Breakfast | Musk increases holdings to boost Tesla, US tech stocks strengthen

Market Overview

Investors almost view the Federal Reserve's interest rate cut this week as a "done deal," with strong performance in tech stocks, the S&P 500 surpassing 6,600 points, and the Nasdaq hitting a record closing high for the sixth consecutive trading day. Tesla has risen for three consecutive days, gaining over 7% intraday and recovering losses for the year. Google rose nearly 4.5%, entering the $3 trillion market cap club. Coreweave surged over 7.6%.

According to Xinhua News Agency, China and the U.S. have reached a basic framework consensus on properly resolving the TikTok issue. The Nasdaq Golden Dragon China Index closed up 0.87%, approaching the January 2022 high.

U.S. Treasury yields fell, with the 10-year yield down 3.45 basis points. The U.S. dollar index dropped 0.35%, falling below the support level of 97. Cryptocurrencies saw widespread declines. Bitcoin surged before turning negative, dropping 2% from its daily high. Solana briefly fell 5%.

A weak dollar boosted gold, which rose over 1.2%, nearing $3,700, setting a new high. Coking coal futures rose nearly 5% in night trading, while coke also increased over 4.6%.

During the Asian session, the ChiNext Index rose 1.5%, with "Ning Wang" AH shares soaring to a new high, the Hang Seng Index rising nearly 1%, and Pop Mart falling over 6% against the trend, while "double 焦" surged.

Key News

China and the U.S. have reached a basic framework consensus on properly resolving the TikTok issue. Li Chenggang: China will never seek to reach any agreement at the cost of sacrificing principles, corporate interests, and international fairness and justice.

China released August economic data, showing characteristics of "weak industrial performance, weak investment, and weak consumption," with expectations for a new round of policy easing rising. August housing prices in 70 cities: First-tier second-hand housing prices fell 1% month-on-month, unchanged from last month, while new housing prices in various cities saw a narrowing year-on-year decline.

Starting from 12:01 AM Eastern Time on the 16th, the U.S. has lowered the import tariff on Japanese cars to 15%.

Trump proposed: to no longer require companies to release quarterly financial reports, but instead change to semi-annual reports.

U.S. Michigan tax officials: There is no evidence that the primary residence of Federal Reserve Governor Cook violates tax policies.

The State Administration for Market Regulation is conducting further antitrust investigations into Nvidia, involving violations of restrictive conditions related to the acquisition of Mellanox.

Musk invested $1 billion to increase his stake, with Tesla rising 7.5% intraday on Monday, erasing its losses for the year. Hedge fund moguls suggest that a merger between Tesla and xAI may be inevitable. Musk's fastest AI model is here, xAI releases Grok 4 Fast.

Alphabet, Google's parent company, briefly rose 4.8%, entering the $3 trillion market cap club.

Apple's new device pre-sale tracking: iPhone 17 Pro Max is the most sought after, while Air is the least popular, with strong demand in the Chinese market. Xiaomi is directly competing with Apple, skipping the 16 series to push the 17 series, with Lei Jun stating: Fully benchmarking the iPhone!

"Pre-made Dish War" Upgrades! Luo Yonghao questions with five consecutive posts, Xi Bei urgently revises apology letter.

Market Report

US and European Stock Markets: S&P 500 rose 0.47%, closing at 6615.28 points. Dow Jones rose 0.11%, closing at 45883.45 points. Nasdaq rose 0.94%, closing at 22348.749 points. European STOXX 600 index closed up 0.42%, at 557.16 points.

A-shares: Shanghai Composite Index closed at 3860.50 points, down 0.26%; Shenzhen Component Index closed at 13005.77 points, up 0.63%; ChiNext Index closed at 3066.18 points, up 1.52%.

Bond Market: The yield on the US 10-year Treasury bond fell by 2.87 basis points, at 4.0356%. The yield on the 2-year US Treasury bond fell by 2.10 basis points, at 3.5347%.

Commodities: COMEX gold futures rose 0.93%, at $3720.70 per ounce. WTI October crude oil futures closed up 0.97%, at $63.30 per barrel. Brent November crude oil futures closed up 0.67%, at $67.44 per barrel.

News Details

Global Highlights

China and the US Reach Basic Framework Consensus on Properly Resolving TikTok Issues. According to Xinhua News Agency, Li Chenggang, Vice Minister of Commerce, stated that in the past two days, China and the US had candid, in-depth, and constructive communication on trade issues of mutual concern, including TikTok. The two sides reached a basic framework consensus on properly resolving TikTok issues through cooperation, reducing investment barriers, and promoting relevant economic and trade cooperation. Wang Jingtao, Deputy Director of the National Internet Information Office, stated that China and the US reached a basic consensus on resolving TikTok issues through the entrusted operation of user data and content security business for US users, as well as the authorization of intellectual property rights for algorithms.

Li Chenggang: China Will Never Seek to Reach Any Agreement at the Expense of Principles, Corporate Interests, and International Fairness and Justice. According to CCTV News, Li Chenggang, China's international trade negotiation representative and Vice Minister of Commerce, stated that China has consistently opposed the politicization, instrumentalization, and weaponization of technology and trade issues regarding TikTok, and will never seek to reach any agreement at the expense of principles, corporate interests, and international fairness and justice. The two sides reached a basic framework consensus on properly resolving TikTok-related issues through cooperation The spokesperson of the Ministry of Commerce answered reporters' questions regarding the U.S. request for relevant parties to impose tariffs on China under the pretext of importing Russian oil.

• A reporter asked: Recently, the U.S. has requested the G7 and NATO to impose tariffs of 50%-100% on China based on China's purchase of Russian oil, in order to push China to play a role in ending the Russia-Ukraine conflict. What is the Ministry of Commerce's response?
• Answer: China has always opposed the imposition of trade restrictions on China under the so-called "Russia-related" pretext. The U.S. intention to coerce relevant parties to impose "secondary tariffs" on China under the guise of purchasing Russian oil is a typical act of unilateral bullying and economic coercion, which seriously violates the consensus reached during the phone call between the leaders of China and the U.S., and may cause severe shocks to global trade and supply chain stability. China firmly opposes this. If any party harms China's interests, China will take all necessary measures to safeguard its legitimate rights and interests.

China released August economic data, showing characteristics of "industrial slowdown, weak investment, and subdued consumption," with expectations for a new round of policy easing rising.

• In August, the retail sales of consumer goods grew at a year-on-year rate of 3.4%, with retail growth in home appliances and audio-visual equipment slowing to 14.3%. The retail sales of furniture, household appliances, audio-visual equipment, cultural and office supplies, and communication equipment in above-limit units increased by 18.6%, 14.3%, 14.2%, and 7.3%, respectively, compared to previous values of 20.6%, 28.7%, 13.8%, and 14.9%. Retail sales of gold, silver, and jewelry increased by 16.8% year-on-year, compared to a previous value of 8.2%. Retail sales of automobiles increased by 0.8% year-on-year, compared to a previous value of -1.5%, while retail sales of petroleum and products declined by 8% year-on-year, compared to a previous value of -8.3%.
• In August, the value added of industrial enterprises above designated size increased by 5.2% year-on-year, with good growth in equipment manufacturing and high-tech manufacturing. Among 41 major industries, 31 industries maintained year-on-year growth in value added. The manufacturing of railway, shipbuilding, aerospace, and other transportation equipment, as well as the manufacturing of computers, communications, and other electronic equipment, showed rapid growth. The output of products such as 3D printing equipment, new energy vehicles, and industrial robots increased by 40.4%, 22.7%, and 14.4% year-on-year, respectively.
• From January to August, national fixed asset investment grew by 0.5%, with manufacturing investment increasing by 5.1%. Among these, private fixed asset investment decreased by 2.3% year-on-year. On a month-on-month basis, fixed asset investment (excluding rural households) decreased by 0.20% in August.
• From January to August, real estate development investment decreased by 12.9% year-on-year, with the sales area of new commercial housing decreasing by 4.7% year-on-year. From January to August, the sales area of new commercial housing was 57,304 million square meters, a year-on-year decrease of 4.7%, which is an expansion of 0.7 percentage points compared to January to July; The residential sales area decreased by 4.7%. The sales of newly built commercial housing amounted to 55,015 billion yuan, a decrease of 7.3%; among them, the sales of residential properties decreased by 7.0%.
• August 70 Cities Housing Prices: The month-on-month decline in first-tier second-hand housing prices remained at 1%, the same as last month, while the year-on-year decline in new housing prices across all tiers narrowed. In August, the month-on-month decline in second-hand housing prices in various cities remained basically the same as last month, with first-tier cities experiencing a year-on-year decline of 3.5%.
• The Macro Team of Minsheng Securities led by Tao Chuan believes that the economic data for August shows characteristics of "weak industry, weak investment, and weak consumption," and expectations for a new round of policy easing are rising. In the fourth quarter, fiscal and monetary policies will work together, focusing on "stabilizing investment" and "promoting consumption." Negative growth in manufacturing investment urgently needs to be broken. Policy financial tools are about to be implemented. The subsidy effect of "trade-in" is diminishing, and new consumption policies are about to be laid out, including promoting reasonable wage growth, reducing consumption restrictions, and cultivating new growth points for service consumption, among other specific actions that will accelerate implementation.

The U.S. lowers import tariffs on Japanese cars. Starting from 12:01 AM Eastern Time on the 16th, the U.S. has lowered the import tariff on Japanese cars to 15%.

Trump proposes: companies will no longer be required to release quarterly financial reports, but instead switch to biannual reports. From a procedural standpoint, changes to the quarterly financial reporting system do not require support from the U.S. Congress, only a majority vote from the SEC is needed. Currently, Republicans hold a 3-1 advantage in the SEC, with one seat vacant. Sarah Bianchi, Chief Strategist for International Political Affairs and Public Policy at Evercore ISI, stated that the process may take 6 to 12 months. However, many on Wall Street are more skeptical about whether this change will occur.

• Wall Street questions Trump's proposal: Can the SEC approve changing quarterly reports to biannual ones? Will uncertainty increase? Will it further stimulate stock market volatility? Some predict a 60% chance that the SEC will advance Trump's proposal, while others say it is unlikely to be pushed forward soon, and some believe it is unlikely to abolish quarterly reports, as this is a requirement of the Securities Exchange Act of 1934. Market observers are concerned that reducing the frequency of financial report disclosures by listed companies will weaken accountability and increase stock market volatility. Investment institutions warn that longer reporting intervals will increase uncertainty. Some believe that the lack of transparency will make investment more difficult, but it will allow companies to focus on long-term business development.

U.S. Michigan tax officials: There is no evidence that Federal Reserve Governor Cook's primary residence violates tax policies The State Administration for Market Regulation launches further antitrust investigation into NVIDIA, involving violations of restrictive conditions in the acquisition of Mellanox. The State Administration for Market Regulation has decided to conduct a further antitrust investigation into NVIDIA, accusing the company of violating antitrust laws and the restrictive conditions set during the acquisition of Mellanox. The investigation was initiated on December 9 of last year.

Real money statement: Musk invests $1 billion to increase his stake, Tesla erases its year-to-date decline. According to documents disclosed on Monday, Musk purchased approximately 2.57 million shares of Tesla stock last week at a price of $371 to $396 per share. This increase in stake is seen as an important step for Musk to achieve his goal of a 20% ownership stake, ensuring the company's competitiveness as it transitions into the fields of artificial intelligence and robotics. Tesla's stock rose as much as 7.5% on Monday, closing up 3.6%, rebounding 85% from its year-to-date low in April.

Is Tesla merging with xAI? Hedge fund mogul: It feels inevitable. The positive remarks from Anthony Scaramucci, founder of SkyBridge Capital, have further fueled expectations of a potential merger between Tesla and xAI. Renowned tech analyst and co-founder of Deepwater Asset Management, Gene Munster, analyzed that the combination could help Tesla achieve its grand target of a market value of $8.5 trillion.

Musk's fastest AI model is here. xAI has released Grok 4 Fast, with a generation speed of up to 75 tokens per second, ten times faster than the standard version. In tests conducted by netizens, Grok 4 Fast solved a classic LeetCode problem in less than 2 seconds. Not only in Python, but Grok 4 Fast also completed writing a linked list in C language in just 8 seconds.

Google's parent company Alphabet briefly rises 4.8%, reaching a market value of $3 trillion. On Monday, Alphabet's stock price briefly rose 4.8% to $252.41, surpassing the significant $3 trillion market value threshold. Since the low in April, the company's stock price has surged over 70%. The recent momentum for Alphabet's rise comes from strong earnings reports and anticipated antitrust rulings.

• The slogan "disrupting Google" is loud, the financing valuation is high, but the commercialization progress of "AI search" Perplexity is "poor". Perplexity has reached a valuation of $20 billion, but the advancement of its advertising and e-commerce business has been slow, leaving advertisers and merchants generally disappointed The company's advertising revenue last year was only $20,000, accepting less than 0.5% of thousands of advertising applicants. Its e-commerce functionality is also inadequate, lacking basic features such as a shopping cart. More concerning is that Taz Patel, the executive in charge of advertising, left last month.

Apple's new device pre-sale tracking: iPhone 17 Pro Max is the most sought after, Air is the worst, strong demand in the Chinese market. Citigroup's research shows that the trend towards high-end Apple products continues, with the longest delivery time for the iPhone 17 Pro Max, followed by the Pro model. Compared to the same period last year, the initial demand for the iPhone 17 shows significant regional differentiation, with longer delivery times in China and India, while the waiting times in the US and UK markets have shortened.

Xiaomi takes on Apple directly, skipping the 16 series to push the 17 series, Lei Jun: fully benchmarking the iPhone! Lu Weibing stated that the three products in the Xiaomi 17 series are clearly positioned: the Xiaomi 17 is positioned as "the strongest standard flagship ever, with comprehensive upgrades and no price increase"; the Xiaomi 17 Pro is "the most exquisite small-sized technology imaging flagship"; and the Xiaomi 17 Pro Max is "the most powerful peak technology imaging flagship ever." Some netizens commented that since they dare to go straight to 17, the upgrades must be worthy of "17."

The "pre-made dish war" escalates! Luo Yonghao questions with five consecutive posts, Xibei urgently revises apology letter. Xibei's latest apology promises to change some core dishes from pre-made to freshly made in-store, stating, "Customers have mistreated me thousands of times, but I treat customers like my first love." Luo Yonghao quickly retorted with "What have customers mistreated you about?" in five consecutive questions. It is worth mentioning that shortly after the apology letter was issued, it was retracted and republished, adding quotation marks around the word "mistreat" in "Customers have mistreated me thousands of times."

Domestic Macro

Qiushi magazine publishes an important article by General Secretary Xi Jinping titled "Deepening the Construction of a National Unified Market". According to Xinhua News Agency, the article points out that deepening the construction of a national unified market has basic requirements of "five unifications and one openness." The "five unifications" refer to unifying the basic systems of the market; unifying market infrastructure; unifying government behavior standards; unifying market supervision and law enforcement; and unifying factor resource markets. "One openness" means continuously expanding openness, implementing internal and external connectivity, and avoiding closed operations.

The State Administration of Foreign Exchange: Facilitating foreign individuals' domestic home purchase foreign exchange settlement payments, allowing foreign exchange profits under foreign direct investment (FDI) to be reinvested domestically. The foreign exchange bureau stated that foreign individuals, upon meeting the home purchase qualification conditions set by real estate authorities, can first handle the foreign exchange settlement payment for home purchases at banks with the purchase contract or agreement before obtaining the home purchase registration certificate from the real estate authorities Subsequently, the bank will be required to supplement the housing registration proof documents. The convenience of foreign exchange settlement for domestic home purchases does not change the policy for foreign individuals purchasing homes in China.

Has the deposit moved? Wang Jian, Chief Analyst of the Banking Sector at Guosen Securities, believes that the incremental amount of personal time deposits remains the highest among various types, but the incremental amount has also decreased. Some incremental funds have been used for investment, significantly increasing the incremental deposits in non-bank financial institutions. Therefore, the phenomenon of personal deposits becoming more time-bound has eased, and the proportion of new wealth allocated to financial investments has risen, but the existing deposits have not yet started to move.

Domestic Companies

JP Morgan Downgrades Pop Mart Rating: After a surge, the valuation has reached perfect expectations, and the risk-reward ratio has worsened. JP Morgan has downgraded Pop Mart's rating to "Neutral," lowering the target price from HKD 400 to HKD 300, mainly because the stock price has soared 209% this year, reaching "perfect expectations," and the short-term risk/reward ratio is no longer favorable. The currently realized positive catalysts are basically priced in, and the visibility of remaining catalysts (such as animation, Labubu 4.0) is low. It is recommended to wait until the catalyst window from Q4 2025 to Q1 2026 to reassess the entry timing.

Citi Raises Shenghong Target Price to 447 Yuan: AI-PCB super cycle accelerates, supply-demand tension will continue until after 2026. Citi stated that benefiting from the trend of rack wireless cable design and the promotion of CoWoP technology, the AI-PCB super cycle is accelerating, and it is expected that supply-demand tension will continue until after 2026. Shenghong Technology, with its proven AI-PCB mass production capabilities and production expansion speed far exceeding its peers, will become a key beneficiary of this super cycle. Citi raised Shenghong Technology's target price by 148% to 447 Yuan, indicating a 35% upside potential compared to the current stock price.

Regarding "60-day payment terms," BYD and other car companies collectively express their stance! After the China Association of Automobile Manufacturers released the "Initiative on Payment Norms for Automotive Complete Vehicle Enterprises' Suppliers," more than a dozen mainstream car companies, including SAIC, BYD, Changan, Xiaomi, and Li Auto, actively responded, committing to strictly implement the "60-day payment terms" principle and standardizing key processes such as reconciliation, acceptance, and contracts. The Ministry of Industry and Information Technology stated that this will enhance the resilience of the industrial chain, protect suppliers' rights and interests, and promote the healthy development of the automotive industry. Traditional car companies demonstrate a mature execution system, while new energy vehicle companies emphasize collaborative win-win and building a sustainable ecosystem.

Overseas Macro

25 basis points are "set in stone," and 50 basis points are "very difficult"; for the Federal Reserve, the market "wants more". Investors have already priced in a series of interest rate cuts extending to 2026 Analysis suggests that Federal Reserve Chairman Jerome Powell and other officials may signal that investors are being too aggressive, leading to a repricing of asset prices. Powell's speech and the Federal Reserve officials' interest rate forecast "dot plot" are the focal points of this decision.

Employment slowdown meets tariff inflation, the Federal Reserve may experience its first "three-way split" since 2019. Investors generally expect the Federal Reserve to cut rates by 25 basis points this week, but there may be a "three-way split" vote within the Federal Reserve, with opinions supporting a rate cut, a larger rate cut, and maintaining rates unchanged. Analysis suggests that the possibility of a three-way split "indicates that the committee is currently under unique pressure."

Wall Street's "hottest term": Run it hot! Betting on "fiscal and monetary easing". The core logic of the "Run it hot" strategy is that tax cuts and interest rate cuts will jointly "heat up" the economy, thereby triggering a new wave of growth. However, under this strategy, traders seem to ignore the weak employment report and the economic risks of tariffs, with analysts warning that investors may be "misreading" the current economic situation.

U.S. Congressional Budget Office: Tariffs have pushed inflation above expectations, but deficits are expected to see a significant reversal in the long term. Phillip Swagel, director of the U.S. Congressional Budget Office (CBO), stated that Trump's tariff policy has raised inflation, albeit not significantly, but enough to be noticeable. However, in the long term, these tariffs will reduce the U.S. budget deficit by $4 trillion over the next decade by injecting funds into federal finances, marking a significant reversal in the deficit.

Abandoning aggressive enforcement, U.S. SEC Chairman says: Companies will be notified of technical violations before "breaking in". The U.S. top financial regulatory agency is undergoing a significant shift. The new SEC Chairman appointed by Trump, Gary Gensler, stated that for companies' technical violations, the SEC will first provide notice and an opportunity for correction, rather than directly taking enforcement actions. Especially in the cryptocurrency sector, Gensler holds a clear supportive stance and plans to establish rules for tokenized assets, contrasting sharply with the hardline stance of his predecessor.

Overseas Companies

OpenAI Board Chairman: We are indeed in an "AI bubble," there will inevitably be huge winners, and many will suffer heavy losses. Bret Taylor believes that both statements, "AI will change the economy" and "many will lose money," can be true simultaneously. For example, at the end of the 1990s, although countless companies collapsed during the internet bubble burst, in the long run, "those who judged the future of the internet in 1999 were, to some extent, correct." Goldman Sachs significantly raises Oracle's target price but maintains a "neutral" rating: Huge capital expenditures pose significant pressure on short-term profits. Goldman Sachs raised its growth expectations for Oracle's IaaS business but also stated that the huge capital expenditures will delay cash flow breakeven until fiscal year 2029, and there is still a lack of clear visibility on whether this can be converted into revenue growth.

CoreWeave receives a $6.3 billion order from NVIDIA, stock price surges over 7%. According to the terms of the agreement, NVIDIA is obligated to purchase the remaining unsold computing capacity from CoreWeave until April 2032. CoreWeave stated that it will disclose the full agreement copy when it announces its third-quarter financial report.

Entering the "Nuclear Energy Golden Age," the US and UK sign multiple agreements, and US nuclear companies make a major entry into the UK. The US and UK signed a series of nuclear cooperation agreements, with several American nuclear companies planning to build projects in the UK. Companies like X-energy plan to construct up to 12 small modular reactors in the UK, with a total installed capacity of 6 gigawatts. These agreements are expected to be formally signed during Trump's state visit to the UK this week, with UK Prime Minister Starmer stating that these important commitments will lead the UK "into the golden age of nuclear energy."

Novo Nordisk "wins by volume": High-dose semaglutide trial shows 19% weight loss effect, but still lags behind Eli Lilly's competing product. Novo Nordisk's semaglutide, after tripling the dose in clinical trials, resulted in an average weight loss of 19% for patients, exceeding the standard dose of 16%. Despite the improved effect, it still falls short of competitor Eli Lilly's tirzepatide (22.5%). The high-dose regimen may offer patients a more cost-effective option, but it also comes with a higher incidence of side effects.

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