Breakfast | Oracle's largest single-day increase since 1992

Market Overview

Tech stocks support S&P and Nasdaq continue to hit new highs, with the S&P and Nasdaq rising for three consecutive days, while the Dow retreated, temporarily leaving record highs; Oracle surged 36%, marking its largest increase since 1992, driving AI chip stocks up, with Broadcom rising nearly 10% and Nvidia up nearly 4%; firearm stock Smith & Wesson closed up 6.7%; the China concept index fell nearly 1% against the trend, with Nio down nearly 9%.

US PPI strengthens rate cut expectations, US Treasury prices rebound, with yields accelerating their decline after the PPI announcement. The auction of 10-year US Treasuries was strong, with the yield hitting a five-month low.

After the PPI announcement, the US dollar index turned down, approaching a two-month low. The offshore yuan rose more than 100 points during the day, breaking through 7.12, nearing a ten-month high.

Crude oil rose for three consecutive days to a one-week high, with intraday gains exceeding 2% for two days. Gold turned to rise during the day, approaching record highs. London copper rebounded 1%, breaking the $10,000 mark for the first time in two months.

In the Asian session, the ChiNext rose over 1%, AI hardware stocks collectively rebounded, and "trillion-dollar giant" Foxconn Technology hit the daily limit, with the Hang Seng Index standing above 26,000 points for four consecutive rises, and tech stocks were active.

Key News

Wang Yi had a phone call with US Secretary of State Rubio.

National Development and Reform Commission Zheng Zhanjie: Strive to achieve the annual economic and social development goals, continuously releasing domestic demand potential in the second half of the year, and further promoting the deep integration of technological innovation and industrial innovation.

Finance Minister Lan Fo'an: Place greater emphasis on strengthening the domestic circulation, continuously exert efforts and timely increase the implementation of more proactive macro policies, fully support stable employment and stable foreign trade.

China's August CPI fell 0.4% year-on-year, with core CPI rising to 0.9%, and PPI's year-on-year decline narrowing to 2.9%.

US inflation unexpectedly dropped, with August PPI down 0.1% month-on-month, turning negative for the first time in four months, and the year-on-year growth rate of 2.6% was below expectations. After the PPI announcement, Trump stated: There is no inflation, Powell must immediately cut rates significantly.

Federal Reserve Governor Cook may participate in the Federal Reserve's decision-making vote next week, a judge blocks Trump's removal, and the US Department of Justice quickly appeals. Milan's nomination as a Federal Reserve governor was approved by the Senate committee vote.

Trump ally and head of a conservative political organization in the US, Kirk, was shot dead, causing firearm stocks to surge in the US stock market.

Oracle closed up nearly 36%, marking its largest daily increase since 1992, with its market capitalization briefly exceeding $950 billion; Bloomberg Billionaires Index shows that Oracle founder Ellison surpassed Musk, ranking first as the world's richest for the first time.

Reports: Oracle signed a $300 billion computing agreement with OpenAI, with a power demand of 4.5 GW. Broadcom's CEO stated that AI revenue will surpass other revenue totals within two years, with cloud giants dominating ASIC chips, and companies will continue to rely on GPUs. Google Cloud expects its revenue to double in the next two years, with orders reaching as high as $106 billion

Musk: The most difficult part of robot manufacturing is the hand, Tesla's new generation AI5 chip performance has increased by 40 times.

Alibaba activates offline business, the first step in-store: Gaode creates rankings, redoing a set of offline credit systems.

Market Report

US and European Stock Markets: The S&P 500 rose 0.30%, closing at 6532.04 points. The Dow Jones fell 0.48%, closing at 45490.92 points. The Nasdaq rose 0.03%, closing at 21886.06 points. The European STOXX 600 index fell 0.02%, closing at 552.29 points.

A-shares: The Shanghai Composite Index rose 0.13%, closing at 3812.22 points; the Shenzhen Component Index rose 0.38%, closing at 12557.68 points; the ChiNext Index rose 1.27%, closing at 2904.27 points.

Bond Market: By the end of the bond market, the yield on the US ten-year benchmark Treasury bond was about 4.05%, down about 4 basis points during the day; the two-year Treasury yield was about 3.54%, down about 2 basis points during the day.

Commodities: WTI October crude oil futures rose 1.66%, closing at $63.67 per barrel. Brent November crude oil futures rose 1.65%, closing at $67.49 per barrel. COMEX December gold futures slightly fell by $0.2, closing at $3682 per ounce. London copper rose about 1%, closing at $10013 per ton.

News Details

Global Highlights

Wang Yi speaks with US Secretary of State Rubio on the phone. According to Xinhua News Agency, Wang Yi stated that the two giant ships of China and the US must move forward together, without deviating or losing speed, and must adhere to the strategic guidance of the two heads of state without wavering, and implement the important consensus of the two heads of state without discount. The recent negative actions and words of the US side have harmed China's legitimate rights and interests, interfered in China's internal affairs, and are not conducive to the improvement and development of China-US relations, which China firmly opposes. Especially on issues involving China's core interests, such as Taiwan, the US side must be cautious in words and actions. China and the US fought side by side during World War II to defeat militarism and fascism, and should also cooperate in the new era for world peace and prosperity, addressing various global challenges and fulfilling the responsibilities that great powers should undertake.

Strive to achieve the annual economic and social development goals—Key points of China's economic work in the second half of the year from the plan execution report. According to Xinhua News Agency, Zheng Zhanjie, director of the National Development and Reform Commission, pointed out in the report that it is necessary to accelerate stabilizing employment, stabilizing enterprises, stabilizing the market, and stabilizing expectations, and promote the implementation of relevant measures to achieve results; Implement more proactive fiscal policies and moderately loose monetary policies; continuously unleash the potential of domestic demand; further promote the deep integration of technological innovation and industrial innovation, unswervingly deepen reforms and expand opening up, continuously work to prevent and resolve risks in key areas, comprehensively promote regional coordinated development and urban-rural integration development, drive green and low-carbon development through comprehensive transformation with dual control of carbon emissions, take multiple measures to ensure and improve people's livelihoods, and strengthen safety capability construction in key areas.

Finance Minister Lan Fang'an: Place greater emphasis on strengthening the domestic circulation, continuously exert efforts and timely increase the implementation of more proactive and effective macro policies. Lan Fang'an's report to the Standing Committee of the National People's Congress clearly states that more proactive fiscal policies will be effectively utilized. The report points out that the next steps will focus on the following work: fully support stable employment and stable foreign trade; accelerate the cultivation and development of new growth drivers; further ensure and improve people's livelihoods; continuously work to prevent and resolve risks in key areas; continuously enhance the effectiveness and level of fiscal governance; and strictly implement the requirement to live frugally.

China's August CPI fell by 0.4% year-on-year, while core CPI growth rebounded to 0.9%, and PPI's year-on-year decline narrowed to 2.9%. The year-on-year increase in core CPI expanded for the fourth consecutive month in August, with prices of gold and platinum jewelry rising by 36.7% and 29.8% year-on-year, respectively, collectively contributing about 0.22 percentage points to the year-on-year increase in CPI. The year-on-year CPI turned from flat to decline in August, mainly due to the high comparison base from the same period last year combined with this month's food price increase being lower than seasonal levels.

• Minsheng Macro believes that the inflation situation in August can be described as "uneven," which is reflected not only in the divergence between CPI and PPI but also permeates the internal structure of each. Unlike the year-on-year decline in CPI, core CPI continues to show a steady upward trend, demonstrating certain resilience; meanwhile, PPI has initially stabilized under the leadership of upstream industries, reflecting that the previous production restriction measures on state-owned enterprises in the upstream are beginning to take effect. With the gradual arrival of remaining national subsidy funds for the year and the further implementation of the "Special Action Plan to Boost Consumption," core CPI year-on-year is expected to maintain relative resilience.
• Guosheng Securities believes that the year-on-year CPI turned negative again in August, with month-on-month performance weaker than seasonal levels, mainly affected by weak food prices, and the rising base also dragged it down; the year-on-year decline in PPI narrowed, and month-on-month stopped falling, ending eight consecutive months of decline, with the "anti-involution" price support effect beginning to show.

U.S. inflation unexpectedly fell, August PPI month-on-month -0.1%, turning negative for the first time in four months, with a year-on-year growth rate of 2.6% lower than expected Wall Street expects the U.S. August PPI to grow by 0.3% month-on-month, with July's month-on-month growth rate revised down to 0.7%. The decline in service costs offsets the rise in commodity prices; however, the increase in intermediate demand prices suggests future pressure. After the data was released, traders increased their bets on the Federal Reserve cutting interest rates.

• After the PPI announcement, Trump: There is no inflation, Powell must immediately cut rates significantly.

Federal Reserve Governor Cook may participate in the Fed's decision-making vote next week, judge blocks Trump's removal, case will go to the U.S. Supreme Court. The judge pointed out that Cook's side has convincingly demonstrated that the removal violates the "for cause removal" clause in the Federal Reserve Act. Analysts indicate that unless the appellate court stays this ruling, Cook will be able to participate in next week's Fed meeting. Just as the judge blocked Cook's removal, the U.S. Department of Justice appealed. Many observers believe that the final battleground of this lawsuit will be the U.S. Supreme Court.

The nomination of Milan as a Federal Reserve Governor has been approved by the Senate committee. The U.S. Senate Banking Committee voted to approve Trump's nomination of White House senior economic advisor Stephen Milan as a Federal Reserve Governor, serving for at least several months. The nomination passed with a partisan split of 13 votes to 11. Milan's appointment is expected to be confirmed by the full Senate next Monday. Republicans are quickly taking action to ensure Milan takes office before next week's Fed FOMC meeting.

Trump ally shot dead, U.S. gun stocks surge. Charlie Kirk, head of a conservative political organization opposing stricter gun control, was shot dead on Wednesday. Following the shooting, gun stocks Smith & Wesson rose 6.7%, American Outdoor increased nearly 5.3%, and Sturm Ruger gained 3%.

Massive orders shock the market! Oracle, Broadcom, and even Google have all been "exploded" by OpenAI. OpenAI has signed a massive cloud infrastructure contract with Oracle, becoming Broadcom's fourth custom AI chip major client, and reached a computing power cooperation with Google Cloud. OpenAI is pulling the entire tech supply chain into a high-speed "arms race" as "the most capital-intensive startup in history."

• Ellison surpasses Musk to become the world's richest person. By the close, according to the Bloomberg Billionaires Index, Oracle founder Ellison's personal net worth surged by $89 billion in a single day, marking the largest single-day increase in personal wealth on record, bringing Ellison's personal fortune to $383.2 billion Surpassing Musk, he has ascended to the top of the global rich list for the first time.
• Oracle's stock rose nearly 36%, marking the largest single-day increase since 1992, with a market capitalization briefly surpassing $950 billion. During trading, Oracle's market value exceeded that of JP Morgan, Walmart, Eli Lilly, and Visa, making it the 10th largest company by market capitalization in the S&P 500 index, closely trailing Berkshire Hathaway owned by Buffett.
• Report: Oracle signs a $300 billion computing agreement with OpenAI, requiring 4.5 GW of power. OpenAI has signed a contract to purchase $300 billion worth of computing power from Oracle over the next approximately five years. The agreement will take effect in 2027, with the required 4.5 GW power capacity equivalent to the output of two Hoover Dams, sufficient to supply electricity to about 4 million households.
• Broadcom CEO: AI revenue will surpass total revenue from other sources within two years, cloud giants will dominate ASIC chips, and enterprises will continue to rely on GPUs. Broadcom CEO Hock Tan expects the company's AI-related revenue to exceed the total revenue from software and non-AI businesses within two years. He has also set a target for AI revenue to reach up to $120 billion by fiscal year 2030, directly linked to CEO compensation. He pointed out that the AI chip market will see differentiation in the future—large cloud service providers will dominate the application of customized ASIC chips, while a broad range of enterprise customers will continue to rely on general-purpose GPUs.
• Google Cloud expects to double its revenue in the next two years, with orders reaching $106 billion! Google Cloud CEO Thomas Kurian revealed that the growth rate of these unfulfilled orders even exceeds revenue growth, indicating that Google Cloud is not only expanding its revenue scale but also accumulating more future revenue guarantees. This strong growth is primarily driven by a surge in AI processing demand, with tech giants competing to expand data center capacity. Google Cloud's revenue in the second quarter increased by 32% year-on-year, reaching $13.6 billion.

Musk: The hardest part of robot manufacturing is the hand, the new generation AI5 chip has a 40-fold performance increase. Musk claims that the Optimus robot will be "the greatest product in human history," with the V3 version addressing three major challenges: hand flexibility, AI brain, and mass production; the Tesla AI5 chip has achieved a 40-fold performance improvement compared to AI4, with computing power increasing by 8 times and memory increasing by 9 times; an AI that is smarter than a single human in all aspects is expected to appear as early as next year; SpaceX will demonstrate the full reusability of the Starship next year After three months of plotting, Alibaba has unleashed a game-changer to activate offline commerce.

• Alibaba's first step into offline: Gaode creates rankings and rebuilds an offline credit system. Following its entry into the food delivery battle, Alibaba is making a significant investment in offline business again. Gaode announced on Wednesday the launch of the "Gaode Street Ranking," which ranks based on the number of people navigated to stores, repurchase rates, special trips, and crowd width, mainly divided into three categories: food, hotels, and scenic spots. The scoring criteria are completely transparent, aiming to create a "real and credible ranking" and cultivate Gaode into an "offline entry that can rival Taobao."
• Why is Alibaba letting Gaode go "street sweeping" with 1 billion yuan? Faced with Meituan's market leadership and competition from Douyin, Alibaba urgently needs to break through the bottleneck of its online business. Gaode has 120 million daily active users and rich geographical data, making it naturally suitable for undertaking offline business. By launching the "Gaode Street Ranking" and the "Good Store Support Program," Alibaba hopes to leverage its ecological synergy advantages, integrating resources such as payment, e-commerce, and maps to create a complete commercial closed loop and capture a larger share of the 25 trillion yuan local life service market.

AI demand remains strong, TSMC's August sales increased by 33.8% year-on-year. TSMC announced that its sales in August reached NT$335.77 billion, a year-on-year increase of 33.8% and a month-on-month increase of 3.9%; the cumulative sales from January to August reached NT$2.43 trillion, a year-on-year increase of 37.1%. TSMC's strong performance once again confirms the accelerated trend of AI infrastructure construction.

NASDAQ CEO explains "transformation direction": tokenized trading, tokenized IPOs, 24/7 trading. Adena Friedman announced that NASDAQ will move towards stock tokenization, embedding blockchain technology directly into the core securities trading system, rather than being limited to over-the-counter or ancillary markets; it will actively promote "direct listings with financing functions." Additionally, trading hours will gradually move towards five days a week, 24 hours a day, and even 7 days a week in the future.

Domestic Macro

German Chancellor mentions China in a rare speech: "We will seek cooperation in all possible areas". According to Global Times, when discussing China, Merz reiterated that the German federal government will seek cooperation as much as possible. "Regarding our policy towards China, we will seek cooperation in all possible areas, whether in climate policy, global crisis response issues, or many other challenges." Analysts point out that this speech is rare, with the last similar speech occurring in 2000 South Korean media: Lee Jae-myung demands sanctions against anti-China rallies, criticizes participants for attempting to worsen bilateral relations. According to Global Times, South Korean President Lee Jae-myung strongly condemned the anti-China rally in Myeongdong, Seoul, during a state council meeting, stating that it is "not freedom of speech, but a disturbance," and called for relevant departments to actively formulate sanction plans. Lee criticized the participants for deliberately insulting Chinese tourists and worsening bilateral relations, believing that mere warnings are insufficient and that punitive measures should be explored within the current legal framework.

Domestic Companies

Domestic Nano Banana is here, ByteDance's Seedream 4.0 released, aiming to retire PS early. Compared to the previous version, Seedream 4.0 features extremely strong thematic consistency, multi-image flexible creation, and high-definition 4K output, with very fast output speed, fully comparable to Google's nano banana model. Its core breakthrough lies in integrating text-to-image (T2I) and image editing into a single DiT architecture, utilizing a high compression ratio VAE and a carefully designed DiT architecture to achieve over 10 times improvement in training and inference speed.

Overseas Macro

Annual non-farm payrolls significantly revised down, Bessenet calls on the Federal Reserve to cut interest rates as soon as possible. Bessenet publicly urged the Federal Reserve on Wednesday to reassess its policies, citing that the latest revised employment data indicates that the economic conditions inherited from the Trump administration are much weaker than previously reported. He quoted Keynes, saying, "When the facts change, I change my mind."

Is the market "disbelieving" high inflation? JP Morgan: It's been 5 years, and we're still being fooled! JP Morgan warned that central banks in developed markets have severely underestimated the persistence of inflation for five consecutive years, with the core inflation rate expected to reach 3% by 2025, significantly exceeding the 2% target set by central banks for the fifth consecutive year. Despite repeated forecasting errors, the market still gives high marks to central banks' ability to control inflation. JP Morgan is particularly concerned about the "five-year curse" risk, as history shows that persistent inflation deviations may affect long-term expectations after five years. The bank gives a 45% probability of sticky inflation and warns to prepare for "higher for longer" interest rates.

Overseas Companies

Altman outlines a ten-year roadmap for AI: "Intelligence is like electricity," any software can be generated in seconds, and a 10-person company can earn 1 billion a year. Altman predicts that in ten years, the cost of AI will converge with the cost of electricity, with computing power and energy becoming the core of value; although AI will be capable of performing "almost all intellectual work," professions that require deep emotional connections and empathy—such as teachers, nurses, and elder care—will become more precious, as "biological program design is very difficult to overcome." "He advised investors not to spend time looking for the next AI research lab, but to 'invest 100% of their time in the new species made possible by AGI.'

'European Huabei' Klarna's US stock debut surged over 40% at one point, major investor Red Shirt profits exceed $3 billion. Klarna's IPO issuance price is at least 8% higher than the guidance range, raising $1.37 billion, opening up 30%, and based on the opening price, the company's valuation is close to $20 billion, closing up less than 15%. Before the listing, media reported that Sequoia had cumulatively invested about $500 million in the company since 2010, and the listing will bring them over 6 times the investment return.

JP Morgan comments on Apple's launch event: mixed feelings, Air is too expensive, Pro has better 'cost performance', base model 'can receive Chinese subsidies'. JP Morgan stated that the iPhone Air adopts a brand new design concept, but the functionality configuration seems insufficient in cost performance relative to the $999 price, which may suppress sales. In contrast, the Pro series has comprehensive functional upgrades and more attractive pricing, which will become the main growth driver. The iPhone 17 base model maintains a price of $799 but increases storage to 256GB, aligning with Chinese subsidy policies, which is expected to help recovery in China. The firm maintains an 'overweight' rating on Apple stock.

iPhone's 'small moves' hold the stage, does Apple still need to hold back its AI big move? The main iPhone product at Apple's fall launch event has changed compared to last year: the Plus model has been replaced with an ultra-thin Air version, and the base model starts at 256GB without a price increase, but both changes are just 'minor tweaks' without significant innovation. Against the backdrop of increased AI investments from major manufacturers, Apple's launch event narrative on AI remains sparse. If the company wants to break through the valuation ceiling, it still needs to demonstrate stronger AI innovation capabilities.

NVIDIA competes in the 'inference era', new Rubin CPX GPU 'invest $100 million, $5 billion in inference revenue, 50 times return rate'! Citigroup stated that NVIDIA has launched the Rubin CPX GPU designed specifically for long-context inference, promising customers a 50 times return on investment, far exceeding the 10 times return rate of the GB200 NVL72. This chip's performance in attention mechanisms is 3 times better than the GB300 NVL72. The NVIDIA GB300 NVL72 system set a new record in the MLPerf inference benchmark test. These releases indicate that the inference era has arrived.

Cloud demand is too strong, Goldman Sachs significantly raises AI server market forecast Goldman Sachs stated that driven by strong demand from hyperscale and second-tier cloud vendors, the AI server market forecast for 2029 has soared from $386 billion to $581 billion, with a compound annual growth rate of 38%. This AI arms race is causing a dramatic shift in market dynamics, with Dell's share in the critical second-tier cloud sector surging to 46%, making it the biggest winner; meanwhile, the previously strong share of Advanced Micro Devices has dropped to 29%, facing severe challenges.

The "Digital Asset Treasury Company" model is at a "crossroads," with early movers' stock prices plummeting and small companies "continuously entering". The Digital Asset Treasury Company (DATs) model is facing severe challenges. The average stock price of 15 tracked DATs fell by 15% last week, with some companies experiencing declines of up to 80%. Currently, over 100 companies have transformed to join, leading to market saturation and low differentiation. In August, these companies purchased only 14,800 bitcoins, a significant drop from June. Additionally, complex financing tools increase operational risks, and tightening regulations require shareholder approval for new stock issuance, impacting their core financing model.

Amazon is reported to be developing AR glasses, codenamed "Jayhawk," directly competing with Meta. Amazon is developing a consumer-facing augmented reality glasses, codenamed Jayhawk, directly challenging Meta's position in the AR device market. Amazon's AR glasses will be equipped with a microphone, speakers, camera, and a single-eye full-color display, with plans to launch the product by the end of 2026 or early 2027.

The competition in weight loss drugs is fierce, Novo Nordisk is laying off 9,000 employees globally, accounting for 11% of its total workforce, and has lowered its profit forecast for the third time this year. The company expects its operating profit for the year to grow by 4% to 10%, far below the previous maximum growth forecast of 27%.

Today's News Preview

U.S. August CPI.

U.S. initial jobless claims last week.

U.S. August government budget.

European Central Bank announces interest rate decision, President Lagarde holds a monetary policy press conference.

OPEC releases monthly oil market report.

IEA releases monthly oil market report.

Adobe releases financial report.