many new products, including the phone and Pad family: the MIX Flip 2 with comprehensive upgrades, starting at 5,999 yuan, the K80 Supreme version with a battery life of 2.26 days, the 7S Pro supporting PC-level software, and the small-sized K Pad with full performance; AI glasses: first-person camera, open-ear headphones, and portable AI entry, starting at 1,999 yuan. The Xiaomi YU7 comes in nine colors, starting at 253,500 yuan. Xiaomi also stated that it will continue to invest in the field of assisted driving, with an upgrade to the Xiaomi XLA large model expected in the second half of this year.

Joseph Tsai and Eddie Wu's letter to shareholders: In the AI era, Alibaba will think and act like a startup. Alibaba Group's revenue for the fiscal year 2025 is expected to reach 996.347 billion yuan, with net profit increasing by 76.81% year-on-year to 125.976 billion yuan. Driven by strong demand for AI, Alibaba Cloud's fiscal year revenue has surpassed double-digit growth, and revenue from AI-related products has achieved triple-digit year-on-year growth for seven consecutive quarters.

Domestic Macro

The National Development and Reform Commission: The third batch of funds for replacing old consumer goods will be issued in July. Relevant departments previously stated that there will be no changes to the policy of expanding the replacement of old consumer goods in the second half of the year, and the progress of subsidy fund usage is in line with expectations. An additional 138 billion yuan of central funds will be issued in batches in the third and fourth quarters.

Hong Kong releases Digital Asset Development Policy Declaration 2.0! It will promote the tokenization of precious metals such as gold, non-ferrous metals, and new energy. The "Policy Declaration 2.0" proposes a four-strategy framework called "LEAP" to help Hong Kong build a global digital asset center, promoting the tokenization of real-world assets such as precious metals, non-ferrous metals, and renewable energy, showcasing the diverse applications of technology At the same time, the licensing mechanism for stablecoin issuers was implemented on August 1, with the Hong Kong Securities and Futures Commission serving as the main regulatory body for digital asset trading service and custody service providers, establishing a unified regulatory framework.

Domestic Companies/Industries

Morgan Stanley Interpretation: Why Did Brokerage Stocks Surge?? Morgan Stanley stated that in the past five days, H-shares and A-shares of brokerage stocks rose by an average of 12.6% and 6.3%, respectively, significantly outperforming the market. This is mainly driven by the easing of global geopolitical uncertainties, increased trading activity in Hong Kong stocks, and positive regulatory signals released at events such as the Lujiazui Forum.

Pop Mart Has More Than Just Labubu. HSBC stated that Pop Mart's multi-IP strategy is showing results, with new series releases and other IPs continuously stimulating consumer interest. The price reduction of Labubu is a healthy adjustment that helps reduce speculative hoarding behavior and maintain the company's long-term growth prospects. HSBC raised its target price by 53.8% to HKD 331.50, implying a 32% upside from the current stock price.

Lao Pu Gold's First Overseas Battle is a Success: Strong Customer Flow, 95% Local Customers, 4-10 Orders per Hour. JP Morgan stated that Lao Pu Gold's store at Marina Bay Sands in Singapore saw a continuous flow of customers from the 23rd to the 24th, with a sales conversion rate exceeding 95%, processing 4-10 orders per hour. JP Morgan raised Lao Pu Gold's target price from HKD 1,149 to HKD 1,249, expecting a compound annual growth rate of 68% and 76% for sales and net profit from 2025 to 2027, respectively.

New Taiwan Dollar Surge Raises Export Concerns, TSMC to Inject $10 Billion into Overseas Subsidiaries, the Largest in History. This is the company's largest capital operation to hedge against exchange rate risks. Analysts believe this injection will help TSMC reduce foreign exchange hedging costs, enhance capital flexibility in managing exchange rate risks, and match dollar revenues with dollar liabilities through natural hedging strategies, thereby reducing the direct impact of foreign exchange conversion risks on performance.

Overseas Macro

UBS: The Current "Short Squeeze" in US Stocks Has Ended, It's Time to Sell. UBS warns that the current short squeeze in US stocks has reached its end: its tracked short squeeze index recently surged by 43%, but indicators measuring real risk appetite have continued to weaken. Historical patterns show that after a similar strong short squeeze, the S&P 500 and Nasdaq indices average declines of 11% and 13%, respectively, within three months. Meanwhile, the current liquidity situation is further deteriorating, with retail investors, foreign capital, and pension funds expected to continue selling, and corporate buybacks will also enter a quiet period In this quarter, nearly $11 billion has flowed out of U.S. long-term bond funds, marking the largest withdrawal wave since 2020, highlighting the market's deep concerns over the U.S. massive debt burden and ongoing inflation pressures. In contrast, funds continue to flow into funds holding short-term U.S. bonds.

New York City mayoral primary shocks Wall Street and the Democrats: tax the wealthy, subsidize rent, free buses, and state-run grocery stores! 33-year-old leftist political newcomer Zohran Mamdani advocates for taxing the rich, freezing rents, providing free bus services, and opening government-operated grocery stores, policies that are seen as a significant challenge to the traditional market economy model. Wall Street reacted strongly to this outcome, with several financial leaders publicly expressing concerns, and some financial executives have even begun considering relocating their businesses and families out of New York.

The U.S. is seizing copper, while non-U.S. regions face shortages! Goldman Sachs raises copper price forecast for the second half of the year, expecting a peak in August. Goldman Sachs stated that the Section 232 copper import investigation has caused severe distortions in the copper market. The U.S. has over-imported about 400,000 tons of copper, leading to inventories surging to over 100 days of consumption, while non-U.S. regions have inventories of less than 10 days. The forecast for copper prices in the second half of the year has been raised to $9,890 per ton, with an expected peak of $10,050 per ton in August. They reiterated the recommendation to go long on the December COMEX-LME copper arbitrage trade, believing the market has underestimated the likelihood of high tariffs being implemented.

Overseas Companies

Goldman Sachs deep dive: How will AI disrupt advertising? As tech giants struggle with AI profitability, Goldman Sachs finds that the advertising industry may be the first massive market to be restructured by AI, with a $470 billion industry profit pool set to be disrupted by AI, including $170 billion in traditional advertising accelerating digitalization, $114 billion in advertising creative cost savings, $25 billion in intermediary consolidation, and $161 billion in reshaping agency models. Tech giants Google and Meta, due to data, technology, and capital barriers, may be the first to benefit from AI advertising dividends.

The root of the conflict between Microsoft and OpenAI: AGI. OpenAI and Microsoft are embroiled in a contractual crisis over the definition of artificial general intelligence (AGI). Microsoft is demanding the removal of the clause "the technology license can be terminated upon achieving AGI," but negotiations have stalled. Altman claims AGI is just around the corner, while Nadella questions its standards. The dispute jeopardizes OpenAI's IPO plans, and the rift in their cooperation has extended to computing power competition, technology concealment, and alternative R&D.

Millions of books given for free to train AI? Meta wins AI copyright case, U.S. court: fair use! The judge ruled that Meta's use of millions of books to train its artificial intelligence model falls under "fair use." This is a significant victory for technology companies.

Meta poaches three core researchers from OpenAI, Zuckerberg's "money power" proves effective. Meta successfully poached three core founding researchers from OpenAI's Zurich office, marking a key step in Zuckerberg's plan to build a "super-intelligent team": he not only offered top talent a compensation package exceeding $100 million but also personally contacted the target researchers via WhatsApp. Interestingly, OpenAI CEO Sam Altman recently publicly mocked Meta's "money-spending" strategy, claiming that "none of our best talents have left" and questioning whether Meta's reliance on money rather than a mission-driven culture can attract truly top talent.

Tesla's executive turmoil, reports: Musk fired close friend executive Afshar, HR director leaves. Omead Afshar, a key executive at Tesla and one of Musk's closest friends, has left the company. Analysts point out that this is the latest executive personnel change during a turbulent period for Tesla, highlighting a year of instability for the company.

Industry/Concepts

1. Medical Devices: Huafu Securities pointed out that in the treatment of atrial fibrillation, PFA technology has significant advantages over drug treatment and is expected to become the next high-demand product track for medical devices. Domestic companies are accelerating their layout for listing, with 2025 expected to usher in the commercialization year.

2. Military Industry: Founder Securities' research report noted that historically, the military industry sector shows significant elasticity before major parades, with new combat capabilities and military trade expected to become key focus areas. High attention is given to underwater equipment, combat robots, and information technology branches.

3. Unmanned Forklifts: Dongfang Securities' research report indicated that with the rapid development of embodied intelligence, the market is increasingly focused on future landing scenarios. Among various scenarios in the C-end or B-end, logistics handling scenarios are expected to become the first landing scene for embodied intelligent robots.

4. Offshore Wind Power: Guosheng Securities' research report pointed out that the global offshore wind market is entering a growth cycle, with Europe being the main direction for offshore wind market expansion. There is a shortage of local production capacity in Europe, making it a good time for domestic companies to export submarine cables, monopiles, and main engines.

Today's News Preview

China's May industrial enterprises above designated size profits.

Japan's June Tokyo CPI.

U.S. May personal income, consumption expenditure, core PCE price index.

U.S. June University of Michigan consumer confidence index final value.

New York Fed President John Williams, Cleveland Fed President Loretta Mester, and Fed Governor Michelle Bowman will speak.